No bids wanted

Sole-sourcing still a sore spot

Richard Gleeson
Northern News Services

Yellowknife (Apr 13/01) - The rules for cabinet-approved sole-source contracting are similar to those of the Ultimate Fighting Championship -- there aren't any.

Four types of contracts Tender: public notification, documents describing process, work or materials sought. Contract goes to lowest bidder. Request for proposals: public notification, allows more flexibility for bidders. Evaluate proposed design, expertise, experience. Scoring system used to rate bids for best value. Sole-sourced: no notification, contracts offered to only one firm. Under regulations, sole-sourcing can be used only for contracts under $1,000, in an emergency, for architectural or engineering services under $25,000, or if only one firm is available or capable of doing the work. Negotiated contracts: used when project does not fit criteria for sole-sourcing. Must be approved by cabinet. Typically used for contracting services, and fostering growth of aboriginal corporations.

Government contract regulations allow cabinet to authorize negotiation of any contract with a private business, regardless of whether the service might be available for a lower price from another supplier.

In the last six months, cabinet has authorized negotiation of 15 contracts, reported deputy cabinet secretary Allan Cash.

Forest fire management and accelerated development of the Mackenzie winter road accounted for most of them.

It is not only prospective competitors who may be unaware of government business opportunities.

Regular MLAs found out only by chance of two sole-sourced contracts -- totalling $550,000 -- negotiated by the Department of Health and Social Services.

"I'm always concerned about sole-sourcing," said MLA Charles Dent. "The best way to get a competitive price is to go to a competitive bid."

Last week a committee the Yellowknife MLA chairs reviewed Auditor General of Canada reports on territorial government spending.

At the meeting, the government's comptroller general, Lew Voytilla, told MLAs recommendations of the last committee review of the Auditor General's report are being implemented, as are those of a study the government commissioned of its procurement policies.

Sole-sourcing contracts is not part of the reform.

"We think the criteria for sole-sourcing is appropriate and doesn't require reform," he said, adding there is a need to ensure those authorized to negotiate contracts have a clear understanding of the rules.

Under contract regulations, there are only four justifications for a department bypassing the competitive process:

• when the goods and services are urgently required;
• when only one party is capable of performing the contract;
• when the contract is an architectural or engineering contract worth not more than $25,000; and,
• when cabinet authorizes it.

Dent acknowledged there are circumstances that justify sole-source contracting.

One of the most common reasons is fostering the growth of aboriginal businesses.

Dent said even in that instance, the contract should eventually be put to a competitive bid to ensure taxpayers are getting value for their money.

Cabinet authorization was not required for the two Health and Social Services. The department's associate deputy minister, Debbie DeLancy, said there were no other contractors available.

Regulations require cabinet to keep a written record of its decisions, but according to the deputy secretary to cabinet, those reasons are protected by the 15-year seal that applies to all cabinet documents.

Asked what controls there are on cabinet contract decisions, Voytilla said, "the assembly and the electorate."

The 15-year waiting period does not apply to the Auditor General. His reports are typically released a year or more after the expiry of the financial year.

The government publishes a list of all expenditures over $5,000, noting what type of contract the spending was done under.

The most recent list provides information on contracts for the fiscal year ended March 31, 2000.

The list for the 2000-01 fiscal year will be released in the coming weeks.