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NUNAVUT
In the wake of criticisms levied by the Canada's auditor general, the territorial government has launched a "comprehensive review" of the Nunavummi Nangminiqaqtunik Ikajuuti policy a year earlier than expected.

In the legislature on March 1, Premier Eva Aariak said the review will be done in collaboration with Nunavut Tunngavik Inc.

The NNI policy, a requirement under Article 24 of the Nunavut Land Claims Agreement, gives Nunavut and Inuit-owned businesses advantages when bidding on government contracts.

Officials will also perform an internal review of the territorial government's public procurement practices in conjunction with the NNI policy review, stated Aariak.

"The objective of our internal public procurement review, when matched with the joint NNI review, is to ensure that our practices reflect emerging best-practices and are effective and efficient," she stated on March 1.

Nunavut Tunngavik president Cathy Towtongie stated she supports the review of the NNI policy, adding NTI will also review its Inuit firm registry.

"We are seeing inconsistencies and gaps in procurement and this leads to an unhealthy business environment," stated Towtongie in a press release. "We look forward to working with the GN to develop the terms of reference, budgets and timetable for this important process. It is time to correct these problems."

Auditor General of Canada Michael Ferguson audited how the Department of Community and Government services, Qulliq Energy Corporation and the Nunavut Housing Corporation awarded contracts and subsequently administered them. The three spent, in total, about $207 million on contracts in 2010-11.

A report on his audit, examining both competitive and sole contracts, was tabled in the legislature on Feb. 28.

The auditor general looked at 13 sole-source contracts from CGS worth some $2.2 million, 12 from NHC worth some $5.5 million and 12 from QEC worth some $3.3 million.

The audit found QEC did not award any of the 12 according to the rule. According to the report, it had been operating under the assumption only one firm could complete the work, but the audit found there was little or no evidence to support this and no documentation that Qulliq had made efforts to find other companies that could do the work.

It found NHC followed the rules for awarding just one of the 12 contracts examined. The corporation's position was it uses sole-source contracts to hire consultants to carry out regular work not completed because of unfilled positions - examples listed were consultants to perform financial work, technical experts for building expertise. They do these in the sole-source fashion because, officials maintain, the work is urgent enough that any delay would be injurious to the public. Officials also maintain there are few consultants with expertise and experience with the corporation and territory. The auditor general did not find adequate proof to back those assertions. The corporation disagreed with that assessment.

As for CGS, seven of the 13 contracts were not awarded according to the rules, the report states. In one instance, a sole-source contract was awarded before the sole-source method itself was approved, and in another a contract was awarded without the method being approved at all. In two instances, work began on the contract before it was actually awarded.

Assistant auditor general Ronnie Campbell said the day after he spoke at the legislature the report is a mixture of good and bad.

"So, there is good stuff there in terms of how they award competitive contracts but we were really concerned about the use of sole-source contracts," he said. "If you look at the sole-source one, at CGS, about half of them were not done properly and Qulliq Energy, none of them were down properly and at housing, only one of the 12 was done properly so that is really a weakness."

Staff from all three should be trained on procurement rules and procedures in a timely manner, something all three agreed, the report indicates.

"A lot of it has to do with human resource issues - people don't have the expertise or they need to be trained but still, when you tender contracts through sole source when you're not supposed to, that's not a good thing," said Campbell.

As for competitive contracts, the auditor general examined 35 competitive from CGS, with a total value of about $131 million, and 17 from QEC with an approximate total value of $18 million.

The auditor general also examined 11 competitive contracts awarded by NHC, with a total value of about $46 million.

CGS followed the rules when awarding competitive contracts, but the housing corporation was missing key documentation to support half its competitive contract awards, states the report. Qulliq Energy only followed the rules when awarding competitive contracts for capital projects, not for goods and services, the report states.

South Baffin MLA Fred Schell, also the minister responsible for the Nunavut Housing Corporation, said he agrees with points made in the report and his department is working to improve its contracting procedures. George Hickes, the manager of corporate communications at Qulliq Energy Corporation, said "Qulliq Energy agrees with the recommendations brought forward in the report from the auditor general's office and will be looking at following the recommendations as allocated in the report."

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