Supply Chain

April 2009

Guideline

Version 1.0

PREFACE
Ontariosbroaderpublicsector(BPS)organizationshaveaproudtraditionofstrivingtodeliverhighquality publicservicesefficientlyandeffectively,andhavelongrecognizedtheneedtocontinuouslyevaluateandbe accountablefortheiroperatingperformance. Comprehensiveanddocumentedoperatingproceduresareahallmarkofwellmanagedorganizations. Thelargertheorganizationandthemorepeopleinvolved,themorecriticaloperatingproceduresbecome. Whenorganizationsareparticipantsinabiggerinterlinkedsystem,suchasOntariosbroaderpublicsector, documentedproceduresarevitaltoefficiency,effectivenessandaccountability. TheBPSSupplyChainGuideline(Guideline)isafoundationaldocument.Preparedtosupportandhelp improvesupplychainactivitiesatOntariosBPSorganizations,thisfirsteditionincludestwoessential Principlestowardsthegoalofsupplychainexcellence:aCodeofEthicsandaProcurementPoliciesand Proceduresstandard. ItisanticipatedthatovertimetheGuidelinewillbecomeacomprehensiveanddocumentedrepository ofmanysupplychainPrinciples,includingleadingpractices,standardsandmetrics.EachPrinciplewill bedevelopedandvalidatedinclosecollaborationwithBPSorganizationsandrelatedstakeholdersso thattheycanimplementitwithconfidence. ThisfirsteditionoftheGuidelinewasdevelopedinconsultationwithapproximately300individuals representingover150organizationsfromacrossOntarioandnumerousBPSsubsectors:hospitals, communitycareaccesscentres(CCACs),LocalHealthIntegrationNetworks(LHINs),schoolboards, universities,collegesandsharedserviceorganizations.Valuableadditionalinputwasreceivedfrom suppliers,serviceproviders,associationsandotherstakeholders. MythankstoeveryonefartoomanytonamefortheircommitmenttogettingtheBPSSupply ChainGuidelineofftoagoodstart. MythanksalsotothededicatedstaffattheSecretariat,namelyJimHadjiyianni,JenniferShip, JenniferChurchill,MarshaChaseandIrisKoandtoourteamofconsultantsfromDeloitte.TheGuideline existsbecauseofyourlonghours,talentformeldingdifferentviewpoints,andenthusiasmforcollaborating withBPSstakeholdersacrossOntario. DanWright AssistantDeputyMinister BPSSupplyChainSecretariat MinistryofFinance

TABLE OF CONTENTS
CHAPTER I: INTRODUCTION ............................................................................................................... 1
1.1 Purpose ..................................................................................................................................................................................................... 1 1.2 ApplicationandInScopeRecipients ........................................................................................................................................... 1

CHAPTER II: THE SUPPLY CHAIN PRINCIPLES ..................................................................................... 3

2.1 GuidelinePrinciples............................................................................................................................................................................. 4 2.2 FirstYearPrinciples............................................................................................................................................................................ 4 2.2.1 SupplyChainCodeofEthics............................................................................................................................................. 4 2.2.2 ProcurementPoliciesandProcedures ........................................................................................................................ 4

CHAPTER III: IMPLEMENTATION......................................................................................................... 5

3.1 Consultation............................................................................................................................................................................................ 5 3.1.1 200809FiscalYear ............................................................................................................................................................ 5 3.1.2 200910FiscalYear ............................................................................................................................................................ 5 3.2 Timing........................................................................................................................................................................................................ 5 3.2.1 TheProposedSequenceforImplementation........................................................................................................... 5 3.3 AccountabilityandReporting ......................................................................................................................................................... 6

CHAPTER IV: PRINCIPLE #1 SUPPLY CHAIN CODE OF ETHICS ............................................................. 7

4.1 4.2 4.3 4.4 PurposeoftheSupplyChainCodeofEthics ............................................................................................................................. 7 AdoptionoftheSupplyChainCodeofEthics ........................................................................................................................... 7 SupplyChainCodeofEthics............................................................................................................................................................. 8 SupportingDocuments ...................................................................................................................................................................... 9 4.4.1 SupplyChainCodeofEthicsComplianceChecklist......................................................................................... 9

CHAPTER V: PRINCIPLE #2 PROCUREMENT POLICIES AND PROCEDURES ...........................................10

5.1 PurposeoftheProcurementPoliciesandProcedures.......................................................................................................10 5.1.1 Objective .................................................................................................................................................................................10 5.1.2 Rationale.................................................................................................................................................................................10 5.1.3 Benefits....................................................................................................................................................................................10 5.2 AdoptionoftheProcurementPoliciesandProcedures ....................................................................................................11 5.2.1 ImplementationConsiderations ..................................................................................................................................11 5.2.1.1 EstablishingtheOrganizationsProcurementPoliciesandProcedures...............................11 5.2.1.2 Compliance.......................................................................................................................................................11 5.2.1.3 Accountability .................................................................................................................................................11 5.3 ProcurementPoliciesandProcedures......................................................................................................................................12 5.3.1 Introduction ..........................................................................................................................................................................12 5.3.2 ApplicationandScope ......................................................................................................................................................12 5.3.3 Context.....................................................................................................................................................................................12 5.3.4 Elements .................................................................................................................................................................................12 5.3.5 RelatedGuidelines..............................................................................................................................................................13 5.3.5.1 AgreementonInternalTrade(AIT) ......................................................................................................13 5.3.5.2 OntarioQuebecProcurementAgreement..........................................................................................13 5.3.5.3 CanadianLawofCompetitiveProcessesandContractLaw.......................................................14 5.3.5.4 FreedomofInformationandProtectionofPrivacyAct(FIPPA).................................................14

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SegregationofDutiesandApprovalAuthorityLevels .......................................................................................15 5.3.6.1 SegregationofDuties ...................................................................................................................................15 5.3.6.2 ApprovalAuthorities....................................................................................................................................16 5.3.7 Competitivevs.NonCompetitiveProcurementProcessDetermination ..................................................17 5.3.7.1 CompetitiveProcessRequirements ......................................................................................................17 5.3.8 CompetitiveProcurement...............................................................................................................................................18 5.3.8.1 InformationGathering.................................................................................................................................18 5.3.8.1.1 RequestforInformation(RFI).................................................................................................18 5.3.8.1.2 RequestforExpressionsofInterest(RFEI) ........................................................................18 5.3.8.1.3 RequestforSupplierQualifications(RFSQ) ......................................................................19 5.3.8.1.4 GeneralGuidelinesonInformationSolicitation ..............................................................19 5.3.8.2 Purchasing ........................................................................................................................................................20 5.3.8.2.1 VendorsofRecord(VOR)/PreferredSuppliersList .......................................................20 5.3.8.2.2 CompetitiveDocuments..............................................................................................................21 5.3.8.2.3 AdvertisingandPostingCompetitiveDocumentstoMarket.....................................22 5.3.8.2.4 CommunicationsduringCompetition..................................................................................23 5.3.8.2.5 TimelinesforPostingCompetitiveProcurements ..........................................................24 5.3.8.2.6 BiddersConference......................................................................................................................25 5.3.8.3 Evaluation .........................................................................................................................................................25 5.3.8.3.1 BidReceipt........................................................................................................................................25 5.3.8.3.2 EvaluationCriteria.......................................................................................................................26 5.3.8.3.3 EvaluationProcess .......................................................................................................................26 5.3.8.3.4 EvaluationTeam ...........................................................................................................................27 5.3.8.3.5 SelectionProcess ...........................................................................................................................28 5.3.8.3.6 NonDiscrimination......................................................................................................................28 5.3.8.4 ContractAward...............................................................................................................................................30 5.3.8.4.1 ExecutingtheContract ...............................................................................................................30 5.3.8.4.2 AwardNotification.......................................................................................................................31 5.3.8.4.3 VendorDebriefing.........................................................................................................................32 5.3.9 NonCompetitiveProcurement ....................................................................................................................................33 5.3.9.1 ExemptionsfromtheCompetitiveProcess........................................................................................33 5.3.9.1.1 SingleSourcing...............................................................................................................................33 5.3.9.1.2 SoleSourcing...................................................................................................................................34 5.3.9.2 NonCompetitiveProcurementDocumentation..............................................................................35 5.3.10 EnvironmentalSourcing..................................................................................................................................................35 5.3.11 ProcurementDocumentsandRecordsRetention................................................................................................37 5.3.12 ConflictsofInterest............................................................................................................................................................39 5.3.12.1 Suppliers............................................................................................................................................................39 5.3.12.2 Consultants.......................................................................................................................................................39 5.3.12.3 EmployeesandAdvisors ............................................................................................................................40 5.3.12.4 EvaluationTeamMembers .......................................................................................................................40 5.3.13 BidProtestProcedures ....................................................................................................................................................41 5.4 SupportingDocuments ....................................................................................................................................................................42 5.4.1 InputDocuments.................................................................................................................................................................42 5.4.2 ListofMandatoryRequirements .................................................................................................................................44 5.4.3 CanadianContractandProcurementLaw...............................................................................................................48 5.4.4 GlossaryofTerms...............................................................................................................................................................50 5.4.5 Question&Answer ............................................................................................................................................................58 5.4.6 SampleTemplatesPENDING ...................................................................................................................................65

5.3.6

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ChapterI| Introduction
Ontario'sbroaderpublicsector(BPS)spendsmorethan$10billionannuallyacquiringthegoodsandservices neededtodeliverhealthcare,educationandothervitalpublicservices.BPSsupplychainactivitiesneedto supporthighqualityservicedelivery,butalsobeefficientandeffectivetoallowBPSorganizationstosatisfy theiraccountabilityobligations. TheBPSSupplyChainSecretariat,MinistryofFinance(informallyknownasOntarioBuys)wasestablished in2005tofacilitateandacceleratethewidespreadimplementationofintegratedsupplychainandother backofficeleadingpracticesbytheBPS.Asofearly2009,OntarioBuyshadhelpedestablishorexpandnine sharedserviceorganizationsforOntarioshealthcareandeducationsectors.Over40leadingpracticeprojects hadreceivedfundingsupportingBPSsupplychainandbackofficetransformationthroughoutOntario. ThroughthisworkwiththeBPS,theabsenceofdocumentedpublicsectorsupplychainleadingpractices, standardsandmetricshasbecomemoreapparent.Mostlargeorganizationshavewrittenoperating proceduresbutthesetendtobeorganizationspecific,makingitdifficulttocompareperformance. Smallerorganizationsgenerallyhavesomeoperatingproceduresbutoftenlacktheresourcestoensurethe proceduresarecomprehensiveanduptodate. ManyorganizationsadvisedOntarioBuysitwasimportanttocreateandmaintainaguideline,setting outcoreofthecoresupplychainleadingpractices,standardsandmetrics,andtofacilitateongoing collaborationtodebate,evaluateandupdatetheguidelineovertime.NumerousBPSsupplychainpersonnel saidthataguidelineandassociatedcollaborationwouldpromoteskilldevelopment,improveperformance metrics,andallowthemtoengageinternalcustomersandexternalsuppliersmoreconsistentlyand professionally. ThisinitialSupplyChainGuidelineisanimportantcontributiontothoseneeds,beingbothaproductitself andtheproductofanintenselycollaborativeandprovincewideprocess.

1.1

PURPOSE

TheSupplyChainGuideline(Guideline)hasbeenpreparedtosupportandimproveBPSsupplychain activities.GuidelineVersion1.0(2009)(Guideline1.0)incorporatestwoPrinciples:aSupplyChainCodeof EthicsandaProcurementPoliciesandProceduresstandard.Itisanticipatedthatfutureeditionswillinclude additionalPrinciplesovertimecomprisingacomprehensiverangeofleadingpractices,standardsand metrics.EacheditionwillundergorigorousconsultationwithBPSorganizationsandotherstakeholders.

1.2

APPLICATION AND IN-SCOPE RECIPIENTS

InMarch2008,OntariosTreasuryBoardofCabinetdirectedthataSupplyChainGuidelinebepreparedand, asofApril1,2009,beincorporatedintothefundingagreementsofBPSorganizationsreceivingmorethan $10millionperfiscalyearfromtheMinistriesofHealthandLongTermCare,EducationandTraining, CollegesandUniversities.

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TheseorganizationsarereferredtoasInScopeRecipients.TheGuidelineisalsomandatoryforshared serviceorganizations(SSOs)ownedorfundedbyInScopeRecipients. Asaresultofannouncementsinthe2009OntarioBudget,itisanticipatedthatthedefinitionofInScope Recipientswillbebroadenedduring2009toincludeadditionalBPSorganizations.

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ChapterII| TheSupplyChainPrinciples
Supplychainmanagementisacomplexdiscipline,guidedbyamyriadofleadingpractices,standardsand metrics.Asaresult,structuredcriteriawereusedtoselectandprioritizetheSupplyChainPrinciples. ThefollowingcriteriaguidedtheselectionofprinciplesforGuideline1.0andpossiblefutureeditions: a. Frontlinebenefits Benefitsforclientsandtheirfrontlineserviceproviders.

b. Broadlyapplicable RelevanceacrossabroadrangeofBPSinstitutions. c. Reasonable Reasonabletoimplement,maintainandtrack.

d. Measurable Consistent,robustandverifiableacrossorganizations. e. Scalable Ifcomplexorcostlytoimplement,implementableinstagesovertime. Operationallyrelevant Materialcontributiontokeyoperationalindicatorssuchasefficiency,qualityandaccountability. Coreofthecore Essentialtotheoperationofawellrunsupplychain.

f.

g.

Aninitiallistofprinciplescontainedapproximately150possibilities,fromwhich25wereselectedforfurther considerationbyworkingwithsubjectmatterexpertsandthecollectiveexpertiseoftheSecretariat.These25 weremorecarefullystudied,resultinginaninitialsetof12principlesbeingdiscussedwithBPSorganizations andotherstakeholdersthroughouttheprovinceduringthe200809roundofconsultations. Theselectioncriteria,combinedwithlearningfromthecollaborativeprocess,willinformtheselectionand contentofthedraftPrinciplesforfutureversionsoftheGuideline.RigorousconsultationondraftPrinciples willcontinueduringthe200910fiscalyear,witharevisedGuidelinelikelytobeissuedlateinthefiscalyear.

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2.1

GUIDELINE PRINCIPLES

ItiscurrentlyanticipatedthatGuidelinePrincipleswillbegroupedintothreecategories:leadingpractices, standardsandmetrics. Leadingpracticesareanyapplicationofprocess,technologyorpeoplepracticesthatallowsorganizationsin aspecificbusinesscontexttofunctionasefficientlyandeffectivelyaspossible.1Guidelineleadingpractices willberecommendedbutvoluntary. Aswithleadingpractices,standardsareoperatingpoliciesandproceduresthatenableconsistentand controlledbusinessprocesses.However,GuidelinestandardsaremandatoryforInScopeRecipients. Metricsareperformancemeasuresthatarespecific,quantitativeandprescriptive.Aswithstandards, GuidelinemetricsaremandatoryforInScopeRecipients. AfourthcategoryistheSupplyChainCodeofEthics.TheCodeofEthicsisastandardalbeitonethatis foundationaltoallleadingpractices,standardsandmetrics.

2.2

FIRST-YEAR PRINCIPLES

Guideline1.0hastwoPrinciples:theSupplyChainCodeofEthicsandaProcurementPoliciesandProcedures standard.

2.2.1

SUPPLY CHAIN CODE OF ETHICS

TheSupplyChainCodeofEthicssetsoutbasicoverarchingprinciplesofconductforBPSorganizations, theirsuppliers,advisorsandotherstakeholders.ItistobeadoptedbyInScopeRecipientsbyMarch2010, althoughallBPSorganizationsareencouragedtoadopttheCodeassoonaspracticable. ThecompletePrincipleisprovidedinChapter4andissupportedbyadetailedcompliancechecklistin Section4.4.1.

2.2.2

PROCUREMENT POLICIES AND PROCEDURES

TheProcurementPoliciesandProceduresstandardsetsoutstandardizedrulesforcompetitiveprocurement andcontracting.Therulesbalancenumerousobjectives,includingaccountability,transparency, valueformoneyand,ultimately,effectiveandhighqualityservicedelivery. ThecompletePrincipleisprovidedinChapter5andasummarylistofthemandatoryrequirementsis providedinSection5.4.2.

Page2,IntegratedSupplyChainManagement:ALeadingPracticesCompendium.QueensPrinterforOntario,2005.

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ChapterIII| Implementation
3.1 CONSULTATION

ThisguidelinehasbeendevelopedinconsultationwithnumerousBPSorganizationsandtheirsuppliersand otherstakeholders.

3.1.1

200809 FISCAL YEAR

OntarioBuysembarkedonanextensivestakeholderconsultationprocessbeginninginJune2008, culminatingin12majorsessionsacrosstheentireprovinceinDecember2008andJanuary2009. Almost300stakeholdersrepresentingover150organizationsparticipated.Thesectorrepresentatives included50hospitals,5communitycareaccesscentres(CCACs),5LocalHealthIntegrationNetworks (LHINs),35schoolboards,15universities,12colleges,5sharedserviceorganizationsand39suppliers. Thosewhocouldnotattendasessionwereinvitedtocompleteanelectronicform,oremailcomments directlytoOntarioBuys. ThepurposeofthesesessionswastogatherfeedbackonthetwoGuideline1.0Principlesandcertain proposedfutureprinciples.

3.1.2

200910 FISCAL YEAR

In200910,OntarioBuyswillconductfurtherconsultationswithBPSorganizationsandotherstakeholders onprinciplesbeingproposedforinclusionintheGuidelineoverthenext24months.Thegoalwillbebothto validatetheprinciplesselectedandtogetfeedbackonproposedprinciplecontent.Itiscriticalthatall principlessatisfytheGuidelinePrinciplescriteriabothintheoryandpractice.Inparticular,principlecontent mustbeoperationallyrelevantandreasonable. The200910consultationswillalsoreviewaproposedaccountabilityframework,includingmetric benchmarksandreportingobligations.

3.2

TIMING

ItisrecognizedthatInScopeRecipientsneedtimetoimplementanyGuidelinePrinciplesthattheydonot alreadyhaveinplace.Toaccommodatethis,onlytwoPrinciplestheSupplyChainCodeofEthicsand ProcurementPoliciesandProceduresmustbeimplementedinitially,byMarch2010.Inpractice,many organizationsmayalreadyhavetheseimplemented. Additionalprincipleswillbephasedinovertime,providingInScopeRecipientswiththenecessarytime toimplement.

3.2.1

THE PROPOSED SEQUENCE FOR IMPLEMENTATION

AswasthecasewithGuideline1.0,Principleswillgenerallybephasedinovertwostages.Duringthe firststage,theproposedPrinciplewillbecirculatedindraftform,tobefollowedbyextensiveconsultation. Afterthedrafthasbeenrevisedtakingintoaccountconsultationfeedback,itwillbepublishedasaPrinciple inthenextrevisionoftheGuideline,togetherwithadatebywhichitmustbeimplemented.

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ItisanticipatedthatsomePrinciplesmayhavetobeimplementedindifferentwaysbydifferentsectorsor kindsoforganizations.Forexample,somesectorsorsmallerorganizationsmayrequiremoretimefor implementationormayrequireadifferentversionofaPrinciple. ThefollowingchartillustrateshowadditionalPrinciplesmightbeimplementedovertime(exampleonly):

Phase I
Version 1.0 Version 2.0 Version 3.0+
Implement (2)

Phase II

Phase III

Consult and Define (10)

Implement (10)

Consult and Define

Implement

3.3

ACCOUNTABILITY AND REPORTING

InScopeRecipientsarerequiredtoreportannuallyonimplementationstatus,progressandresultsforeach Principle,including: a. b. c. Currentstaterelativetotheimplementationrequirement; Implementationprogress,anyidentifiedgapsandaworkplantoaddressthegapstomeettherequired deadlines;and Benefitsrealizedfromimplementation.

Theaccountabilityframework,settingoutwhatmustbereportedandtowhom,willbedevelopedin consultationswithlineministries,LHINsandBPSorganizationsduring200910.Itisanticipatedthatthe accountabilityframeworkwillbecompletedandpublishedinlate2009. Untiltheaccountabilityframeworkispublished,theaccountabilityrequirementforInScopeRecipientsis thatimplementationofthetwoGuideline1.0PrinciplestheSupplyChainCodeofEthicsandProcurement PoliciesandProceduresmustbecompletedbyMarch2010. AsnotedinSection1.2,InScopeRecipientsareBPSorganizationsthat,afterApril1,2009,haveenteredinto afundingagreement(oragreements)formorethan$10million(cumulatively)peryearwiththeMinistries ofHealthandLongTermCare,EducationandTraining,CollegesandUniversities. InlightofOntarioBuysannouncementsinthe2009OntarioBudget,allmajorBPSorganizationsmaywishto deemthemselvestobeInScopeRecipientsevenifSupplyChainGuideline1.0wasnotformallyincorporated intotheirfundingagreementwiththeministryorministries.

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ChapterIV| Principle#1SupplyChainCodeofEthics
TheSupplyChainCodeofEthicssetsoutbasicoverarchingsupplychainprinciplesofconductfor BPSorganizations,theirsuppliers,advisorsandotherstakeholders. ThisPrincipleistobeadoptedbyInScopeRecipientsbyMarch2010.

4.1

PURPOSE OF THE SUPPLY CHAIN CODE OF ETHICS

ThepurposeoftheSupplyChainCodeofEthicsistodefineacceptablebehavioursandstandardsthat shouldbecommonforeveryoneinvolvedwithsupplychainactivities,suchasplanning,purchasing, contracting,logisticsandpayment.TheCodeisnotmeanttosupersedecodesofethicsthatorganizationsmay alreadyhaveinplacebutrathertosupplementsuchcodeswithsupplychainspecificstandardsofpractice.

4.2

ADOPTION OF THE SUPPLY CHAIN CODE OF ETHICS

AdoptionoftheSupplyChainCodeofEthicshastwocomponents. First,anorganizationmustformallyadopttheCodeinamannerconsistentwithitsexistinggovernance processes.Forsome,thatwillinvolveaformaldirectionbyitsgovernors(e.g.,boardofdirectorsortrustees). Forothers,theformaldirectionwillcomefromaseniormanagementcommittee.Regardless,thepolicyintent isthattheorganizationclearlyestablishesthatallemployeesinvolvedwithsupplychainrelatedactivities mustconductthemselvesinaccordancewiththeCode. Second,theCodemustbeavailableandvisibletoallemployeesinvolvedinsupplychainrelatedactivities. Forsomeorganizations,thiswillinvolveallormostemployees.Forothers,itmayinvolveonlyfinance, managementandsupplychainemployees,withotheremployeesinvolvedasrequired.Regardless,thepolicy intentisthatallemployeesinvolvedwithsupplychainrelatedactivitiesmustbeawarethattheymust conductthemselvesinaccordancewiththeCode. Organizationsmaychoosetomaintainadifferentcodeofethicsaslongasitismateriallysimilartoormore comprehensivethantheSupplyChainCodeofEthicsinChapter4. AdetailedcompliancechecklistisavailableinSection4.4.1.

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4.3

SUPPLY CHAIN CODE OF ETHICS

Ontario Broader Public Sector Supply Chain Code of Ethics Goal: To ensure an ethical, professional and accountable BPS supply chain.

I. Personal Integrity and Professionalism All individuals involved with purchasing or other supply chain-related activities must act, and be seen to act, with integrity and professionalism. Honesty, care and due diligence must be integral to all supply chain activities within and between BPS organizations, suppliers and other stakeholders. Respect must be demonstrated for each other and for the environment. Confidential information must be safeguarded. All participants must not engage in any activity that may create, or appear to create, a conflict of interest, such as accepting gifts or favours, providing preferential treatment, or publicly endorsing suppliers or products. II. Accountability and Transparency Supply chain activities must be open and accountable. In particular, contracting and purchasing activities must be fair, transparent and conducted with a view to obtaining the best value for public money. All participants must ensure that public sector resources are used in a responsible, efficient and effective manner. III. Compliance and Continuous Improvement All individuals involved in purchasing or other supply chain-related activities must comply with this Code of Ethics and the laws of Canada and Ontario. All individuals should continuously work to improve supply chain policies and procedures, to improve their supply chain knowledge and skill levels, and to share leading practices.2

Sources:PurchasingManagementAssociationofCanadaCodeofEthics,OntarioPublicBuyersAssociation, PlexxusandTorontoDistrictSchoolBoard.

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4.4
4.4.1

SUPPORTING DOCUMENTS
SUPPLY CHAIN CODE OF ETHICS COMPLIANCE CHECKLIST

Thefollowingisachecklisttoassistorganizationsindeterminingwhethertheyhavesuccessfullyadoptedthe keyelementsoftheSupplyChainCodeofEthics. BPSorganizationsmustensurethattheSupplyChainCodeofEthicsortheorganizationalequivalent: a. Isdistributedtoallemployeesinvolvedinsupplychainactivities,includingbutnotlimitedto departmentssuchas: Purchasing; MaterialsManagement; InventoryManagement; Planning; Logistics/Distribution;and AccountPayables; b. c. d. e. f. g. h. Iscommunicatedtoallindividualsoutsidetheabovedepartmentswhoareinvolvedinpurchasingand othersupplychainrelatedactivities; Isvisibleinprocurementormaterialsmanagementdepartments; Isformallyapprovedandvisiblyendorsedbytheboardortheorganizationsmanagementteamin accordancewiththeorganizationsgovernancestructure; Iselectronicallyavailabletoallemployeesoftheorganizationthroughaninternalwebsiteor documentcentre; ContainsalltheelementsfoundunderPersonalIntegrityandProfessionalism; ContainsalltheelementsfoundunderAccountabilityandTransparency;and ContainsalltheelementsfoundunderComplianceandContinuousImprovement.

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ChapterV| Principle#2ProcurementPoliciesandProcedures
TheProcurementPoliciesandProcedures(PPP)governhowtheorganizationconductssourcing,contracting andpurchasingactivities,includingapprovalsegregationandlimits,competitiveandnoncompetitive procurement,purchasing,contractawarding,conflictofinterestandbidprotestprocedures. Thisisanumbrellastandardthatguidesandgovernsmanypossiblerelatedstandardsthatmaybeincluded infutureversionsoftheSupplyChainGuideline. ThisPrincipleistobeadoptedbyInScopeRecipientsbyMarch2010.

5.1
5.1.1

PURPOSE OF THE PROCUREMENT POLICIES AND PROCEDURES

OBJECTIVE

TheobjectiveofthePPPistoensureethical,efficientandaccountablesourcing,contractingandpurchasing activitieswithintheorganization.

5.1.2

RATIONALE

ClearandspecificpoliciesandproceduressupportSupplyChainCodeofEthicscompliance;enablethe efficientandeffectiveexecutionofsupplychaintasks;mitigaterisk;andhelporganizationsmeettheir operational,financialandaccountabilityobligations.

5.1.3

BENEFITS

A. FinancialStewardship Policiesandprocedureshelpmaintainafocusonvalueformoneywithrespecttobothsupplychain transactionsandtheunderlyingprocesses. B. ProcessEfficiency Policiesandprocedurescaneliminateredundant,nonvalueaddedactivitieswithintheoverall procurementcycle,maximizingserviceefficiency. C. CustomerService Documentedpoliciesandproceduresprovideinternalcustomers,suppliersandotherstakeholders withaclearpathforconductingsupplyactivities,improvingcustomerconfidenceandsatisfaction. D. RiskManagement Specificandtransparentpoliciesandproceduresreducebusinessriskandthepotentialforconflicts internallywithcolleaguesandexternallywithtradingpartners. E. EmployeeProductivity/Satisfaction Policiesandproceduresprovidecleardirectionandexpectationsforemployees,improvingproductivity andmorale. F. SupplierRelationships Policiesandproceduresestablishconsistentprocessesandexpectationsforworkingwithsuppliers, enhancingrelationships.

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5.2
5.2.1

ADOPTION OF THE PROCUREMENT POLICIES AND PROCEDURES

IMPLEMENTATION CONSIDERATIONS

TherearethreekeycomponentsforensuringthesuccessofthePPPstandard:

5.2.1.1

Establishing the Organizations Procurement Policies and Procedures

Manydifferentpoliciesandproceduresarerequiredtogovernprocurementactivitiessomeare applicabletoallormostorganizationswhileothersaremorespecialized.Inordertobebroadly applicableacrosstheBroaderPublicSector(BPS),thePPPoperatingstandardisfocusedinitsscope. Eachorganizationshouldexpanditasrequiredtomeettheneedsofitsinstitution.ThePPPoperating standardsetsouttheminimumrequirementsinSection5.4.2ListofMandatoryRequirements, whichcanbeaugmentedbutnotdiminished.

5.2.1.2

Compliance

CompliancewiththePPPwillbehighestwhenemployeesunderstandtherationaleforthemandthe benefitsthatresult.Threestepswillaccomplishthis: SupportreviewthePPPwithkeystakeholdersbeforetheyareimplemented,includingmanagement, supplychainstaffandinternalcustomers. Communicationperiodicallycommunicatethepoliciesandprocedurestoallkeystakeholders, includingthebenefits,togetherwithstrongmessagesofsupportfromseniorexecutivesandother keyinfluencers. Followupfollowupwithkeystakeholderstogatherfeedback.Theorganizationshouldbe continuouslyreviewingandimprovingthepoliciesandprocedurestofititsevolvingneeds.

5.2.1.3

Accountability

Itisimportanttoidentifywhowillbeaccountableforcompliance.Thesepoliciesandprocedures, whileownedbythesupplychaindepartment,shouldbeendorsedbytheseniorexecutive(s)ofthe organization.Seniormanagementisresponsibleforworkingwiththesupplychaindepartmentto ensurecompliancewiththesepoliciesandproceduresandtodetermineappropriatemeasuresin theeventofnoncompliance.

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5.3
5.3.1

PROCUREMENT POLICIES AND PROCEDURES

INTRODUCTION

ThePPPprovideacommonsetofrulesformanagingtheprocurementofgoodsandservicesacrosstheBPS. ThePPPwillsupportBPSemployeeswhoarepurchasinggoodsand/orserviceswithastandardized approachthatensuresefficiency,financialcontrol,qualityandvalueformoney.

5.3.2

APPLICATION AND SCOPE

ThroughtheSupplyChainGuideline,thePPPwillbeincorporatedintothefundingagreementsof organizationsreceivingmorethan$10millionperfiscalyearfromtheMinistriesofHealthandLongTerm Care,EducationorTraining,CollegesandUniversitiesasofApril1,2009.

5.3.3

CONTEXT

ThePPPisoneofthetworequirementsintheSupplyChainGuidelineVersion1.0.Itspurposeistosetoutkey rulesandexpectationstosupporttheefficientmanagementofaBPSorganizationsprocurementprocesses. ThePPPincorporates25mandatoryrequirementsthatmustbefollowedbytheBPSrecipients identifiedabove.AsummaryofthemandatoryrequirementshasbeenprovidedinSection5.4.2.

5.3.4

ELEMENTS

ThePPPemployssixelementsthatbalancetheobjectivesofreceivingvalueformoneywithaprocessthatis fairandtransparenttotheBPSanditssuppliers: 1. Accountability BPSorganizationsmustbeaccountablefortheresultsoftheirprocurementdecisionsandthe appropriatenessoftheprocessesfollowed. 2. DemandAggregation BPSbuyingpowermustbeleveragedthroughGroupPurchasingInitiativesacrossvariousgroupsand aggregatingdemandtoachieveeconomiesofscale. 3. QualityServiceDelivery ThefrontlineservicesprovidedbyBPSinstitutions,suchasteachingandpatientcare,dependonhaving therightproduct,attherighttime,intherightplacetobeeffective. 4. StandardizedProcess Idiosyncraticvariabilitywastestimeandmoney.Astandardizedprocessremovesinefficienciesand createsalevelplayingfield.Thesestandardizedprocesseshavebeendevelopedusingleadingpractices establishedandtestedinbothprivateandpublicsectors. 5. Transparency Publictrustiscritical.BPSinstitutionsmustbeopentoallstakeholders.BPSsuppliersmusthavefair accesstoinformationonprocurementopportunities,processesandresults. 6. ValueforMoney BPSinstitutionsmustmaximizethevaluetheyreceivefromtheuseofpublicfunds.Avalueformoney approachaimstodeliverproductsandservicesatthelowesttotallifecyclecostthatmeetsorexceeds expectations.

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5.3.5

RELATED GUIDELINES

InadditiontothesePPP,BPSprocurementactivitiesarealsogovernedbylegislationandothertrade agreements.WiththeexpectationthattheBPScomplieswiththekeyelementsofothergoverningmandates, legislationsandagreements,thePPPhasbeenharmonizedwiththefollowing: 1. 2. 3. 4. AgreementonInternalTrade(AIT); OntarioQuebecProcurementAgreement; CanadianLawofCompetitiveProcessesandContractLaw;and FreedomofInformationandProtectionofPrivacyAct(FIPPA).

Furtherdetailsoneachofthesecanbefoundinthesubsectionsbelow.

5.3.5.1

Agreement on Internal Trade (AIT)

SelectpartsoftheBPSaregovernedbytheAIT,whichregulatestradebetweentheprovincestoensure equalaccesstopublicsectorprocurementforallCanadiansuppliers.UnderthetermsoftheAIT,all procurementopportunitiesmeetingorexceedingthefollowingthresholdsmustbeaccessibletoall Canadiansuppliersthroughtheuseofelectronictenderingsystems,advertisementsindailynewspapers, ortheuseofsourcelists:

Government Ministries Goods Services Construction $25,000 $100,000 $100,000 Broader Public Sector $100,000 $100,000 $250,000 Crown Corporations $500,000 $500,000 $5 million

BPSorganizationsarerequiredtocomplywithanyamendmentstotheagreementthatmaybeapproved afterApril2009.

5.3.5.2

Ontario-Quebec Procurement Agreement

SimilartotheAIT,the1997OntarioQuebecProcurementAgreement,regulatestradebetweenOntario andQuebectoensureequalaccesstopublicsectorprocurementfortherespectivelocalsuppliers. TheAgreementcontainsthefollowingopencompetitiveprocurementthresholdsforgoods,services andconstruction:

Broader Public Sector Goods Services Construction $100,000 $100,000 $100,000

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ProcurementopportunitiesexceedingthesethresholdsmustbeaccessibletoallQuebecsuppliers throughtheuseofelectronictenderingsystems.Constructionopportunitiesareallowedtheadditional optionsofadvertisementsindailynewspapersortheuseofsourcelists. BPSorganizationsarerequiredtocomplywithanyamendmentstotheagreementthatmaybeapproved afterApril2009.

5.3.5.3

Canadian Law of Competitive Processes and Contract Law

WhentheBPSconductsasolicitation,thelawofcompetitiveprocessesapplies.Thereceiptof tendersand,insomecases,proposalsduringacompetitiveprocurementprocessmayresultinthe formationofabidcontract(alsocalledContractA)betweenaBPSorganizationandthesubmitter. Thus,BPSorganizationsmusttakespecialcaretounderstandtheobligationstheymakewhen solicitingbids,suchasrejectingnoncompliantbidsandnotdeviatingfromtheprocessdescribedin thebiddocuments.AbreachofContractAmayoccurifthesolicitingBPSorganizationsweretoprovide informationorchangethespecificationsduringthecompetitiveprocesstounfairlybenefitaparticular participant,enterintosidenegotiationswithanyparticipantinanefforttoobtainmoredesirable contractconditions,andsoon. WhenaBPSorganizationentersintoacontractualagreementwithasupplier(i.e.,ContractB), theagreementcreatesobligationsonbothpartiesandissubjecttoapplicablecontractlaw,including acceptedmeaningsandinterpretationsofenforceability,nonperformance,breachofcontract,remedies, andsoon.IndividualsmakingcommitmentsonbehalfoftheBPSorganizationmustbeawareofthe liabilitiestheycreate,andshouldexerciseextremecareindevelopingand/orrevisingcontractlanguage. PersonsengagedinprocurementactivitiesonbehalfofaBPSorganizationshouldbeawareof theimplicationsofapplicableCanadianlawandtheresultingimportanceofprofessionalconduct. Thecompetitiveprocessitselfmayresultintheformationofcontractualobligationsontheorganization andallcontractdocuments,competitiveprocurementdocumentsandanycorrespondenceorsupporting informationrelatinginanywaytoacompetitiveprocurementprocessaresubjecttosubpoenabya Canadiancourtoflaw.Authorsofsuchdocumentsmaybecompelledtodefendorotherwiseexplain themincourt. Section5.4.3providesabriefdiscussionofCanadianlawapplicabletoprocurement.

5.3.5.4

Freedom of Information and Protection of Privacy Act (FIPPA)

ThepurposesofFIPPA(sometimesreferredtoasthePrivacyAct)aretomakepublicbodiesmore accountabletothepublicandtoprotectpersonalprivacy.FreedomofInformationandProtection ofPrivacyActaccomplishesthesepurposesby: a. b. Providingthepublicwitharightofaccesstorecordswithinthepublicbodies'custodyor control;and Preventingtheunauthorizedcollection,useanddisclosureofpersonalinformation.

TheprovisionsofFIPPAmayaffecttheprocurementprocessandthewaycontractdocuments aredrafted.

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PersonsengagedinprocurementactivitiesonbehalfoftheBPSshouldbeawareoftheimplicationsof theFreedomofInformation(FOI)requirementsofFIPPAandtheresultingimportanceofprofessional conduct.Specifically,allnotes,emails,memos,lettersoranyotherdocumentationrelatingtoa competitiveprocurementprocessareordinarilysubjecttoFIPPArequests. FreedomofInformationrequestscanbeandhavebeenmadeforinformationontenderingand administrationofcontracts.AnyrecordsorequestedmustbedisclosedinitsentiretyunlessFIPPA exceptionstodisclosureapplytoallorpartoftherequest.

5.3.6

SEGREGATION OF DUTIES AND APPROVAL AUTHORITY LEVELS

Segregationofdutiesanddelegationofauthorityareessentialcontrolswithinthepurchasingtopayprocess. Together,theyensureintegrityoftheprocessbyreducingexposuretoinappropriate,unauthorizedor unlawfulexpenditures.

5.3.6.1

Segregation of Duties

Effectivecontrolinanorganizationincludesboththedelegationofauthorityandsegregationofduties acrossfunctionsandindividuals.Segregationofdutiespreventsanyonepersonfromcontrollingthe entirepurchasingprocessbysegregatingapprovalsforthekeystagesofthesupplychainprocess. Therearetypicallyfiveprocurementrolesthatrequiresegregatedapprovalasillustratedbelow: RecommendedFramework:TypicalProcurementRolesRequiringSegregationofDuties

Roles Requisition Budget Explanation Authorize the supply chain department to place an order Authorize that funding is available to cover the cost of the order Authorize release of the order to the supplier under agreed-upon contract terms Authorize that the order was physically received, correct and complete Authorize release of payment to the supplier Who Customer requesting the product or service Departmental budget holder Purchasing role in the supply chain department Individual receiving the goods Accounts Payable role within the finance team

Commitment

Receipt Payment

Mandatory Requirement #1 BPS organizations must segregate at least three of the five functional roles. Responsibilities for these functions should lie with different departments or at a minimum with different individuals. In circumstances where it is not feasible to segregate three roles, as in the case with smaller organizations, adequate compensating controls approved by the external auditor will be acceptable.

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5.3.6.2

Approval Authorities

BPSorganizationsmusthaveauthoritylevelsthatidentifytheapprovalsrequiredforvariousdollar levelsofpurchasing.Thesedelegatedauthoritylevelsmustbecompliedwithforeveryitemthatis purchasedbytheorganization.BPSorganizationsmustseekthenecessaryapprovalauthorityforall procurementspriortoconductingtheprocurement.Approvalsforprocurementsmustbebasedonthe totalestimatedvalueoftheprocurement,includinganyagreeduponrenewals. Anorganizationsdelegationofauthoritydefinesapprovallevelscorrespondingtojobrolesinthe organizationandensuresthateachindividualsapprovalauthorityiscommensuratewiththe responsibilitylevelforhisorherposition.Theauthoritylevelsshouldbedelegatedbytheboard ofdirectors. Eachorganizationshouldhaveachartsimilartotheonebelowthatidentifiesthedollarthresholdof approvalsforeachleveloftheorganization.Thistablesetsoutthecommitmentauthority,i.e.,theperson authorizedtocommittheorganizationtoapurchase.Thepositionsandpurchasingauthoritylevelsinthe chartbelowaremeanttobeusedasaguideonly,aseachorganizationwillhaveitsownpositionsand delegatedauthoritylevels. Example*:CommitmentApprovalAuthoritySchedule
Total Purchase Amount <$10,000 $10,000$50,000 $50,000$250,000 $250,000$1,000,000 >$1,000,000 Delegated Purchasing Authority level Manager Director Vice-President President/CEO Board of Directors

*Organizationsmayusetheirdiscretionindefiningpurchasingauthoritythresholdsinaccordancewiththe sizeandapplicablerolesoftheirorganization.
Mandatory Requirement #2 BPS organizations must have a documented delegation of authority schedule that outlines the organizations authority levels for each of the five functional roles described in the segregation of duties (Section 5.3.6.1) and seek the necessary approval for all procurements prior to conducting the procurement.

AsampleapprovalformisprovidedinSection5.4.6.1:SampleProcurementApprovalAuthorityForm includingNonCompetitiveAwardBypass.

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5.3.7

COMPETITIVE VS. NON-COMPETITIVE PROCUREMENT PROCESS DETERMINATION

Thissectiondefinestheminimumcompetitiverequirementsforpurchases.Therespectiveprocurement processesaredefinedin: a. b. Section5.3.8:CompetitiveProcurement;and Section5.3.9:NonCompetitiveProcurement.

5.3.7.1

Competitive Process Requirements

Mandatory Requirement #3

In accordance with the AIT, the Ontario-Quebec Procurement Agreement and the PPPs principle of transparency, BPS organizations must conduct open competitive procurements where the estimated value of procurement of goods, services or construction3 is $100,000 or greater.

Fortheprocurementofgoods,servicesandconstructionwithanestimatedvaluelessthanthethresholds above,BPSorganizationsarestronglyencouragedtoconsideropencompetitiveprocurementsor,ata minimum,aninvitationalcompetitiveprocurement.Aninvitationalcompetitiveprocurementisachieved byrequestingthreeormoresupplierstosubmitabidinresponsetotheorganizationsrequirements. EachBPSorganizationshouldcreateitsownrulesforprocurementsbyvalueforpurchasesbelow $100,000,aspertheexamplebelow,inaccordancewiththesizeandneedsofitsorganization. Example**:ProcurementProcedureThresholdsbyProcurementValue

Total Procurement Value <$100 <$3,000 <$10,000 <$100,000 goods, services and construction >$100,000 goods, services and construction Procedure Petty cash Purchasing card Purchase order Invitational competitive procurement (minimum of three suppliers invited to bid) Open, competitive process Example X X X X Mandatory

**OrganizationsmayusetheirdiscretionindefiningTotalProcurementValuelimitsfortheProcedures markedasExamplesinaccordancewiththesizeandneedsoftheirorganization. Adivisionofrequirementsintomultipleprocurementstoreducetheestimatedvalueofasingle procurementandavoidtheapplicationoftheidentifiedvaluethresholdsisnotpermitted.

3

ThethresholdforconstructionhasbeensettoalignwiththelowerofthetworequirementsassetbytheAITandthe OntarioQuebecProcurementAgreementrespectively.

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5.3.8 COMPETITIVE PROCUREMENT 5.3.8.1 Information Gathering

InformationgatheringmechanismsareusefulforsituationswhereaBPSorganizationhasincomplete informationabouteithertheprocurementthatitrequiresorthecapabilitiesofthemarkettodeliver thematerial,service,orthesolutionrequired.Theinformationgatheredduringoneoftheprocesses outlinedwillhelptheBPSorganizationplanafairandcosteffectiveprocurementprocess,definethe requirementsfortheprocurementdocuments,oridentifywhethertherearequalifiedand/orinterested suppliers.Wheninformalresearchandinformationgatheringisinsufficient,thefollowingformal processesmaybeusedwherewarranted,recognizingthetimeandeffortrequiredtoconductthem, forthepurposesdescribedbelow:

5.3.8.1.1

Request for Information (RFI)

ThepurposeofanRFIistogathergeneralsupplierorproductinformation.Thismechanismmaybeused whenaBPSorganizationisresearchingacontemplatedprocurementandhasnotyetdeterminedwhat characteristicstheidealsolutionwouldhave(e.g.,thebusinessdesiresanewwarehousemanagement systembutisunsureofwhichfeaturesaremostimportantandneedsmoreinformationtounderstand whatisavailableandwhatarethesupplierscapabilities). ResponsestoRFIquestionsnormallycontributetothefinalversionofasubsequentRequestfor Proposals(RFP)andmayincludetargetedquestionsabouttherequiredoutput/acquisition,seeking combinationsofindustryleadingpractices,suggestions,expertiseandevenconcernsandadditional questionsfromproponents.

5.3.8.1.2

Request for Expressions of Interest (RFEI)

ThepurposeofanRFEIistogatherinformationonsupplierinterestinanopportunityorinformationon suppliercapabilities/qualifications.ThismechanismmaybeusedwhenaBPSorganizationwishestogain abetterunderstandingofthecapacityofthesuppliercommunitytoprovidetheservicesorsolutions needed.Informationcollectedcanalsofacilitateselectingthebestpossiblecompetitionmethodfora followupcompetition.

Mandatory Requirement #4 A response to an RFI or RFEI must not pre-qualify a potential supplier and must not influence their chances of being the successful proponent on any subsequent opportunity.

WhereaBPSorganizationwishestocreateaprequalifiedsupplierlisttobeusedforoneormorefuture procurements,aRequestforSupplierQualifications(RFSQ),asdescribedbelow,shouldbeused.

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5.3.8.1.3

Request for Supplier Qualifications (RFSQ)

ThepurposeofanRFSQistogatherinformationonsuppliercapabilitiesandqualifications,withthe intentionofcreatingalistofprequalifiedsuppliers.Thismechanismmaybeusedeithertoidentify qualifiedcandidatesinadvanceofexpectedfuturecompetitionsortonarrowthefieldforanimmediate need.Thepurposeofthisprocessistoreducesubsequenteffortdevotedtothecompetitiveprocess (i.e.,bidpreparationonthepartofsuppliersandevaluationonthepartoftheBPS),asdetailed furtherhere: a. AnRFSQcanbeusedtounderstandwhichpotentialproponentshavethecapabilitiesthataBPS organizationrequires,asthefirststageinatwostagesolicitation(followedbyeitheraRequest forProposaloraRequestforTender),wherebyonlyprequalifiedsupplierswillbeinvitedto respondtotheactualcompetition.Thiscanmakethenumberofresponsesandtheevaluation processmoremanageablefortheevaluators,whileallowingunqualifiedproponentstoavoidthe effortandexpenseofpreparingacompletecompetitiveresponse. AnRFSQcanbeusedtoprequalifysupplierswhoareinterestedinsupplyingmaterialsorservicesin thefutureif,asandwhenrequested.ThetypicalresultofthisprocedureisaVendorofRecord (VOR)orapreferredsupplierslist.

b.

AnRFSQdocumentshouldspecificallydefinethetypeofmaterialsorservicesincludedaspartofthe process,andsetupperlimitstothevalueoffutureawards.TheRFSQdocumentshouldalsoclearly indicatethetimedurationthelististobevalid,themethod(s)bywhichsupplierscanbeplacedonthe list,andatwhatspecificintervalsopportunitiesforbeingqualifiedwillcomeup.Thedocumentshould alsoindicatethatsupplierswhodonotparticipateintheprequalificationordonotappearonthelist maybeexcludedfromopportunities.IftheVORorpreferredsupplierslististobeusedforprocurements over$100,000,asupplierthatmeetstheconditionsforregistrationonthelistmustbeabletoregisterat anytime. AVORorpreferredsupplierslistmayfollowanumberofformatswiththeintentoffacilitatingoneor morepotentialsupplierselectionprocesses,butinallcasesmustbeusedaccordingtoprocedure, asoutlinedintheadvertisedRFSQdocument.Typicalprequalifiedsupplierlistsforfutureopportunities canbesegmentedbyregion,containarankedlistofsuppliers,orsimplycontainsuppliernames.

Mandatory Requirement #5 BPS organizations must ensure that the terms and conditions built into the RFSQ contain specific language to disclaim any obligation on the part of the BPS organization to actually call on any supplier as a result of the pre-qualification to supply such materials or services.

Inotherwords,theintentionisthatnoContractA(bidcontract)orContractB(performancecontract) willbeformedbetweenthebuyingBPSorganizationandtheprequalifiedsuppliersaspartofthis process.

5.3.8.1.4
a.

General Guidelines on Information Solicitation

RFIsandRFEIsarenotcompetitionsmeanttoresultintheawardofwork;therefore,acorrectly executedinformationsolicitationprocessshouldnotresultinalegalcontract(ContractAorbid contract)withaproponent.Careshouldbetakentoavoidlanguagethatmaycreateacommitmentor liabilityonthepartoftheprocuringBPSorganization;

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b.

Sinceitisgenerallydesirabletoreachalargepopulationofpotentialsupplierswhenseeking information,itisrecommendedthatorganizationsusecommonelectronictenderingmethodsfor RFIsandRFEIs.Someexamplesofcommonlyusedelectronictenderingwebsitesaredescribed in5.4.5QuestionandAnswer;and RFIsandRFEIsshouldnotaskforproprietaryinformationfromsuppliers.

c.

Thesuggestedusesofallthreeinformationgatheringmechanismsaresummarizedinthefollowingtable.
Information Required General supplier or product information Information on supplier interest in opportunity Information on supplier capability/qualifications Pre-qualified suppliers' list desired RFI X X X X X RFEI RFSQ

5.3.8.2

Purchasing

ThefollowingsectionsareintendedtohelpBPSorganizationsplanacompetitiveprocurement. TheyoutlinethepoliciesandproceduresrequiredwhenaBPSorganizationproceedswitha competitiveprocurement. AProcurementLeadmustbeassignedforeachprocurement,whowillbeaccountableforthe requirementsofthisdocument.

5.3.8.2.1

Vendors of Record (VOR)/Preferred Suppliers List

Vendorsofrecordareusedtoreducecostsbyestablishingstrategicrelationshipswithasmallgroupof suppliers.AVORcanalsobecalledapreferredsupplierslist,withthepremisebeingthatorganizations shouldtrytofocusasmuchprocurementspendaspossiblethroughtheirVORorpreferredsuppliers, wheretypicallythebestpriceisachieved. ManyVORarrangementshavebeenestablishedbytheMinistryofGovernmentServices(MGS). ForalistofVORarrangements,pleasevisittheMGSSupplyChainManagement(SCM)website http://www.doingbusiness.mgs.gov.on.ca.ThiswebsiteallowsOntarioPublicSectorandBroaderPublic SectororganizationstoviewthelistofVORarrangementsandidentifyopportunitiestoleveragethose arrangements.BPSorganizationswishingtoreviewtheVORinformationandcontractswillneed toregisterasabuyeronthewebsite.Instructionsforregistrationareoutlinedonthewebsite.NewVOR arrangementsareestablishedonaregularbasissoorganizationsshouldconsultthewebsiteregularly forthemostcurrentlist.ItisimportanttonotethatnotallthecontractslistedareopentoBPS organizationsandforsomeofthosecontractsthatareopentotheBPS,preferredpricingmaynotapply. OrganizationsmayalsoestablishorganizationspecificVORarrangementsforthesupplyofacertain categoryofgoods,servicesorconstruction.AVORarrangementmaybeestablishedonlythroughanopen andcompetitiveprocurementprocessandrequireappropriateapprovalauthority.Organizationspecific VORarrangementsmustbefortheexclusiveuseofthatorganizationandmaynotbeutilizedbyany otherorganization.MultiorganizationalVORarrangementsmaybeestablishedwherethereisan identifiedneedforacommoncategoryofgoods,servicesorconstructionamongtwoormore organizations.

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AVORarrangementrequiresasecondstageselectionprocesstoassistpurchasingorganizationsin obtainingbestvalueformoney.Giventhatanopencompetitionhasalreadyoccurredtoestablishall VORarrangements,thesecondstageselectionprocessshallbeconcernedonlywiththeparticulargoods, servicesorconstructionprojecttobeprocured,includingthespecificneedsandissuesforaparticular assignmentorproject,suchascontractprice,theresourcestobeassigned,availabilityandtimelinesto completetheassignmentorproject. BPSorganizationsmayusesourcelists,suchasVORsorpreferredsupplierslistsforcompetitive procurements,providedthatforanysourcelist: a. b. c. Theopportunitytoregisteronthesourcelisthasbeenadvertisedcompetitivelyonanelectronic tenderingsystem; Asupplierthatmeetstheconditionsforregistrationonthesourcelistisabletoregisteratany time;and Allregisteredsuppliersinagivencategoryareinvitedtorespondtoallcallsforcompetitive procurementinthatcategory.

WhenusingVORsandpreferredsupplierslists,BPSorganizationsshouldbelookingtoreceivebetter valuefortheirinvestmentandsavingsthroughdemandaggregationasstatedintheprinciplesofthis document.Organizationsmustensurethattheyarereceivingpreferredpricingfromtheirsuppliersas thisisoneoftheprimaryreasonsforhavingthearrangement.Inreturnfortheopportunityofbeingon theorganizationspreferredlist,thesupplierofferspreferredpricing.

5.3.8.2.2

Competitive Documents

Foranopencompetitiveprocess,BPSorganizationsneedtodevelopcompetitivedocumentsthatcanbe providedtopotentialproponentstoexplaintheorganizationsrequirements. Organizationsmustincludeadescriptionoftheneededgoods,servicesorconstructioningenericand/or functionaltermsspecifictothebusinessneedsthatthegoodorservicewillserveinallprocurement documents.Whentheuseofnongenericand/ornonfunctionaltermsisappropriate,thespecifications mustdealwithperformancerequirementsandexcludeallfeaturesthatcouldunfairlyconferan advantagetocertainsuppliers.Forinformationtechnology(IT)procurements,organizationsmay expressrequirementsintermsofcorporateororganizationITstandardsasanalternativeto functionalterms. Inaddition,thedocumentsmustinclude: a. Fulldisclosureoftheevaluationcriteria,processandmethodologytobeusedinassessing submissions.Thecompetitivedocumentsshouldclearlyidentifytherequirementsofthe procurement;thecriteriathatwillbeusedintheevaluationofbids;andthemethodsofweighting andevaluatingthecriteria.Thecompetitivedocumentsmustalsoidentifythosecriteriathatare consideredmandatoryandanytechnicalstandardsthatneedtobemet; Thename,telephonenumberandlocationofthepersontocontactforadditionalinformationon theprocurementdocumentsandastatementthatsupplierswhogooutsideofthiscontactperson maybedisqualified; Conditionsthatmustbemetbeforeobtainingprocurementdocumentssuchasconflictofinterest declarations,confidentialityagreementsandnondisclosureagreements,ifappropriate;

b.

c.

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d. e. f. g.

Theaddress,dateandtimelimitforsubmittingbidstoprocurementdocuments.Bidsreceivedafter theclosingdateandtimemustbereturnedunopened; Theprocess,dateandtimelimitforthesubmissionofquestionsandbidsontheprocurement documents; Thetimeandplaceoftheopeningofthebidsintheeventofapublicopening; Thesubmissionrulesandcompetitiveclausestobefollowed,whichmayincludebidformat, language,inclusionofanexecutivesummary,numberofcopiesrequired,attendanceatabidders conferenceandanyadditionalrulestobefollowedinordertobeconsideredacompliantbid; Adraftcopyofthecontracttobesignedintheeventofanawardoftheprocurement; Arequestforalistofanysubcontractorstobeusedtocompletetheprocurement; Theperiodofirrevocabilityofbidswherebidscannotbewithdrawn(typically120daysfrom theclosureofthecompetitiveprocess); Forgoods,servicesandconstructionvaluedat$100,000ormore,astatementthatthe procurementissubjecttoOntario'stradeagreements;and Noticethatanyconfidentialinformationsuppliedtotheorganizationmaybedisclosedbythe organizationwhereitisobligedtodosounderFIPPA,byanorderofacourtortribunalor otherwiserequiredatlaw.

h. i. j. k. l.

Twomaintypesofcompetitivedocumentsaredescribedbelow: a. RequestforProposal(RFP):Thepurposeofthisdocumentistorequestsupplierstosupplysolutions forthedeliveryofcomplexgoods,servicesorconstructionortoprovidealternativeoptionsor solutions.Itisaprocessthatusespredefinedevaluationcriteriainwhichpriceisnottheonlyfactor. RequestforTender(RFT):Thepurposeofthisdocumentistorequestsuppliersbidstosupply goods,servicesorconstructionbasedonstateddeliveryrequirements,performancespecifications, termsandconditions.AnRFTusuallyfocusestheevaluationcriteriapredominantlyonpriceand deliveryrequirements.ThisdocumentmayalsobecalledaRequestforQuotation(RFQ)wherethe organizationhasdescribedexactlywhatneedstobepurchasedandtheevaluationismadesolely onprice.

b.

5.3.8.2.3

Advertising and Posting Competitive Documents to Market

TheBPSadvertisingandpostingpracticesduringacompetitiveprocessmustutilizeacceptedmediumsin ordertoupholdtheprinciplesoffair,openandtransparentdealings;toencouragemaximumcompetitive response;andtoensurethatsuppliershaveapositiveexperienceindealingwithapurchasing organizationfromtheBPS.

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Mandatory Requirement #6 In accordance with the AIT, calls for competitive procurements shall be made through an electronic tendering system that is equally accessible to all Canadian suppliers. Construction contracts between $100,000 and $250,000 are not subject to the requirements of the AIT. Calls for those competitive procurements can be made through an electronic tendering system and/or one or more of the following methods: a. b. Publication in one or more predetermined daily newspapers that are easily accessible to all Canadian suppliers; or The use of source lists, such as VORs or preferred suppliers lists.

Transparencyandopennesscanbebestachievedthroughtheuseofonecommonelectronicsystem. TheOntarioPublicsectorcurrentlyhasacontractinplacewithMERX(www.merx.com)tosupport thisgoalonaprovinciallevel.ThiscontractisavailabletotheBPSandshouldbeusedbyall BPSorganizations. TheAITrecommendsthattendernoticesforallopportunitiesbepostedonanationalelectronic tenderingsystem,theAlbertaPurchasingConnection(APC)toalertallsupplierstothecompetition. TheAPCwebsiteislocatedat:www.purchasingconnection.com.MERXwillhelporganizationsto fulfillthisrequirementbyforwardingtendernoticestoAPCforBPSopportunitiespostedonMERX. TendernoticespostedonAPCshallincludeatleastthefollowing: a. b. c. d. e. f. g. Abriefdescriptionoftheprocurementcontemplated; Wheretoobtaintenderdocumentsandfurtherinformation; Theconditionsforobtainingtenderdocuments; Placewheretendersaretobesubmitted; Dateandtimeforsubmittingtenders; Timeandplaceofpublicopening,ifapublicopening;and StatementthattheprocurementissubjecttotheprovisionsoftheAITAnnex502.4.

5.3.8.2.4

Communications during Competition

Thecompetitionprocessbeginswhenthecompetitiveprocurementdocumentsareissuedandendson theclosingdate;thisiscommonlyreferredtoastheblackoutperiod.Thesupplychaindepartmentis responsibleformanagingtheprocessthroughtocontractaward. Duringtheblackoutperiodinallcompetitionsituations,itisimperativethatallcommunicationwith suppliersinvolvedintheprocessoccurformally,throughthecontactpersonidentifiedinthe competitivedocuments. Duringthecompetitiveperiod,thecompetitiveprocurementdocumentsmaybeclarifiedormodified throughtheuseofoneoftwotypesofresponses: a. b. Anaddendumresponse;or Aquestionandanswer(Q&A)response.

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AddendaandQ&Asarepostedinthesamemannerasthecompetitivedocumentswereadvertisedtothe marketandthereforeshallbemadeavailabletoallpotentialproponents.Standardsfortheseandother communicationmechanismsareincludedinthesubsectionsthatfollow. Addendumresponse:Anaddendumispreparedifmodificationstothecompetitiveprocurement documentsarenecessary(e.g.,amending,addingordeletinginformationduetoerrors,conflictsor deficienciesinthedocuments).Anaddendummaymodifythedocumentsby: a. b. c. d. Insertingnew,revisedorrepaginatedpages; Insertingneworreviseddrawings; Deletingpagesordrawings;and/or Insertingpagesthatwereinadvertentlyomittedfromthepostedcompetitive procurementdocuments.

AllAddendamustbeissuedatleastsevendayspriortotheclosingdate.Ifanaddendumisissuedwithin sevendaysoftheclosingdate,thedateshouldbeextendedaccordingly. Questionandanswerresponses:AQ&AresponseispreparedifclarificationoftheRFP/RFT documentsisrequiredwithouttheneedtomodifythepostedcompetitiveprocurementdocuments. Anyanswerthatresultsinachangetoanyaspectofthecompetitiveprocurementdocumentsmust beaddressedbymakingcorrespondingmodificationstothedocumentsbyanaddendum.Generally, questionsarerequestedtobesubmittednolessthansevendayspriortotheclosingdate,although questionsmaybeconsideredafterthatand,ifwarranted,considerationmaybegiventoextending theclosingdate,takingintoaccounttheprojectschedule.Theobjectiveistoensurethatall proponentsreceiveasmuchrelevantinformationaspossible.

5.3.8.2.5

Timelines for Posting Competitive Procurements

BPSorganizationsmustgivepotentialproponentsenoughtimetoprepareasufficientresponseforthe competitiveprocess.Thegoalofthecompetitiveprocessshouldbetoreceivethehighestnumberof qualitybidspossible,soastomaximizetheorganizationsabilitytoachievebettervalueformoney.

Mandatory Requirement #7 Purchasing BPS organizations must provide suppliers a minimum response time of 15 calendar days for procurements valued at $100,000 or more.

BPSorganizationsshouldconsiderprovidingresponsetimeslongerthan15daystoensurethat suppliershaveareasonableperiodoftimetosubmitabid.Thetimelineshouldalsotakeintoaccount thecomplexityoftheprocurementandthetimeneededbytheorganizationtoproperlydisseminate theinformation.

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5.3.8.2.6

Bidders Conference

Biddersconferencesareheldifthepurchasingorganizationbelievesthereisinformationthatpotential proponentswillbetterunderstandiftheinformationispresentedtothem(i.e.,askingcontractorsto outfitabuildingwithelectricityiseasiertorespondtoafterbeinggivenasitetour).Biddersconferences areusuallyheldshortlyafterthepostingofthecompetitivedocumentstogiveproponentsampletimeto craftresponsesbasedontheinformationgivenatthebiddersconference.Atthebiddersconference, onlytheprocurementinquestioncanbediscussedandanyquestionsandanswersthatwerediscussed needtobedocumentedandprovidedtoallproponents,whetherornottheywereinattendance. TheBPSorganizationshoulddeterminewhetherabiddersconferencewillbeapartofthecompetitive process.Abiddersconferenceshouldcoveralltheessentialinformationfromthecompetitive documents,includingthefollowing: a. b. c. d. e. Scopeandrequirementsoftheprocurement; Submissionguidelines(rulesofthecompetitiveprocess); Timelinesforthecompetitiveprocess,includingdeadlinesforquestionsandsubmissions; Evaluationcriteria,processandmethodology;and Contactinformation.

TheBPSorganizationshouldalsodeterminepriortopostingthecompetitivedocumentswhetherthe biddersconferenceismandatory,meaningthatifpotentialproponentsdonotattend,theirbidswillbe returnedunopened.

5.3.8.3

Evaluation

5.3.8.3.1

Bid Receipt

Alleligiblebidsmustbesubmittedbytheclosingtimespecifiedinthecompetitiondocument.
Mandatory Requirement #8 BPS organizations must ensure that the closing date is set on a normal working day (Monday to Friday, excluding provincial and national holidays). Submissions that are delivered after the closing time must not be considered.

Forbidswherepapercopieshavebeensubmitted,itisimportanttoidentifybidopeninginformationin thecompetitivedocuments,includingwherethebidswillbeopenedandwhocanattend.Theprocessfor openingpaperbidsisasfollows: a. b. c. d. Stampeachbidasitarriveswiththedate,time,location,companynameandcontactinformation; Donotopenanybidsuntilafterthecompetitiveprocesshasclosed; Ensurethereisatleastonewitnesstoviewthebidopenings;and Openthebidsfollowingthesameprocessthatwasdocumentedinthepostedcompetitive documents.

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5.3.8.3.2

Evaluation Criteria

Everycompetitiveprocessmustestablishevaluationcriteria.Theevaluationcriteriawillbeusedbythe organizationtodecidewhichbidshouldbeselectedfromthecompetitiveprocess. Inevaluatingbids,anorganizationmaytakeintoaccountnotonlythesubmittedpricebutalsoquality, quantity,transitioncosts,delivery,servicing,environmentalconsiderations,thecapacityofthesupplier tomeetrequirementsofprocurement,experience,financialcapacityofthesupplier,andanyother criteriadirectlyrelatedtotheprocurement.Organizationsmustpayparticularattentiontoapplythe maximumjustifiableweightingtoprice/costaspartoftheevaluationcriteria. ForITprocurements,organizationsmustassessconversioncosts,ifappropriate.Inestablishingthe evaluationcriteriaandweightingofconversioncosts,BPSorganizationsmustnotundulyfavouran incumbentsupplierorundulydisadvantagenonincumbentsuppliers.
Mandatory Requirement #9 Evaluation criteria should be developed, reviewed and approved before the competitive process begins. These criteria must be included in the competitive documents. The competitive documents must also identify those criteria that are considered mandatory and any technical standards that need to be met. The evaluation criteria cannot be changed or altered once the competitive process has begun.

Typically,anevaluationprocesscomprisesthreecomponents:mandatoryrequirements,rated requirementsandprice/cost.BPSorganizationsmustensurethattheydonotrequestinformationfrom suppliersthatwillnotbeevaluatedoraffecttheevaluationprocess. Itisrecommendedthatorganizationsperformasensitivityanalysisontheselectedcriteriaandassigned weightingbeforethecriteriaarefinalizedandpostedinthecompetitivedocuments.Thiswillensurethat thecriteriaandweightingwilldeliverthedesiredoutcomeandwillconfirmtherelativeimportanceof thevariouscriteria.

5.3.8.3.3

Evaluation Process

Thefirststepintheevaluationprocessistoascertainwhethersubmissionsarecompliant. Submissionsmaybeconsideredtobemateriallycompliant,butcertainclarificationsmaybesought. Materiallynoncompliantsubmissionsshouldberejected.Oncethecompliantsubmissionshavebeen identified,theBPSorganizationshouldproceedwiththebalanceoftheevaluationprocess.

Mandatory Requirement #10 BPS organizations must fully disclose the evaluation methodology and process to be used in assessing a suppliers submission.

Afulldisclosureoftheevaluationmethodologyandprocessmustincludethefollowing: a. Acleararticulationofallmandatoryrequirements.Organizationsmustindicateifthemandatory requirementswillbeassessedonapass/failbasisandindicatehowsuppliersachieveapassing grade.Whereasupplierisdisqualifiedfornoncompliancewithamandatoryrequirement,no furtherevaluationshouldtakeplace;

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b. c. d. e.

Allweights,includingsubweights,forratedrequirements.Whereasupplierfailstomeetastated minimumscoreforratedrequirementsnofurtherevaluationshouldtakeplace; Descriptionofanyshortlistingprocesses,includinganyminimumratedscorerequirements; Theroleandweighting,ifapplicable,ofreferencechecks,oralinterviewsanddemonstrations;and Descriptionsoftheprice/costevaluationmethodology,includingtheuseofscenariosinthe evaluationprocess,todeterminecostsforspecificvolumesand/orservicelevels.Theevaluation ofprice/costmustbeundertakenonlyaftercompletionoftheevaluationofthemandatory requirementsandanyotherratedcriteriaforallbids.

5.3.8.3.4

Evaluation Team

Everycompetitiveprocessrequiresanevaluationteamthatwillberesponsibleforreviewingallthe compliantbidsandscoringeachofthosebids.Theevaluationteammaybedifferentforeachcompetitive processexecutedbyanorganization,dependingontheexpertiserequiredtohelpmakethedecision. Thefollowingshouldbeconsidered: a. Evaluationteammembersshouldbeselectedandtheirparticipationconfirmedbeforethe competitivedocumentshavebeenposted.Ideally,theevaluationteammemberswillhavebeen includedinthedevelopmentoftheevaluationcriteriaandweighting.Teammembersmayinclude clinicians,educators,supplychainexperts,subjectmatterexperts,financialexpertsand representativesoftheprocurementfunctionoftheorganization.Evaluationteamsshouldbe composedofappropriatememberstoensurethataproperevaluationisconducted. AnEvaluationTeamLeadshouldbeselectedbytheevaluationteammemberstoberesponsiblefor coordinatingtheevaluationprocess. Itisrecommendedthatarepresentativeoftheprocurementfunctionparticipateintheoversight oftheprocess,ifnotparticipatingaspartoftheevaluationteam. Organizationsshouldputtogetheranevaluationprocessguideforevaluationteams,outliningthe rolesandresponsibilitiesofteammembers.

b. c. d.

Asampleevaluationprocessguide,includingasampleevaluationmatrix,isprovidedinSection5.4.6.2: SampleEvaluatorHandbookincludingEvaluationMatrix.
Mandatory Requirement #11 Evaluation team members must be aware of the restrictions related to confidential information shared through the competitive process and refrain from engaging in activities that may create or appear to create a conflict of interest. BPS organizations must require team members to sign a conflict-of-interest declaration and non-disclosure agreement.

AsampletemplateisprovidedinSection5.4.6.6:SampleEvaluationTeamConflictofInterestDeclaration andNonDisclosureAgreementTemplate.

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5.3.8.3.5

Selection Process
Mandatory Requirement #12

BPS organizations must ensure that each member of the evaluation team has completed an evaluation matrix rating each of the proponents. Records of evaluation scores must be auditable. Evaluators should be aware that everything they say or document must be fair, factual, fully defensible and may be subject to public scrutiny.

Mandatory Requirement #13 BPS organizations must select only the highest ranked submission(s) that have met all mandatory requirements set out in the related procurement document. In responding to procurement documents, suppliers may sometimes propose alternative strategies or solutions to the organizations business needs. Unless expressly requested in the procurement documents, organizations must not consider alternative strategies or solutions proposed by a supplier.

Mandatory Requirement #14 The method to resolve a tie score must be identified in the evaluation criteria of the RFP, including weighting, if applicable. Tie-break criteria are also subject to the rules of nondiscrimination defined in Section 5.3.8.3.6.

Additionalconsiderationsduringtheselectionprocessinclude: a. b. Organizationsareentitledtoaskproponentsforclarificationontheirbidaslongasitdoesnot changetheirbidinanyway. Wherebidsarereceivedinresponsetoasolicitationbutexceedtheorganizationsbudget,arenot responsivetotherequirementordonotrepresentfairmarketvalue,arevisedsolicitationcanbe issuedinanefforttoobtainanacceptablebid. Ifnobidsareacceptableanditisnotreasonabletogothroughanyothermethod,organizationsmay choosetonegotiatedirectlywithachosensupplier.

c.

Anyproponentwhosesubmissionisrejectedduringtheevaluationprocesswillbenotifiedofthe rejectioninwritingassoonaspracticableaftercompletionoftheevaluation.Withtheexceptionofany pricingthatwasmadepubliclyavailableatthetimeofapublicopening,allsubmissionevaluationdetails mustbekeptconfidential.

5.3.8.3.6

Non-Discrimination
Mandatory Requirement #15

In compliance with the AIT, BPS organizations must refrain from any discrimination or preferred treatment in awarding a contract to the preferred supplier from the competitive process, unless justifiable based on the circumstances described below.

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Organizationsthatmakedecisionsbasedondiscriminationmaybesubjecttobidprotestsordisputes fromthoseproponentsfeelingthattheprocessmayhavebeenunfairorbiased. a. BPSorganizationsshallnotdiscriminate: Betweenthegoodsorservicesofaparticularprovinceorregion,includingthosegoodsand servicesincludedinconstructioncontracts,andthoseofanyotherprovinceorregion;or Betweenthesuppliersofsuchgoodsorservicesofaparticularprovinceorregionandthoseof anyotherprovinceorregion. b. Exceptasotherwiseprovided,measuresthatareinconsistentwithsection(a)includethefollowing: Theimpositionofconditionsontheinvitationtocompete,registrationrequirementsor qualificationproceduresthatarebasedonthelocationofasupplier'splaceofbusinessin Canada,theplaceinCanadawherethegoodsareproducedortheservicesareprovided,orother likecriteria; Thebiasingoftechnicalspecificationsinfavourof,oragainst,particulargoodsorservices, includingthosegoodsorservicesincludedinconstructioncontracts,orinfavourof,oragainst, thesuppliersofsuchgoodsorservicesforthepurposeofavoidingtheobligationsofthis document; Thetimingofeventsinthecompetitiveprocesssoastopreventsuppliersfromsubmittingbids; Thespecificationofquantitiesanddeliveryschedulesofascaleandfrequencythatmay reasonablybejudgedasdeliberatelydesignedtopreventsuppliersfrommeetingthe requirementsoftheprocurement; Thedivisionofrequiredquantitiesorthediversionofbudgetaryfundstosubsidiaryagenciesin amannerdesignedtoavoidtheseobligations;and Theuseofpricediscountsorpreferentialmarginstofavourparticularsuppliers. c. NoBPSorganizationshallimposeorconsider,intheevaluationofbidsortheawardofcontracts, localcontentorothereconomicbenefitscriteriathataredesignedtofavour: Thegoodsandservicesofaparticularprovinceorregion,includingthosegoodsandservices includedinconstructioncontracts;or Thesuppliersofaparticularprovinceorregionofsuchgoodsorservices. d. Exceptasotherwiserequiredtocomplywithinternationalobligations,aBPSorganizationmay accordapreferenceforCanadianvalueadded,subjecttothefollowingconditions: ThepreferenceforCanadianvalueaddedmustbenogreaterthan10percent; Theorganizationshallspecifyinthecallforcompetitionthelevelofpreferencetobeusedinthe evaluationofthebid;and Allqualifiedsuppliersmustbeinformedthroughthecallforcompetitionoftheexistenceofthe preferenceandtherulesapplicabletodeterminetheCanadianvalueadded.

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e.

Exceptasotherwiserequiredtocomplywithinternationalobligations,aBPSorganizationmaylimit itscompetitiontoCanadiangoods,CanadianservicesorCanadiansuppliers,subjecttothefollowing conditions: Theprocuringorganizationmustbesatisfiedthatthereissufficientcompetitionamong Canadiansuppliers; Allqualifiedsuppliersmustbeinformedthroughthecallforcompetitionoftheexistenceofthe preferenceandtherulesapplicabletodetermineCanadiancontent;and TherequirementforCanadiancontentmustbenogreaterthannecessarytoqualifytheprocured goodorserviceasaCanadiangoodorservice.

5.3.8.4

Contract Award

Oncethecompetitiveprocesshasbeencompletedandthepreferredsupplierhasbeenselected, theorganizationmustnowgothroughtheprocessofawardingthecontracttothepreferredsupplier. Theorganizationshouldsendaformalcontractawardlettertothechosensuppliertoinitiatetheprocess. AcontractawardlettersampleislocatedinSection5.4.6.3:SampleContractAwardLetter.

5.3.8.4.1

Executing the Contract

Followingtheprocurementprocessandtheselectionofacontracttype,asignedwrittencontractmust beestablished.
Mandatory Requirement #16 The agreement between the purchasing BPS organization and the successful supplier must be defined formally in a signed written contract before the provision of the goods, services or construction commences. When executing the contract, the organization must obtain the supplier signatures before obtaining the designated organizations signature. In situations where an immediate need exists for goods or services and the purchasing organization and the supplier are unable to finalize a contract, a letter of intent, memorandum of understanding (MOU) or interim purchase order may be used. This will allow for the immediate needs to be met, while final negotiations take place towards finalizing the contract.

Therearemanytypesofcontractsthatorganizationscanusewhenpurchasinggoodsandservices. Themostcommonlyusedcontracttypesarelistedbelow.Regardlessofthetypeofcontractused,itis importantfortheorganizationtounderstandtheimportanceofcontractacceptance.Contractacceptance identifiesthecriteriathatneedtobemetinorderforallpartiesinvolvedtobesatisfiedthatthecontract hasbeensuccessfullycompletedasindicatedbelow: a. Fixedprice:Afixedpricecontractisacontractthathasasetfeeforaspecificscopeofworktobe completed,whichcanincludethecompletionofaspecificdeliverableordeliverables.Whendeciding touseafixedpricecontract,theorganizationmustconsiderthelevelofscopedetailthathasbeen developed.Themorewelldefinedthescopeandtherequirements,thelowertheriskofusinga fixedpricecontractforthebuyingorganization.Usingafixedpricecontractwithascopethatis notwelldefinedcontainsriskfortheorganizationbecauseitemsmaybedeemedoutofscope andthusresultsincostlychangeorders.Ifusingafixedpricecontractforaspecificdeliverableor deliverables,theorganizationmustunderstandthedesiredoutcomeoftheworkbeingcompleted. Oneadvantageofafixedpricecontractisthatthecostoftheprocurementisknownupfront.

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b.

Timeandmaterials:Atimeandmaterialscontractidentifiesworktobepaidbasedonunitsoftime spentontheprocurement.Thesetimeunitsaretypicallyintheformofdailyorhourlyratesforthe amountoftimeandmaterialsusedbytheresourcesassignedbythesupplier.Iforganizations donothaveawelldefinedscopeofwork,atimeandmaterialscontractmaybetheonlyoption. Organizationsmustmonitorthehoursspentduringatimeandmaterialscontracttoensurethatthe procurementdoesnotexceedtheirbudget. Costreimbursable:Acostreimbursablecontractisacontractwherethebuyingorganization agreestoreimburseallthecostsincurredbyasupplierinthecompletionoftheworkidentified. Typically,thebuyingorganizationwillpayanadditionalfeeontopofthosecoststorepresentthe suppliersprofit.Thisadditionalfeecanbecalculatedasapercentageofthecostsincurredorasa flatfeeontopofthecostsincurred.

c.

Acombinationofthecontracttypesabovecanalsobeused,dependingontherequirementsbeing contemplated.
Mandatory Requirement #17 The contract must be finalized using the form of agreement/contract that was released with the procurement document.

Mandatory Requirement #18 All contracts must include appropriate cancellation or termination clauses and BPS organizations should seek appropriate legal advice on the development of these clauses.

ParticularlyforgoodsandservicesprocuredaspartofanITproject,organizationsmustconsider, asappropriate,theuseofcontractclausesthatpermitcancellationorterminationatcriticalproject lifecyclestages.

Mandatory Requirement #19 The term of the agreement and any options to extend the agreement must be set out in the procurement document. Changes to the term of the agreement may change the procurement value. Prior written approval by the appropriate approval authority is necessary before changing contract start and end dates. Extensions to the term of agreement beyond what is set out in the procurement document are considered non-competitive procurements and BPS organizations must seek appropriate approval authority prior to proceeding.

5.3.8.4.2

Award Notification

Oncethepreferredsupplierhasbeenselectedandthecontracthasbeenawardedandsigned, BPSorganizationsmustnotifyallproponentsthatacontracthasbeensignedandthecompetitive processiscomplete.

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Mandatory Requirement #20 For purchases valued at $100,000 or greater, BPS organizations must post, in the same manner as the procurement documents were posted, the name(s) of the successful supplier(s). Contract award notification must occur only after the agreement between the successful supplier and the organization has been executed. The contract award notification must include the agreement start and end dates, including any options for extension.

AnawardnotificationlettersampleislocatedinSection5.4.6.4:SampleAwardNotificationLetter. Anorganizationmayalsochoosetowriteletterstotheunsuccessfulproponents,communicatingthata decisionhasbeenmadeandthankingthemforparticipatinginthecompetitiveprocess.

5.3.8.4.3

Vendor Debriefing
Mandatory Requirement #21

For purchases valued at $100,000 or greater, BPS organizations must inform all suppliers who participated in the procurement process of their entitlement to a debriefing.

Thedetailsofthevendordebriefshouldbeincludedinthecompetitivedocuments,includingtheprocess forbookingdebriefsessionsattheconclusionoftheprocurementprocess.BPSorganizationsmustallow suppliers60calendardaysfollowingthedateofthecontractawardnotificationtorespond. Inschedulingvendordebriefings,BPSorganizationsmust: a. b. c. Confirmthedateandtimeofthedebriefingsessioninwriting; Conductseparatedebriefingswitheachvendor; Ensurethatthesameparticipant(s)fromtheBPSorganizationparticipateineverydebriefing conducted.IftheorganizationhasusedaFairnessCommissionerintheprocurementprocess,the FairnessCommissionermaybeinvitedtoparticipateinthedebriefingbutmustnotconductthe debriefings;and Retainallcorrespondenceanddocumentationrelevanttothedebriefingsessionaspartofthe procurementdocumentation.

d.

Inconductingvendordebriefingmeetings,BPSorganizationsmust: a. b. Provideageneraloverviewoftheevaluationprocesssetoutintheprocurementdocument; Discussthestrengthsandweaknessesofthesupplierssubmissioninrelationtothespecific evaluationcriteriaandthesuppliersevaluatedscore.Ifmorethanpriceisevaluated,the organizationmayprovidethesuppliersevaluationscoresandtheirevaluationranking (e.g.,thirdoffive); Providesuggestionsonhowthesuppliermayimprovefuturesubmissions; Beopentofeedbackfromthesupplieroncurrentprocurementprocessesandpractices;and Addressspecificquestionsandissuesraisedbythesupplierinrelationtotheirsubmission.

c. d. e.

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Inaddition,organizationsmayalsoprovidethename(s)andaddress(es)ofallsupplierswhoparticipated intheprocurement,includingqualifiedanddisqualifiedproponentsaswellasthosewhosubmitted nobid. Inconductingvendordebriefings,BPSorganizationsmustnotdiscloseinformationconcerning othersuppliers,otherthanasspecifiedabove,asitmaycontainconfidentialthirdpartyorganization proprietaryinformationsubjecttothemandatorythirdpartyexemptionundertheFIPPA.Ifasupplier makessucharequest,theymustbeadvisedthataformalFOIrequestcanbesubmittedtothe organizationsFreedomofInformationandPrivacyrepresentative. Questionsunrelatedtotheprocurementprocessmustnotberespondedtoduringthedebriefingand mustbenotedasoutofscopebasedonthedebriefingprocessagreedtointheprocurementdocuments. AvendordebriefsampleislocatedinSection5.4.6.5:SampleVendorDebriefingTemplate.

5.3.9

NON-COMPETITIVE PROCUREMENT

Forprocurementsthatdonotwarrantcompetitioninaccordancewiththeconditionsidentifiedin Section5.3.7ofthisdocument,variousoptionsareavailable.Organizationsshouldconsideremployingan opencompetitiveprocessoraninvitationalcompetitiveprocesstoincreasetheirchancesofachievingthe greatestvalueformoney. AnotheroptionavailabletotheBPSistheuseofaVORorpreferredsupplierslist,asdescribedinSection 5.3.8.2.1.TheuseofaVORorpreferredsupplierslistisacosteffectiveprocurementmethodwhentheopen competitiveprocessisnotrequiredorwhenspecificsuppliersaretobeinvitedtoacompetitiveprocess. OrganizationsshouldtakeadvantageofVORsorpreferredsupplierslistsasthesuppliersonthelisttend toofferthebestpricesforthosegoodsandservicestheyprovide.

5.3.9.1

Exemptions from the Competitive Process

Incertainuniquecircumstances,organizationswillnothavetheabilitytogothroughacompetitive processfortheirprocurementactivity.Thissectioncoversnoncompetitivepurchasingwhenan organizationgoesdirectlytoonesuppliertomeettherequirementsoftheprocurement. Therearetwomaintypesofdirectawards. a. SingleSourcingistheuseofanoncompetitiveprocurementprocesstoacquiregoods,servicesor constructionfromaspecificsuppliereventhoughtheremaybemorethanonesuppliercapableof deliveringthesamegoods,servicesorconstruction. SoleSourcingmeanstheuseofanoncompetitiveprocurementprocesstoacquiregoodsorservices wherethereisonlyoneavailablesupplierforthesourceofthegoodsorservice.

b.

5.3.9.1.1
a.

Single Sourcing

Allowableexceptionsforcompetitiveprocurementsinclude: Whereanunforeseensituationofurgencyexistsandthegoods,servicesorconstructioncannotbe obtainedbymeansofopenprocurementprocedures.Whereanoncompetitiveprocurementis requiredduetoanurgentsituation,organizationsmayconducttheprocurementpriortoobtaining theappropriateapprovalsprovidedthattheurgencyhasbeenjustifiedinwriting;

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b.

Wheregoodsorconsultingservicesregardingmattersofconfidentialorprivilegednatureare tobepurchasedandthedisclosureofthosemattersthroughanopencompetitiveprocesscould reasonablybeexpectedtocompromiseconfidentiality,causeeconomicdisruptionorotherwise becontrarytothepublicinterest; Whereacontractisawardedunderacooperationagreementthatisfinanced,inwholeorinpart, byaninternationalorganizationonlytotheextentthattheagreementincludesdifferentrulesfor awardingcontracts; Whereconstructionmaterialsaretobepurchasedanditcanbedemonstratedthattransportation costsortechnicalconsiderationsimposegeographiclimitsontheavailablesupplybase,specifically inthecaseofsand,stone,gravel,asphaltcompoundandpremixedconcreteforuseinthe constructionorrepairofroads; Whereanopencompetitiveprocesscouldinterferewiththeorganizationsabilitytomaintain securityororderortoprotecthuman,animalorplantlifeorhealth; Wherethereisanabsenceofanybidsinresponsetoanopencompetitiveprocessthathasbeen conductedincompliancewiththisdocument;and Whereonlyonesupplierisabletomeettherequirementsofprocurementinthecircumstances (solesourcing).

c.

d.

e. f. g.

5.3.9.1.2

Sole Sourcing

InaccordancewiththeAIT,inthesituationwhereonlyonesupplierisabletomeettherequirements ofaprocurement,anorganizationmayuseprocurementproceduresthatdifferfromthosedescribed inSection5.3.8ofthisdocumentinthefollowingcircumstances: a. Toensurecompatibilitywithexistingproducts,torecognizeexclusiverights,suchasexclusive licences,copyrightandpatentrights,ortomaintainspecializedproductsthatmustbemaintained bythemanufactureroritsrepresentative; Wherethereisanabsenceofcompetitionfortechnicalreasonsandthegoodsorservicescan onlybesuppliedbyaparticularsupplierandnoalternativeorsubstituteexists; Fortheprocurementofgoodsorservices,thesupplyofwhichiscontrolledbyasupplierthatisa statutorymonopoly; Forthepurchaseofgoodsonacommoditymarket; Forworktobeperformedonoraboutaleasedbuildingorportionsthereofthatmaybeperformed onlybytheleaser; Forworktobeperformedonpropertybyacontractoraccordingtoprovisionsofawarrantyor guaranteeheldinrespectofthepropertyortheoriginalwork; Foracontracttobeawardedtothewinnerofadesigncontest; Fortheprocurementofaprototypeorafirstgoodorservicetobedevelopedinthecourseofand foraparticularcontractforresearch,experiment,studyororiginaldevelopment,butnotforany subsequentpurchases; Forthepurchaseofgoodsunderexceptionallyadvantageouscircumstancessuchasbankruptcy orreceivership,butnotforroutinepurchases; Fortheprocurementoforiginalworksofart;

b. c. d. e. f. g. h.

i. j.

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k. l.

Fortheprocurementofsubscriptionstonewspapers,magazinesorotherperiodicals;and Fortheprocurementofrealproperty.

5.3.9.2

Non-Competitive Procurement Documentation

Mandatory Requirement #22

When a BPS organization bypasses the competitive process for any of the situations identified in Section 5.3.9.1, formal documentation must be completed to support and justify the decision. This documentation must be completed and approved by the appropriate authority levels within the organization and may be used as supporting documentation in the case of a competitive dispute.

Asamplenoncompetitiveprocessbypasstemplateisincludedwithinthesampleapprovalform providedinSection5.4.6.1:SampleProcurementApprovalAuthorityFormincludingNonCompetitive AwardBypass. Forasuspectedsolesourcingsituation,anorganizationcanpostapublicnoticethatitwillbeawarding aparticulargoodorservicetoacompanywithoutgoingthroughacompetitiveprocessandaskfor disputes.Ifnodisputesarise,theorganizationhasdonetheduediligencerequiredtoensurethatitisa solesourcingsituation.

5.3.10 ENVIRONMENTAL SOURCING

BPSorganizationsareencouragedtoconsiderenvironmentallyresponsibleandsustainableproductsand servicesaspartoftheirpurchasingdecisions.Theobjectivesofenvironmentalsourcingareto: a. b. c. d. Provideanenvironmentalrolemodelforpublicprocurementbymakingitaprioritytouse environmentallyresponsibleproductsandservices,wherefeasibleandcosteffective; Supportahealthierworkingenvironmentforemployeesandforcitizensingeneralthroughthepurchase ofenvironmentallypreferablegoodsandservices; Increasedemandforenvironmentallyresponsibleproductsandservices,whichmayultimatelyenhance theirqualityandcostcompetitiveness;and Increasetheconservationofresourcesthroughtheuseofmorereusableproducts,and/orproductsand servicesthatrequirelessenergyandmaterialstoproduceoruse.

TheprocurementneedsofpublicorganizationsinOntariorepresentasignificantlevelofresponsibilityto demonstrateleadershipandsupportforgreenerbusinesspractices.Integratingenvironmentalperformance andimpactintosupplychaindecisionsisacommitmenttoimprovementoftheenvironmentandthequality oflifeofCanadians. Greenprocurementmustbeviewedinthecontextofachievingvalueformoneyforthetotallifecyclecosts. Itrequirestheinclusionofenvironmentalimpactconsiderationsintotheprocurementprocess,including planning,acquisition,useanddisposal.Valueformoneymustincludetheconsiderationofmany environmentaltangibleandintangiblefactorswhendeterminingthetotallifecyclecostsand environmentalimpact.

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Thisrequiresanunderstandingoftheenvironmentalaspectsandpotentialimpactsassociatedwiththelife cycleassessmentofgoodsandservicesbeingacquired.Thelifecycleapproachmustexaminecostsbeyond theupfrontacquisitioncostofgoodsorservices,suchascostsassociatedwithoperating,maintainingand disposingofthegoods.Environmentalconsiderationsinclude,amongotherthings:thereductionof greenhousegasemissionsandaircontaminants;improvedenergyandwaterefficiency;reducedwasteand supportofreuseandrecycling;theuseofrenewableresources;reducedhazardouswaste;andreducedtoxic andhazardoussubstances. Assessmentoflifecyclecostswillcommonlyrequireinputfromabroadrangeofsourcesincludingprogram managers,projectauthorities,procurementauthorities,operationalusers,environmentalanddisposal experts,costaccountantsandfinancialmanagementadvisor,andstandardsorganizations.Dialoguewith thesuppliercommunitycanalsobeusefultofindoutwhatisavailableandtoinformthemarketoffuture requirements.Careshouldbetakennottodistortcompetitionthisprocessshouldnotgiveanyadvantage toparticularsuppliers. Activitiestosupportgreenprocurementshouldbeincorporatedduringeachstageoftheprocurement process.Thefollowingtableoutlinesopportunitiestointegratesuchconsiderations: RecommendedFramework:GreenProcurementConsiderations
Procurement Step Step 1 Assess Opportunity Traditional Focus Areas Spend analysis focuses primarily on materials and logistics costs Green Focus Areas Spend analysis encompasses direct and indirect environmental costs (e.g., energy consumption, disposal, packaging waste, water) Specification review and design considers industrys environmentally sound products and services Supply base includes suppliers who specialize in more efficient and sustainable products (e.g., possible commodity substitutions and new manufacturing processes) Sustainability considerations and criteria are specified in the RFP document (e.g., energy, disposal, water usage costs may be solicited from suppliers for analysis) Bid analysis quantifies cost/benefits of sustainability attributes (e.g., energy consumption, carbon footprint or waste) Sustainability attributes closely tracked and audited

Step 2 Assess Internal Supply Chain Step 3 Assess Supply Market

Specification focused, map current process and identify process opportunities Identify potential sources of supply and perform supplier assessments/comparisons

Step 4 Develop Sourcing Strategy Step 5 Implement Strategy

Confirm scope, determine desired outcomes and brainstorm process enhancement Develop/implement supplier solicitation strategy, conduct supplier negotiation and award contract Transition to new process, develop supplier relationships, implement operation changes and monitor/report performance

Step 6 Institutionalize Strategy

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Procurementmeasuressuchaspurchasingenvironmentallyresponsibleproductsandsuppliesaswellas adoptingpollutionpreventioncriteriawhenpurchasinggoods,servicesandconstructionareexamplesof initiativestoadvancesoundenvironmentalmanagementfororganizationaloperations.Otherexamplesof greenprocurementwouldincludeidentifyingorsourcing: a. b. c. Moreenergyefficientproductsandservices; Materialsandproductswithhigherrecycledororganiccontent; Materialsandproductswithlowerhazardousmaterialcontent,emissionsofgreenhousegases, bioaccumulativepollutants,ozonedepletingsubstances,orvolatileorganiccompoundsand particularmatter; Materialsandproductswithlongerlifespans; Materialsandproductswithgreaterendoflifedisposalprovisions; Methodstoreducewaterconsumptionorcontamination(e.g.,cleaningproducts); Supplierswithenvironmentallysustainableproductionpractices; Commoditieswithenvironmentallysustainablealternatives;and Opportunitiestocollaboratewithsuppliersongreeninitiatives,suchasreducingpackagingofgoods, abilitytoreusepackaging,reducedpollutionduetotransportationrequirementsviaimprovedorder patterns,useofhybridfleetsorreusablecontainers.

d. e. f. g. h. i.

Organizationsmustbeinapositiontodemonstratevalueformoneyinawardingthecontract,i.e.,the contractshouldbeawardedtotheproponentofferingthebestcombinationofcosts,qualityandperformance tomeetthatrequirementoveritslifecycle.Therequirementforenvironmentallyfriendlyproductsshould alsobetestedforneed,affordabilityandcosteffectivenessinthecontextoftheorganizationsmandateand overallprogramobjectives. Acleardefinitionofthetechnicalrequirementsincludingtheenvironmentaloutcomestobeachieved,terms andconditions,includingenvironmentaltermssuchasuseofcertifiedrecyclers,mandatoryrequirements andbidevaluationcriteria,asapplicable,aswellasthecontractorselectionmethodology,willpermitthe awardofacontractthatsupportsvalueformoneypropositions. Organizationsandpurchasingprofessionalsareencouragedtofamiliarizethemselveswithenvironmental certificationlabelssuchasENERGYSTAR.Additionalinformationregardingpurchasingenergyefficient productssuchasofficeequipment,HVAC,lighting,andothercommercialequipmentisavailableat http://oee.nrcan.gc.ca/energystar.

5.3.11 PROCUREMENT DOCUMENTS AND RECORDS RETENTION

BPSorganizationsmustretaintheprocurementdocumentsaswellasanyotherpertinentinformationfor reportingandauditingpurposes.Thesedocumentsmayalsobeusedassupportintheeventofabidprotest orcompetitiveprocessdispute. Arecordoftheprocurementprocessdocumentationincludesthefollowing: a. b. Acopyoftheprocurementjustificationorthebusinesscase; Informationregardingallsupplierconsultations,includinganyrequestsforinformation,undertakenin thedevelopmentoftheprocurementbusinesscaseand/orprocurementdocuments;

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c. d. e. f. g. h. i. j. k. l.

Evidencethatallrequiredapprovalswereobtained; Copiesofallprocurementdocumentsusedtoqualifyandselectthesupplier; WheretheprocurementwasconductedthroughaVORarrangement,informationregardingthe secondstageselectionprocessusedtoselecttheparticularvendorofrecord; Wheretheprocurementwassingleorsolesourced,documentedjustification,applicableexemptionsand associatedapprovals; Copiesofalladvertisementsofprocurementdocuments; Copiesofallsuccessfulandunsuccessfulresponses,submissions,proposalsandbidsreceivedinresponse toprocurementdocuments,includingtheconflictofinterestdeclarationandotherattachedforms; Informationregardinganyissuesthataroseduringtheprocurementprocess; Informationregardingallevaluationsofsubmissions,proposalsandbidsreceivedinresponse toprocurementdocuments; Informationregardingallvendordebriefingsincludingwrittendocumentationoftheoffer ofvendordebriefing; Copiesofallawardletters,notices,andpostedannouncements;

m. CopiesoftheAgreement(s); n. o. InformationregardingallchangestothetermsandconditionsoftheAgreement,includinganychanges thatresultedinanincreaseintheAgreementprice; Informationregardingthemanagementofthesupplier,includinghowthesuppliersperformancewas monitoredandmanagedand,whereapplicable,mechanismsusedtotransferknowledgefromthe suppliertoorganizationstaff; Riskassessmentinformationandrecommendations,whereapplicable; Contractorsecurityscreeningdecisions,whereapplicable; Informationregardingallprotests,disputesorsuppliercomplaintsregardingtheprocurement includinganyAgreementdisputes; Evidenceofreceiptofdeliverables;and Anyotherdocumentationasidentifiedbytheorganization.
Mandatory Requirement #23 All procurement documents, as well as any other pertinent information for reporting and auditing purposes must be maintained for a period of seven years and be in recoverable form if requested.

p. q. r. s. t.

TheBPSorganizationsshouldhaveaprocessthatdefineshowconfidentialinformationistobestoredand thelocationofthestorage.

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5.3.12 CONFLICTS OF INTEREST

Mandatory Requirement #24 BPS organizations must consider any conflicts of interest during procurement activities applicable to all employees, advisors, external consultants or suppliers. The organization must require any individual involved in supply chain-related activities to declare all actual or potential conflicts of interest.

5.3.12.1 Suppliers
BPSorganizationsinvolvedinprocurementactivitieswithsuppliersmustimplementprovisionsthat: a. Defineconflictofinteresttoincludesituationsorcircumstancesthatcouldgiveasupplieranunfair advantageduringaprocurementprocessorcompromisetheabilityofasuppliertoperformits obligationsundertheagreement; Reservetherightoftheorganizationtosolelydeterminewhetheranysituationorcircumstance constitutesaconflictofinterest; Reservetherightoftheorganizationtodisqualifyprospectivesuppliersfromaprocurementprocess duetoaconflictofinterest; Requireprospectivesuppliersparticipatinginaprocurementprocesstodeclareanyactualor potentialconflictofinterest; Requiresupplierstoavoidanyconflictofinterestduringtheperformanceoftheircontractual obligationsfortheorganization; Requiresupplierstodiscloseanyactualorpotentialconflictofinterestarisingduringthe performanceofanagreement; Reservetherightoftheorganizationtoprescribethemannerinwhichasuppliershouldresolvea conflictofinterest; Allowtheorganizationtoterminateanagreementwhereasupplierfailstodiscloseanyactualor potentialconflictofinterestorfailstoresolveitsconflictofinterestasdirectedbytheorganization; and Allowtheorganizationtoterminateanagreementwhereaconflictofinterestcannotberesolved.

b. c. d. e. f. g. h.

i.

5.3.12.2 Consultants
Organizationsmustbeawareoftheconflictofinterestcreatedwhenaconsultingorganizationisinvolved inthedevelopmentofthecompetitivedocumentsandalsohastheabilitytofulfilltheprocurementneeds thatarebeingcontemplatedinthosecompetitivedocuments.Organizationsmustbeveryclearandinsist ondocumentedagreementsthatanyconsultantinvolvedindevelopingthecompetitivedocuments cannotbeinvolvedinthecreationoftheresponsetothosecompetitivedocuments.

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5.3.12.3

Employees and Advisors

Organizationsmustalsoconsiderthattheremaybeconflictsofinterestwheretheirownemployees oradvisorsmaybeinvolved.Incaseswhereemployees,seniormanagement,boardsortrusteesare expectedtodeclareaconflictofinterest,BPSorganizationsmustrequestthataconflictofinterest declarationbesigned.Asampleformisprovidedin5.4.6.7:SampleGeneralConflictofInterest DeclarationTemplate.Theemployeeoradvisorisultimatelyresponsibleandaccountableforusing goodjudgmentintheexerciseoftheorganizationsdutiesandmust: a. b. Discloseconflictsofinteresttohisorherdepartmentsupervisorordesignateinwriting;and Avoidsituationsthatmaypresentconflictsofinterestwhiledealingwithpersonsororganizations doingbusinessorseekingtodobusinesswiththeorganization.

Situationsthatmightresultinaconflictofinterestincludethefollowing: a. b. c. d. e. f. Engaginginoutsideemployment; Notdisclosinganexistingrelationshipthatmaybeperceivedasbeingarealorapparentinfluenceon theirobjectivityincarryingoutanofficialrole; Providingassistanceoradvicetoaparticularsupplierparticipatinginacompetitiveprocess; Havinganownership,investmentinterest,orcompensationarrangementwithanyentity participatinginacompetitiveprocess; Havingaccesstoconfidentialinformation;and Acceptingfavoursorgratuitiesfromthosedoingbusinesswiththeorganization.

Organizationsneedtoconsidersituationswheretheremaybeanemployeeoradvisorconflictofinterest andthosesituationsmustbedealtwithaccordingly.

5.3.12.4

Evaluation Team Members

Inadditiontothesituationsthatmightresultinaconflictofinterestforallemployeesandadvisors, organizationsmustbeawareofandidentifyanyadditionalconflictsofinterestthatmayariseasaresult ofevaluationteammembersparticipatingintheselectionofproductsorservices.AswritteninSection 5.3.8.3.4,evaluationteammembersmustsignaconflictofinterestandnondisclosureagreementbefore eachevaluation.

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5.3.13 BID PROTEST PROCEDURES

EachBPSorganizationmusthavebidprotestproceduresthatallowsupplierstosubmitprotestsconcerning anyaspectoftheprocurementprocess.Forthepurposesofthisdocument,theprocurementprocessbegins afteranorganizationhasdecidedonitsprocurementrequirement(s)andcontinuesthroughtotheawarding ofthecontract.
Mandatory Requirement #25 BPS organizations must communicate the bid protest procedures for suppliers in all competitive and procurement documents to ensure that any dispute is handled in a reasonable and timely fashion. BPS organizations must ensure that their process is compliant with the bid protest procedures as set out in the AIT and the Ontario-Quebec Procurement Agreement.

Organizationsmustalsohaveadisputeresolutionprocessbuiltintotheircontractswiththechosensupplier tomanagedisputesthroughoutthelifeofthecontract.Itisrecommendedthatforcontractswith internationalsuppliers,theprocessshouldstatethatarbitrationwillbeinCanada.

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5.4
5.4.1

SUPPORTING DOCUMENTS
INPUT DOCUMENTS

1. AGuidetoDevelopingProcurementByLawsMinistryofMunicipalAffairsandHousing (July2003) OntarioMinistryofMunicipalAffairsandHousing.(May2003).Aguidetodevelopingprocurement bylaws:meetingtherequirementsoftheMunicipalAct,2001.RetrievedApril8,2009,from https://ozone.scholarsportal.info/bitstream/1873/5494/1/10313545.pdf 2. AgreementonInternalTrade(AIT)(May2007) GovernmentofCanada.(February2009).AconsolidationoftheAgreementonInternalTrade (theoriginalAgreementasmodifiedbysubsequentprotocolsofamendment).RetrievedApril8,2009, fromhttp://www.aitaci.ca/index_en/ait.htm 3. BPSSupplyChainProcurementPolicyGuidelines(December2007) BPSSupplyChainSecretariat,OntarioMinistryofFinance.(June2008).OntarioBuysProcurement PolicyGuidelines.Toronto:BPSSupplyChainSecretariat.(Availableuponrequest.) 4. CityofLondonPurchasingandMaterialsManagementPolicy(September2003) CityofLondon.(November2003).PurchasingandMaterialsManagementPolicy.Retrieved April14,2009,fromhttp://www.london.ca/Tenders_and_RFPs/PDFs/Policy.pdf 5. CityofOttawaPurchasingByLaw(November2003) CityofOttawa.(November2003).PurchasingBYLAWNO.50of2000.RetrievedApril8,2009, fromhttp://www.ottawa.ca/residents/bylaw/a_z/purchasing_en.html 6. FederalGovernmentPurchasingPoliciesandProcedures GovernmentofCanada.(August2008).HowtheGovernmentofCanadaBuysGoodsandServices. RetrievedApril14,2009,fromhttp://www.contractscanada.gc.ca/en/howe.htm 7. HumberCollegePurchasingPoliciesandProcedures(2007) HumberCollegeInstituteofTechnologyandAdvancedLearning.(August2008).PurchasingPolicy. RetrievedApril8,2009,fromhttp://www.humber.ca/purchasing/policies/purchasing_policy_409.pdf 8. ManagementBoardofCabinetProcurementDirective(November2007) OntarioMinistryofGovernmentServices.(November2007).ManagementBoardofCabinet ProcurementDirective.RetrievedApril8,2009,fromhttp://intra.pmed.mbs.gov.on.ca/mbc/pdf/ ProcurementDirective_November2007.pdf(Availableuponrequest.) 9. ManagementBoardProcurementOperatingPolicy(November2007) OntarioManagementBoardofCabinet.(November2007).ProcurementOperatingPolicy. RetrievedApril14,2009,fromhttp://intra.pmed.mbs.gov.on.ca/mbc/pdf/ProcurementOperatingPolicy_ November2007.pdf(Availableuponrequest.) 10. MEDECCompetitivePositionPaper(Spring2007) MEDEC.(2007).TenderingforMedicalDevices.RetrievedApril8,2009,from http://www.medec.org/files/images/Tendering_pos_paper_Spr2007.pdf

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11. PlexxusPurchasingPoliciesandProcedures(March2008) Plexxus.(April2008).PurchasingProcedures. 12. TorontoDistrictSchoolBoardPurchasingPolicyandAdministrativeProcedures(January2007) TorontoDistrictSchoolBoard.(January2007).PurchasingPolicy.RetrievedApril14,2009,from http://www.tdsb.on.ca/ppf/uploads/files/live/93/180.pdf 13. TorontoMunicipalCodePurchasing(March2001) CityofToronto.(September2004).Purchasing.InCityofTorontoMunicipalCode(Chapter195), RetrievedApril14,2009,fromhttp://www.toronto.ca/legdocs/municode/1184_195.pdf 14. TrilliumLakelandsDistrictSchoolBoardAdministrativeProcedurefortheProcurementof GoodsandServices(June2007) TrilliumLakelandsDistrictSchoolBoard.(June2007).ProcurementofGoodsandServicesPolicy. RetrievedApril14,2009,fromhttp://www.tldsb.on.ca/pdfs/Policies/Business/BU__3015.pdf TrilliumLakelandsDistrictSchoolBoard.(June2007).ProcurementofGoodsandServicesProcedure. RetrievedApril14,2009,fromhttp://www.tldsb.on.ca/pdfs/Policies/Business/BU_3016_AP.pdf 15. YorkUniversityProcurementPolicy(2007) YorkUniversity.(June2007).ProcurementofGoodsandServices.RetrievedApril14,2009,from http://www.yorku.ca/univsec/policies/document.php?document=58 16. PublicWorksandGovernmentServiceCanada(PWGSC) PublicWorksandGovernmentServicesCanada.(January2009).Procurement101:TheLowDown onGovernmentPurchasing.RetrievedApril14,2009,fromhttp://www.tpsgcpwgsc.gc.ca/bulletin/ fadb/2009/200901/200901007eng.html PublicWorksandGovernmentServicesCanada.(January2009).BuyingandSelling.Retrieved April14,2009,fromhttp://www.tpsgcpwgsc.gc.ca/services/chtsbngeng.html

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5.4.2

LIST OF MANDATORY REQUIREMENTS

WithinthePPP,25policiesandproceduralruleshavebeenidentified.Theserequirementsmakeupthe mandatoryrequirementsandhavebeensummarizedbelow. SegregationofDutiesandApprovalAuthorityLevels 1. SegregationofDutiesBPSorganizationsmustsegregateatleastthreeofthefivefunctionalroles. Responsibilitiesforthesefunctionsshouldliewithdifferentdepartmentsorataminimumwithdifferent individuals.Incircumstanceswhereitisnotfeasibletosegregatethreeroles,asinthecasewithsmaller organizations,adequatecompensatingcontrolsapprovedbytheexternalauditorwillbeacceptable. (Section5.3.6.1) 2. ApprovalAuthorityBPSorganizationsmusthaveadocumenteddelegationofauthorityschedulethat outlinestheorganizationsauthoritylevelsforeachofthefivefunctionalrolesdescribedinthe segregationofduties(Section5.3.6.1)andseekthenecessaryapprovalforallprocurementspriorto conductingtheprocurement.(Section5.3.6.2)

Competitivevs.NonCompetitiveProcurement 3. Competitivevs.NonCompetitiveProcurementProcessDeterminationInaccordancewiththeAIT, theOntarioQuebecProcurementAgreementandthePPPsprincipleoftransparency,BPSorganizations mustconductopencompetitiveprocurementswheretheestimatedvalueofprocurementofgoods, servicesorconstruction4is$100,000orgreater.(Section5.3.7.1) CompetitiveProcurement 4. InformationGatheringAresponsetoanRFIorRFEImustnotprequalifyapotentialsupplierand mustnotinfluencetheirchancesofbeingthesuccessfulproponentonanysubsequentopportunity. (Section5.3.8.1.2) 5. PreQualificationBPSorganizationsmustensurethatthetermsandconditionsbuiltintotheRFSQ containspecificlanguagetodisclaimanyobligationonthepartoftheBPSorganizationtoactuallycallon anysupplierasaresultoftheprequalificationtosupplysuchmaterialsorservices.(Section5.3.8.1.3)

Purchasing 6. AdvertisingandPostingCompetitiveDocumentstoMarketInaccordancewiththeAIT,callsfor competitiveprocurementsshallbemadethroughanelectronictenderingsystemthatisequally accessibletoallCanadiansuppliers. Constructioncontractsbetween$100,000and$250,000arenotsubjecttotherequirementsoftheAIT. Callsforthosecompetitiveprocurementscanbemadethroughanelectronictenderingsystemand/or oneormoreofthefollowingmethods: a. b.

4

Publicationinoneormorepredetermineddailynewspapersthatareeasilyaccessibletoall Canadiansuppliers;or Theuseofsourcelists,suchasVORsorpreferredsupplierslists.(Section5.3.8.2.3)

ThethresholdforconstructionhasbeensettoalignwiththelowerofthetworequirementsassetbytheAITandthe OntarioQuebecProcurementAgreementrespectively.

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7.

TimelinesforPostingCompetitiveProcurementsPurchasingBPSorganizationsmustprovide suppliersaminimumresponsetimeof15calendardaysforprocurementsvaluedat$100,000or more.(Section5.3.8.2.5)

Evaluation 8. BidReceiptBPSorganizationsmustensurethattheclosingdateissetonanormalworkingday (MondaytoFriday,excludingprovincialandnationalholidays).Submissionsthataredelivered aftertheclosingtimemustnotbeconsidered.(Section5.3.8.3.1) 9. EvaluationCriteriaEvaluationcriteriashouldbedeveloped,reviewedandapprovedbefore thecompetitiveprocessbegins.Thesecriteriamustbeincludedinthecompetitivedocuments. Thecompetitivedocumentsmustalsoidentifythosecriteriathatareconsideredmandatoryandany technicalstandardsthatneedtobemet.Theevaluationcriteriacannotbechangedoralteredoncethe competitiveprocesshasbegun.(Section5.3.8.3.2)

10. EvaluationProcessBPSorganizationsmustfullydisclosetheevaluationmethodologyandprocessto beusedinassessingasupplierssubmission.(Section5.3.8.3.3) 11. EvaluationTeamEvaluationteammembersmustbeawareoftherestrictionsrelatedtoconfidential informationsharedthroughthecompetitiveprocessandrefrainfromengaginginactivitiesthatmay createorappeartocreateaconflictofinterest.BPSorganizationsmustrequireteammemberstosigna conflictofinterestdeclarationandnondisclosureagreement.(Section5.3.8.3.4) 12. EvaluationMatrixBPSorganizationsmustensurethateachmemberoftheevaluationteamhas completedanevaluationmatrixratingeachoftheproponents.Recordsofevaluationscoresmustbe auditable.Evaluatorsshouldbeawarethateverythingtheysayordocumentmustbefair,factual, fullydefensibleandmaybesubjecttopublicscrutiny.(Section5.3.8.3.5) 13. SelectionProcessBPSorganizationsmustselectonlythehighestrankedsubmission(s)thathave metallmandatoryrequirementssetoutintherelatedprocurementdocument.Inrespondingto procurementdocuments,suppliersmaysometimesproposealternativestrategiesorsolutionstothe organizationsbusinessneeds.Unlessexpresslyrequestedintheprocurementdocuments,organizations mustnotconsideralternativestrategiesorsolutionsproposedbyasupplier.(Section5.3.8.3.5) 14. TieScoreProcessThemethodtoresolveatiescoremustbeidentifiedintheevaluationcriteriaofthe RFP,includingweighting,ifapplicable.Tiebreakcriteriaarealsosubjecttotherulesof nondiscriminationdefinedinSection5.3.8.3.6.(Section5.3.8.3.5) 15. NonDiscriminationIncompliancewiththeAIT,BPSorganizationsmustrefrainfromany discriminationorpreferredtreatmentinawardingacontracttothepreferredsupplierfromthe competitiveprocess,unlessjustifiablebasedonthecircumstancesdescribedbelow.(Section5.3.8.3.6)

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ContractAward 16. ExecutingtheContractTheagreementbetweenthepurchasingBPSorganizationandthesuccessful suppliermustbedefinedformallyinasignedwrittencontractbeforetheprovisionofthegoods,services orconstructioncommences.Whenexecutingthecontract,theorganizationmustobtainthesupplier signaturesbeforeobtainingthedesignatedorganizationssignature.Insituationswhereanimmediate needexistsforgoodsorservicesandthepurchasingorganizationandthesupplierareunabletofinalize acontract,aletterofintent,memorandumofunderstanding(MOU)orinterimpurchaseordermaybe used.Thiswillallowfortheimmediateneedstobemet,whilefinalnegotiationstakeplacetowards finalizingthecontract.(Section5.3.8.4.1) 17. EstablishingtheContractThecontractmustbefinalizedusingtheformofagreement/contractthat wasreleasedwiththeprocurementdocument.(Section5.3.8.4.1) 18. TerminationandCancellationClausesAllcontractsmustincludeappropriatecancellationor terminationclausesandBPSorganizationsshouldseekappropriatelegaladviceonthedevelopmentof theseclauses.(Section5.3.8.4.1) 19. ContractExtensionsThetermoftheagreementandanyoptionstoextendtheagreementmustbeset outintheprocurementdocument.Changestothetermoftheagreementmaychangetheprocurement value.Priorwrittenapprovalbytheappropriateapprovalauthorityisnecessarybeforechanging contractstartandenddates.Extensionstothetermofagreementbeyondwhatissetoutinthe procurementdocumentareconsiderednoncompetitiveprocurementsandBPSorganizationsmustseek appropriateapprovalauthoritypriortoproceeding.(Section5.3.8.4.1) 20. AwardNotificationForpurchasesvaluedat$100,000orgreater,BPSorganizationsmustpost,inthe samemannerastheprocurementdocumentswereposted,thename(s)ofthesuccessfulsupplier(s). Contractawardnotificationmustoccuronlyaftertheagreementbetweenthesuccessfulsupplier andtheorganizationhasbeensigned.Thecontractawardnotificationmustincludetheagreementstart andenddates,includinganyoptionsforextensionandthetotalagreementvalue.(Section5.3.8.4.2) 21. VendorDebriefingNotificationForpurchasesvaluedat$100,000orgreater,BPSorganizationsmust informallsupplierswhoparticipatedintheprocurementprocessoftheirentitlementtoadebriefing. (Section5.3.8.4.3) NonCompetitiveProcurement 22. NonCompetitiveProcurementDocumentationWhenaBPSorganizationbypassesthecompetitive processforanyofthesituationsidentifiedinSection5.3.9.1,formaldocumentationmustbecompleted tosupportandjustifythedecision.Thisdocumentationmustbecompletedandapprovedbythe appropriateauthoritylevelswithintheorganizationandmaybeusedassupportingdocumentation inthecaseofacompetitivedispute.(Section5.3.9.2) ProcurementDocumentsandRecordsRetention 23. RecordsRetentionAllprocurementdocuments,aswellasanyotherpertinentinformationfor reportingandauditingpurposes,mustbemaintainedforaperiodofsevenyearsandbeinrecoverable formifrequested.(Section5.3.11)

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ConflictofInterest 24. ConflictofInterestBPSorganizationsmustconsideranyconflictsofinterestduringprocurement activitiesapplicabletoallemployees,externalconsultantsorsuppliers.Theorganizationmustrequire anyindividualinvolvedinsupplychainrelatedactivitiestodeclareallactualorpotentialconflictsof interest.(Section5.3.12) BidProtestProcedures 25. BidProtestProceduresBPSorganizationsmustcommunicatethebidprotestproceduresfor suppliersinallcompetitiveandprocurementdocumentstoensurethatanydisputeishandledina reasonableandtimelyfashion.BPSorganizationsmustensurethattheirprocessiscompliantwith thebidprotestproceduresassetoutintheAITandtheOntarioQuebecProcurementAgreement. (Section5.3.13)

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5.4.3

CANADIAN CONTRACT AND PROCUREMENT LAW

Contractlawiscomplex.Thisisabriefsummaryofcertainaspectsofcontractandprocurementlaw. Fiveelementsmustbepresentfortheretobeanenforceablecontract: a. b. c. d. e. ThereisanOFFERandanACCEPTANCE; BothpartieshavetheCAPACITYtocontract; CONSIDERATION(value)hasbeenagreedupon; ThereisINTENTbybothpartiestoenterintoalegallybindingcontract;and ThepurposeofthecontractisLEGAL.

EffectiveprocurementwithintheBPSisabalancebetweentheprinciplesoffair,openandtransparent procurement;businessconsiderations;andtheobligationsimposedbylaw.Acompletedprocurement cycleresultsinanagreementbetweenaBPSorganizationandasecondpartyfortheprovisionofmaterials, servicesorconstructioninexchangeforsomeformofconsideration.Commonlawwithrespecttocontracts appliestoboththefinalagreementandthecompetitiveprocessesthatleaduptothefinalagreement. Therehasbeenalongseriesoflegalcases,includingSupremeCourtofCanadacases,thathaveprovided guidanceonthebasiccontractualrelationships.TheserelationshipshavebeencalledtheContractA/ ContractBsituation. IntheBPS,aRequestforTender(RFT),RequestforQuotation(RFQ),andRequestforProposal(RFP)are alltypesofsolicitationdocumentsusedtoinvitesubmissionsfromwhichasuccessfulproponentisselected. Thesubmission/receiptofacomplianttender,quotationorproposalmaycreateabindingbidcontractor ContractAbetweenaBPSorganizationandtheproponent.Theonlyexceptionsarewhereasubmission ismateriallynoncompliantoriswithdrawnpriortoclosing. Thecompliantsubmissionisanacceptanceofthepurchasersoffer(solicitation)toenterintoaContractA (thebidcontract)anditisalsoanofferbytheproponenttoenterintoContractB(aperformancecontract tobeawardedtothewinner)basedonitssubmission. TheexistenceofaContractAmeansthattheproponentshaveacceptedthetermscontainedwithinthe competitiveprocurementdocumentsandtherulescannotbechangedwithoutadvisingallpotential proponents.Oncethecompetitiveprocurementprocesshasclosed,nothingcanbeadded,deletedorchanged byeitherparty(submissionsarenormallyirrevocableafterclosing),exceptasmayoccasionallybeprovided forinthetermsofthesolicitation.Ifachangeofanykindoccursafterthistime,itmaybeconsideredabreach oftheContractA(forexample,ifasubmissionfailstoaddressaparticularmandatoryevaluationcriterion andaBPSorganizationweretodisregardthatomissionandawardthecontracttothatproponent). TherehavebeennumerouscasesovertheyearsinvolvingbreachesofaContractAbyeitherpartyina competitiveprocurementprocess,withthejurisprudencebeingthatfailuretoproperlyrespectContractA mayplacesignificantmonetaryorotherriskonanorganization. Thislegalprocessisdesignedtoprotectallparties(thepurchaserandtheproponents).Oncethepurchasing organizationissuesthesolicitationwithitsparticularrulesonhowthecompetitiveprocurementprocess willbemanaged,itmustabidebytheserules,asmusttheproponents.Ifaruleneedstobechangedforsome reason,thiscanbedonepriortothecompetitiveprocurementprocessclosingdate,withanaddendumbeing issuedtoallpotentialproponents.

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TheContractBistheactualperformancecontract.Thisisthedocumentthatspecifiestheservicesthatwill beperformedormaterialstobeprovidedbythecontractor;thepaymentprocessandamount;otherspecific schedules,suchasriskmanagement(insurance)andsubcontracting;andthecontracttermsandconditions. LawofCompetitiveProcesses Thelawofcompetitivebidding,whichisalsoreferredtoasthelawoftender,appliestotenders(whichresult inbidsorquotes).IthasalsobeenextendedtoapplytotheRFPprocess.InCanada,thelawofcompetitive biddinghasarisenfromaseriesofprovincialandSupremeCourtofCanadadecisions,whichhavedefinedthe followingprinciples: a. b. c. Uponthecloseofthesolicitation,aContractAgenerallyarisesbetweenthepurchasingorganization andeachoftheproponentssubmittingacompliantbidorquote. ThetermsofaContractAaretobefoundinthesolicitationdocuments,includingtheinstructions, theform(e.g.,RFT,RFQorRFP)andcustomsoftrade. Ifapurchasingorganisationdeviatesfromthemandatoryrequirementsofthesolicitationdocuments, thentheownermaybeliableinbreachofcontract(i.e.,breachofContractA)totheproponents (includingtheunsuccessfulproponents). Apurchasingorganizationshouldacceptonlycompliantbids.Acompliantbidisonethatmeetsthe requirementsspecifiedintheRFTorRFQ,orthemandatoryrequirementsinanRFP.Ifasubmission doesnotstrictlymeetarequirement,legalservicesshouldbeconsultedtodeterminewhetherthe noncomplianceisamaterialnoncomplianceorwhetherthesubmissioncanbedeemed substantiallycompliant.

d.

InanRFTorRFQ,therequirementsareclearlydefined,withpricebeingtheonlyvariable,althoughtheprice canreflecttotalcostofownership,andworkscheduleanddeliverymayalsobeconsiderations.AnRFPis usedtoseekasolutiontoaproblem,wherepricewillnotbetheonlyconsideration,andmaynotbea considerationatall.AnRFPwillincludebothmandatory(e.g.,acceptanceoftermsandconditions)and desirablecriteria,andeachproposalthatmeetsallofthemandatorycriteriawillresultintheestablishment ofaContractA. Regardlessoftheformofcompetitiveprocurementdocument,unlesstheprocessisformallyandproperly amended,theBPSorganizationislegallyrequiredtocomplywiththeprocess,particularlytheevaluation process,asdefinedinthecompetitiveprocurementdocuments.Therefore,theBPSorganizationmustcomply withtheselectioncriteria,includinganyweighting,thataredescribedinthecompetitiveprocurement documents. RequestsforInformation(RFI)andRequestsforExpressionsofInterest(RFEI)aregenerallynotdesigned toresultintheestablishmentofaContractA,sincethereisusuallynointentionthattheseinformation gatheringprocesseswillleadtotheawardingofaContractB.RequestsforSupplierQualifications(RFSQ) canbeusedeithertogatherinformationortoestablishaprequalifiedsupplierlist,whichmaybeusedto directlyawardaperformancecontract.AnRFSQmaythereforeresultintheformationofaContractA insomesituations.

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5.4.4

GLOSSARY OF TERMS
Theobligationofanemployee,agentorotherpersontoanswerfororbe accountablefor,work,actionorfailuretoactfollowingdelegatedauthority. Aformalwrittendocumententeredintoattheendoftheprocurementprocess. Anationalagreementthatregulatestradebetweentheprovincesto ensureequalaccesstopublicsectorprocurementforallCanadiansuppliers. TheAgreementaimstoreducebarrierstothemovementofpersons,goods, servicesandinvestmentswithinCanada. Theagreementcanbelocatedat: http://www.ic.gc.ca/eic/site/aitaci.nsf/eng/home

Accountability

Agreement AgreementonInternal Trade(AIT)

ApprovalAuthority

TheauthoritydelegatedbytheBPSorganizationtoapersondesignatedto occupyapositiontoapproveonitsbehalfoneormoreprocurementfunctions withintheplantopaycycleuptospecifieddollarlimitssubjecttothe applicablelegislation,regulationsandproceduresineffectatsuchtime. Criteria,oftendollarlevels,thatdefinewhichapprovalsareneededforvarious businesstransactions.Limitsaresetonthesizeandnatureofthebusiness transactionsandareassignedtotheindividualorjobroleauthorizedtoexecute basedontheappropriatelevelofresponsibility.5 Thenotificationtoaproponentofacceptanceofaproposal,quotationortender thatbringsacontractintoexistence. Aproposal,quotationortendersubmittedinresponsetoasolicitationfroma contractingauthority.Abidcoverstheresponsetoanyofthethreeprincipal methodsofsolicitingbids,i.e.,RequestforTender,RequestforProposaland RequestforQuotation. Adisputeraisedagainstthemethodsemployedordecisionsmadebya contractingauthorityintheadministrationofaprocess,leadingtotheaward ofacontract. AmeetingchairedbythesolicitingBPSorganizationtodiscusswithpotential proponents,technical,operationalandperformancespecifications,and/orthe fullextentoffinancial,securityandothercontractualobligationsrelatedtoa bidsolicitation.

ApprovalLevel

Award

Bid

BidProtest

BiddersConference

Heydarian,D.(2008).SAPBusinessOne...ToGo11.DocumentCreation,Authorizations,andApprovals. RetrievedMarch23,2009,fromSAPCommunityNetwork,Website:https://www.sdn.sap.com/irj/scn/wiki?path=/ display/B1/SAP+Business+One...To+Go++11.+Document+Creation,+Authorizations,+and+Approvals

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CompetitiveProcurement

Asetofproceduresfordevelopingaprocurementcontractthroughabidding orproposalprocess.Theintentistosolicitfair,impartial,competitivebids.6 Asituationinwhichfinancialorotherpersonalconsiderationshavethe potentialtocompromiseorbiasprofessionaljudgmentandobjectivity. Anapparentconflictofinterestisoneinwhichareasonablepersonwould thinkthattheprofessionalsjudgmentislikelytobecompromised. Itisimportanttonotethataconflictofinterestexistswhetherornotdecisions areaffectedbyapersonalinterest;aconflictofinterestimpliesonlythe potentialforbias,notalikelihood. Forexample:Asituationinwhichsomeonewhomustmakeadecisionin anofficialorprofessionalcapacitymaystandtoprofitpersonallyfrom thedecision.7

ConflictofInterest

Construction

Construction,reconstruction,demolition,repairorrenovationofabuilding, structureorothercivilengineeringorarchitecturalworkandincludessite preparation,excavation,drilling,seismicinvestigation,thesupplyofproducts andmaterials,thesupplyofequipmentandmachineryiftheyareincludedin andincidentaltotheconstruction,andtheinstallationandrepairoffixturesofa building,structureorothercivilengineeringorarchitecturalwork,butdoesnot includeprofessionalconsultingservicesrelatedtotheconstructioncontract unlesstheyareincludedintheprocurement. Anobligation,suchasanacceptedoffer,betweencompetentpartiesupona legalconsideration,todoorabstainfromdoingsomeact.Itisessentialtothe creationofacontractthatthepartiesintendthattheiragreementshallhave legalconsequencesandbelegallyenforceable.Theessentialelementsofa contractareanofferandanacceptanceofthatoffer;thecapacityoftheparties tocontract;considerationtosupportthecontract;amutualidentityofconsent orconsensusadidem;legalityofpurpose;andsufficientcertaintyofterms. Theawardofaprocurementcontractwithoutorganizingacompetitiveprocess. Adirectawardisonlyappropriateundercertainspecialcircumstancesasset outinSection5.3.9.1.8

Contract

DirectAward

7 8

Davis,W.S&Yen,D.C(1998).TheInformationSystemConsultant'sHandbook:SystemsAnalysisandDesign (Chapter41).CRCPress.RetrievedMarch23,2009,fromHalonInstituteofTechnology, Website:http://www.hit.ac.il/staff/leonidM/informationsystems/ch41.html Fischbach,R.&Plaza,J.(2009).RCRConflictsofInterest.RetrievedMarch23,2009,fromColumbiaUniversity, Website:http://www.columbia.edu/ccnmtl/projects/rcr/rcr_conflicts/q_a/index.html EuropeanCommission(2008).Glossaryofterms.RetrievedonMarch23,2009,fromPracticalGuideandGeneral annexes,Website:http://ec.europa.eu/europeaid/work/procedures/implementation/practical_guide/documents /a1_glossary_en.doc.

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ElectronicTendering

Acomputerbasedsystemthatprovidessupplierswithaccesstoinformation relatedtoopencompetitiveprocurements. Abenchmark,standardoryardstickagainstwhichaccomplishment, conformance,performanceandsuitabilityofanindividual,alternative,activity, productorplanismeasuredtoselectthebestsupplierthroughacompetitive process.Criteriamaybequalitativeorquantitativeinnature.9 Atoolallowingtheevaluationteamtoratesupplierproposalsbasedon multiplepredefinedevaluationcriteria. Individualsdesignated/responsibletomakeawardrecommendation. Theevaluationteamwouldtypicallyincluderepresentativesfromthe purchasingorganizationandsubjectmatterexpert(s).Eachmember participatestoprovidebusiness,legal,technicalandfinancialinput.10 Theindividualselectedbytheevaluationteamtoberesponsiblefor coordinatingtheevaluationprocess. Thepricethatwouldbeagreedtoinanopenandunrestrictedmarketbetween knowledgeableandwillingpartiesdealingatarm'slengthwhoarefully informedandnotunderanycompulsiontotransact. Twelvemonthperiodcoveredbythegovernment'syearlybudget,definedby thedateinwhichitends. EachfiscalyearrunsfromApril1toMarch31ofthenextcalendaryear; i.e.,fiscalyear200809runsrepresentsthe12monthperiodfrom April1,2008toMarch31,2009.

EvaluationCriteria

EvaluationMatrix

EvaluationTeam

EvaluationTeamLead

FairMarketValue

FiscalYear

FreedomofInformation andProtectionofPrivacy Act(FIPPA)

TheFreedomofInformationandProtectionofPrivacyAct(FIPPA)isa Nationallegislationstipulatingarightofaccesstorecordsheldbypublic bodiesandregulateshowpublicbodiesmanagepersonalinformation. http://www.accessandprivacy.gov.on.ca/english/act/index.html

Goods

Inrelationtoprocurement,moveableproperty(includingthecostsofinstalling, operating,maintainingormanufacturingsuchmoveableproperty)including rawmaterials,products,equipmentandotherphysicalobjectsofeverykind anddescriptionwhetherinsolid,liquid,gaseousorelectronicform,unlessthey areprocuredaspartofageneralconstructioncontract.

BusinessDictionary(2009).EvaluationCriteria.RetrievedonMarch23,2009,from http://www.businessdictionary.com/definition/evaluationcriteria.html 10 VirginiasInformationTechnologiesAgency(2008).ProcurementManual(Chapter13).RetrievedMarch23,2009, fromTheITProcurementProjectTeam,Website:http://www.vita.virginia.gov/uploadedFiles/SCM/ Procurement_Manual/Chapter_13/SCM_Chapter13.pdf

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GreenProcurement

Thepurchaseofenvironmentallypreferablegoodsandservicesandthe integrationofenvironmentalperformanceconsiderationsintotheprocurement processincludingplanning,acquisition,useanddisposal. Environmentallypreferablegoodsandservicesarethosethathavealesseror reducedimpactontheenvironmentoverthelifecycleofthegoodorservice, whencomparedwithcompetinggoodsorservicesservingthesamepurpose. Environmentalperformanceconsiderationsinclude,amongotherthings:the reductionofgreenhousegasemissionsandaircontaminants;improvedenergy andwaterefficiency;reducedwasteandsupportofreuseandrecycling;theuse ofrenewableresources;reducedhazardouswaste;andreducedtoxicand hazardoussubstances.

GroupPurchasing Initiatives(GPI)

Abuyinggroupcreatedtoachieveefficienciesandeconomiesofscaleby combiningthepurchasingrequirementsandactivitiesofmultiple organizations11intoonejointprocurementprocess.GPIsincludecooperative arrangementsinwhichindividualmembersadministertheprocurement functionforspecificcontractsforthegroup,andmoreformalcorporate arrangementsinwhichtheorganizationadministersprocurementforgroup members.GPIsmayinvolveavarietyofentities,includingpublicsector,private sectorandnotforprofitorganizations.Also,GPIsmaydevelopcommon contractsavailabletoabroadergroup,whichallowmemberstoselectfrom multiplesuppliers. BPSorganizationsthat,afterApril1,2009,haveenteredintoafunding agreement(oragreements)formorethan$10million(cumulatively)peryear withtheMinistriesofHealthandLongTermCare,EducationandTraining, CollegesandUniversities. Fairnessintreatingsuppliersandawardingcontractswithoutprejudice, discriminationorpreferredtreatment,unlessjustifiablebythesituations outlinedinSection5.3.8.3.6. Apromiseoraproposalmadebyonepartytoanother,intendingthesameto createalegalrelationshipupontheacceptanceoftheofferbytheotherparty. Acquisitionbyanymeans,includingbypurchase,rental,leaseorconditional sale,ofgoods,servicesorconstruction.

InScopeRecipients

NonDiscrimination

Offer

Procurement

11

TheminimumnumberofentitiesrequiredtoqualifyasaGroupPurchasingInitiativewillbedefinedin200910.

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ProcurementCard (PCard)

Anorganizationalcreditcardprogramprimarilyusedforlowcost, noninventory,noncapitalitems,suchasofficesuppliesortravelexpenses. Thecardallowsprocurementorfieldemployeestoobtaingoodsandservices withoutgoingthroughtherequisitionandauthorizationprocedure.Pcards maybesetuptorestrictusetospecificpurchaseswithpredefinedsuppliers orstores,andoffercentralbillings. UnlikethePcard,whichisprimarilyapurchasingtool,acorporatecardis issuedtoanindividualunderacorporateprogram,withthepurposeofpaying forexpensesrelatedtotheirjob.Corporatecardswilloftenhaveindividual billingbutcentralaccountmanagement.12

ProcurementLead

Theindividualassignedforeachprocurementwhowillbeaccountablefor meetingtherequirementsofthisdocument. Adocumentprovidingaframeworkand25mandatoryrequirementstogovern howorganizationsconductsourcing,contractingandpurchasingactivities, includingapprovalsegregationandlimits,competitiveandnoncompetitive procurement,conflictofinterest,andpurchasingandcontractawarding. ThePPPprovidesacommonsetofrulesformanagingtheprocurementof goods,servicesandconstructionacrosstheBPS. Theestimatedtotalfinancialcommitmentresultingfromaprocurement,taking intoaccountoptionalextensions. Apurchaser'swrittenoffertoasupplierformallystatingalltermsand conditionsofaproposedtransaction. Adocumentusedtogatherinformationonsupplierinterestinanopportunity orinformationonsuppliercapabilities/qualifications.Thismechanismmay beusedwhenaBPSorganizationwishestogainabetterunderstandingofthe capacityofthesuppliercommunitytoprovidetheservicesorsolutionsneeded. AresponsetoaRFEImustnotprequalifyapotentialsupplierandmustnot influencetheirchancesofbeingthesuccessfulproponentonany subsequentopportunity.

ProcurementPolicies andProcedures(PPP)

ProcurementValue

PurchaseOrder(PO)

RequestforExpressions ofInterest(RFEI)

12

CAMagazine,(2004).Pcardmakespurchasingeasier.RetrievedonMarch24,2009,fromCAMagazine, Website:http://www.camagazine.com/2/2/7/0/0/index1.shtml

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RequestforInformation (RFI)

Adocumentissuedtopotentialsupplierstogathergeneralsupplier,service orproductinformation.Itisaprocurementprocedurewherebysuppliersare providedwithageneralorpreliminarydescriptionofaproblemorneedand arerequestedtoprovideinformationoradviceabouthowtobetterdefine theproblemorneed,oralternativesolutions.AresponsetoanRFImustnot prequalifyapotentialsupplierandmustnotinfluencetheirchancesofbeing thesuccessfulproponentonanysubsequentopportunity. Adocumentusedtorequestsupplierstosupplysolutionsforthedeliveryof complexproductsorservicesortoprovidealternativeoptionsorsolutions. Itisaprocessthatusespredefinedevaluationcriteriainwhichpriceisnot theonlyfactor. Adocumentusedtogatherinformationonsuppliercapabilitiesand qualifications,withtheintentionofcreatingalistofprequalifiedsuppliers. Thismechanismmaybeusedeithertoidentifyqualifiedcandidatesinadvance ofexpectedfuturecompetitionsortonarrowthefieldforanimmediateneed. BPSorganizationsmustensurethatthetermsandconditionsbuiltintothe RFSQcontainspecificlanguagetodisclaimanyobligationonthepartoftheBPS organizationtoactuallycallonanysupplierasaresultofinformationgathering activitiestosupplysuchmaterialsorservices. Adocumentusedtorequestsupplierresponsestosupplygoodsorservices basedonstateddeliveryrequirements,performancespecifications,terms andconditions.AnRFTusuallyfocusestheevaluationcriteriapredominantly onpriceanddeliveryrequirements.Thisdocumentmayalsobecalleda RequestforQuotation(RFQ)wheretheorganizationhasdescribedexactly whatneedstobepurchasedandtheevaluationismadesolelyonprice. AformalrequesttoobtaingoodsorservicesmadewithinaBPSorganization, generallyfromtheendusertothepurchasingdepartment. Amethodofprocesscontroltomanageconflictofinterest,theappearanceof conflictofinterest,anderrorsorfraud.Itrestrictstheamountofpowerheldby anyoneindividual.Itputsabarrierinplacetopreventerrorsorfraudthatmay beperpetratedbyoneindividual.13

RequestforProposal (RFP)

RequestforSupplier Qualifications(RFSQ)

RequestforTender(RFT):

Requisition

SegregationofDuties

13

Gregg,J.,Nam,M.,Northcutt,S.&Pokladnik,M.(2008)SecurityLaboratory:SeparationofDutiesinInformation Technology.RetrievedMarch23,2009,fromTheSANSTechnologyInstitute,Website:http://www.sans.edu/ resources/securitylab/it_separation_duties.php

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Services

Intangibleproductsthatdonothaveaphysicalpresence.Notransferof possessionorownershiptakesplacewhenservicesaresold,andthey(1) cannotbestoredortransported,(2)areinstantlyperishable,and(3)come intoexistenceatthetimetheyareboughtandconsumed. Theuseofanoncompetitiveprocurementprocesstoacquiregoodsorservices fromaspecificsuppliereventhoughtheremaybemorethanonesupplier capableofdeliveringthesamegoodsorservices. Theuseofanoncompetitiveprocurementprocesstoacquiregoodsorservices wherethereisonlyoneavailablesupplierforthesourceofthegoodsorservice. Anypersonwho,basedonanassessmentofthatperson'sfinancial,technical andcommercialcapacity,iscapableoffulfillingtherequirementsofa procurement. Thefullrangeofprocessesthatmanagetheflowofgoodsandservices, information,anddollarsbetweensuppliers,customersandendusers, aswellasthesupportinginfrastructurerequiredtoenabletheseprocesses. Anyactivitywhetherdirectlyorindirectlyrelatedtoanorganizationsplan, sourceandprocure,moveandpayprocesses.Itincludeseverything,starting fromresearch,scopinganddefiningneedsbyendusersuntilthefinalpayment. Anestimateorcalculationthatconsidersalldirectandindirectcostsofanasset, goodorserviceoveritsusefullife,fromacquisitiontodisposal.Totalcostof ownershipincludesitemssuchasthepurchaseprice,implementationfees, upgrades,maintenancecontracts,supportcontracts,licencefeesand disposalcosts.14 AfoundationalobjectiveofthePPP.BPSinstitutionsmustbeopentoall stakeholders.BPSsuppliersmusthavefairaccesstoinformationon procurementopportunities,processesandresults. Apracticeofinformingasupplierastowhytheirbidwasnotselectedupon completionofthecontractawardprocess.Theprocessandelementsofa vendordebriefsessionaredetailedinSection5.3.8.4.3. AfoundationalobjectiveofthePPP.BPSinstitutionsmustmaximizethevalue theyreceivefromtheuseofpublicfunds.Avalueformoneyapproachaimsto deliverproductsandserviceswithalowertotallifecyclecostwhilemaintaining ahighstandard.

SingleSource

SoleSource

Supplier/Vendor

SupplyChainManagement

SupplyChainRelated Activities

TotalCostofOwnership/ TotalLifeCycleCosts (TCO)

Transparency

VendorDebriefing ValueforMoney/ BestValue

14

Vitasek,K.(2009).SupplyChainManagementTermsandGlossary.RetrievedMarch23,2009,fromCouncilofSupply ChainManagementProfessionals,Website:http://cscmp.org/digital/glossary/document.pdf

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VendorsofRecord(VOR) Arrangement

Aprocurementarrangementthatauthorizesorganizationstoselectfromoneor moreprequalifiedvendor(s),typicallybywayofaformalsecondstageprocess, foradefinedperiodontermsandconditions,includingpricing,assetoutinthe particularVORagreement.Vendorsofrecordarrangementsareusedtoreduce coststotheorganizationbyestablishingstrategicrelationshipswithasmall groupofsuppliers.

Unlessotherwisenoted,theabovedefinitionsweresourcedfromthefollowinginputdocuments (Section5.4.1): a. b. c. d. AgreementonInternalTrade(AIT)(May2007); ManagementBoardofCabinet(MBC)ProcurementDirective(November2007); ManagementBoardofCabinet(MBC)ProcurementOperatingPolicy(November2007);and PublicWorksandGovernmentServiceCanada(PWGSC).

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5.4.5

QUESTION & ANSWER

IMPLEMENTATIONCONSIDERATIONS WhendotherequirementsofthePPPtakeeffect? ThePPPwithits25mandatoryrequirements,takeseffectApril1,2009.Itmustbeimplementedbyall InScopeorganizationsbytheendofthe200910fiscalyear. DoallBPSorganizationneedtoreplacetheirexistingpolicieswiththePPPprovidedinthe SupplyChainGuideline? ThePPPprovidedintheSupplyChainGuidelineisnotintendedtoreplaceallexistingpolicies.Organizations mayadoptthisPPPorchoosetomaintaintheirexistingpolicies;however,theymustensuretheirpolicies meettheminimumandmandatoryrequirementsoutlinedinthisdocument.Themandatoryrequirementsare listedinSection5.4.2ListofMandatoryRequirements. WhoisresponsibleandaccountablefortheadherencetothePPP? Allparticipantsintheprocurementprocessanywherewithintheorganizationareresponsibleforadhering tothemandatoryrequirementsofthePPPasoutlinedinSection5.4.2ListofMandatoryRequirements. Thepurchasingdepartmentisaccountabletoensuretheircolleaguesareawareoftherequirementsand thatthecorrectproceduresarefollowed. HastheProvincesoughttoensurethatthePPPdoesnotcreateunnecessaryadministrativeburden forBPSorganizations? TheProvinceensuredthat,whereverpossible,therequirementswereharmonizedwiththoseofthe AgreementonInternalTrade(AIT)andtheOntarioQuebecProcurementAgreement.Inaddition, consultationsacrosstheprovinceshowedthatmostoftherequirementswerealreadycommonpractice throughouttheBPS. WhatifBPSorganizationsdiscoverproblemswiththePPPorunforeseensituationsthatthe PPPdoesnotaddress? TheSupplyChainGuidelineingeneralisalivingdocumentthatwillbeupdatedovertime.Anyissuesrelated tothePPPshouldbereportedtoOntarioBuys@Ontario.casotheProvincecanaddressthemasrequired. CONFLICTOFINTEREST Whatisconsideredapublicendorsement? ApublicendorsementisconsideredanysituationwhereaBPSorganizationrecommendsoractsasa referenceforasupplierinanypublicarenasuchasinpromotionalinformation,advertisementsor supplierwebsites. Isthepublicendorsementofasupplierconsideredaconflictofinterest? Cautionshouldbeexercisedinpubliclyendorsinganysupplier;however,particularcareshouldbe exercisedduringperiodswheretheendorsedsupplierisparticipatinginacompetitiveprocurementprocess. Itiscriticalthatnobenefitbeconveyedduringthecompetitiveprocurementprocessasaresultofany endorsement.BPSorganizationsshouldnotpubliclyendorseanyparticularsupplierinprocurement situationswhereitmayappearthattheBPSorganizationprovidedpreferentialtreatmenttoasinglesupplier.

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HowcanBPSorganizationprotectthemselvesfromunknownconflictofinterest? TheSupplyChainCodeofEthicsstatesthatsupplychainparticipantsmustnotengageinactivitiesthat wouldcreateorappeartocreateaconflictofinterest.Tosupportthisprinciple,BPSorganizationsmust haveemployeesandkeystakeholderssignconflictofinterestagreementswheretheirparticipationor rolerequiressuchimpartialdecisionmaking.Propereducationandcommunicationregardingconflicts ofinterestwillallowsupplychainparticipantstobetterrecognizesuchsituationsandidentifythemto theirorganization. Howdoesconflictofinterestapplytofundraising? Anymaterialdonationmadetoanorganizationundercircumstanceswhereitmightbeinferredthatsuch actionwasintendedtoinfluenceorpossiblywouldinfluencetheorganizationsprocurementprocessor evaluationteamshouldbeconsideredaconflictofinterestandthesuppliershouldbedisqualifiedfrom bidding.Duringthecompetitiveprocess,organizationsshouldbeparticularlycarefulnottocontactany potentialvendorsthatmayrespondtoanopencompetitionforfundraisingpurposes. Whenmustyouexcludeamemberoftheevaluationteam? Ifthereisanactualconflictofinterest,thoseidentifiedshouldnotbeinvolvedinthepreparationof competitivedocuments,beamemberofanevaluationpanelorbeinvolvedinnegotiatingandawarding acontract. Ifthereisaperceivedconflictofinterest,theProcurementLeadshouldseekandacquiretheevidence requiredtosupporttheteammembersimpartialinvolvementbeforeproceedingwithaprocurement processortheproposedcontract(dependingonwhentheperceivedconflictisnotifiedorarises). COMPETITIVEVS.NONCOMPETITIVEPROCUREMENT DoescompliancewiththePPPmeanallBPSorganizationsneedtofollowtheprocurementprocedures byprocurementvalueoutlinedinSection5.3.7;i.e.,useofaPcardforallpurchasesbelow$3,000? No.TheProcurementProcedureThresholdsbyProcurementValuetableinSection5.3.7.1isprovidedasan exampleframework.Withtheexceptionoftherequirementofanopencompetitiveprocessforpurchases over$100,000,BPSorganizationsshouldseektodevelopproceduralthresholdsfortheirlowervalue procurementneedsspecifictotheneedsoftheirownorganization,i.e.,organizationsmaychoosetosetthe limitforPcardstovaluesbelow$2,000. UnderwhatcircumstancesmayaBPSorganizationusesingleorsolesourcing? ThecriteriaforeithersoleorsinglesourcingprocurementsaredetailedinSection5.3.9.1:Exemptionsfrom theCompetitiveProcess.SinglesourcingoccurswhenBPSorganizationsuseanoncompetitiveprocurement processtoacquiregoodsorservicesfromaspecificsuppliereventhoughtheremaybemorethanone suppliercapableofdeliveringthesamegoodsorservices.Solesourcingoccurswhenthereisonlyone availablesupplierforthegoodsorservice.Whenanorganizationbelievesthereisonlyonesuppliercapable offulfillingarequirement,theorganizationcanpostanadvancednoticeforasolesourcetoconfirmtheir assumption.Forbothsingleandsolesourcing,itisimportanttodocumentthejustificationfor noncompetitiveprocurement.

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THRESHOLDSANDCOVERAGE WhatarethethresholdsforcompetitiveprocurementinthePPP? InalignmentwiththeOntarioQuebecAgreement,thethresholdforcompetitiveprocurementofgoods, servicesandconstructionsprocuredbyBPSorganizationsis$100,000. Dothethresholdsapplytotheannualvalueofacontractortoitstotalvalue?Ifanorganizationhas athreeyearcontractover$100,000,butineachofthethreeyearsitspendslessthan$100,000, dothecompetitiverequirementsofthePPPapply? Thecompetitiverequirementswouldapplyinthissituation.Thekeyisthetotalvalueofthecontractthatwill beadvertised,nottheamountsthatwillbepaideachyear.Ifitisadvertisedasonecontractthatwilllast threeyears,andtheestimatedvalueexceedsthethreshold,BPSorganizationsshouldfollowtherequirements forcompetitiveprocurementasspecifiedinSection5.3.8. Insomecases,itisdifficulttogetanaccurateestimateofaproject'stotalcost.HowshouldaBPS organizationdealwithaprocurementestimatedat$90,000thatmayendupexceedingthe $100,000threshold? Wheretheestimatedcostofaprojectorpurchaseisjustunderthethreshold,andthereisapossibilitythat thecontractmightexceedthethreshold,BPSorganizationsshouldconsiderfollowingtherequirementsfor competitiveprocurementasspecifiedinSection5.3.8.Therequirementsapplytoprocurementoverthe thresholds.However,belowthethresholds,BPSorganizationsareencouragedtoconsidercompetitive procurementtomaximizetheirchancesofsecuringthemostfavourablecontract. WhathappensifaBPSorganizationestimatesaprojectwellbelowthethreshold,butwhenthefull costscomein,theprojectexceedsthethreshold? Ifanorganizationcandemonstratethattheprojectestimatewasbelowthethreshold,theyhavemetthe requirementsofthePPP.However,ifbidsonaprojectcomeinsignificantlyoverwhattheorganizationhas estimated,theorganizationmaywanttoreviewtheestimateandtheprojectspecifications.Insomecases, itmightbeadvisabletoreissuetheRFP/RFT.Iftheorganizationchoosestodothis,itshouldcomplywith therequirementsforcompetitiveprocurementasspecifiedinSection5.3.8. Someorganizationswilladvertiseforaspecificgoodorservice,andthecontractmaybeawardedto severalsuppliers.Thetotalvaluemayexceedthethreshold,butthevaluesoftheindividualcontracts couldbeunderthethreshold.Wouldthisbecoveredbytherequirementsforcompetitive procurementasspecifiedinSection5.3.8? Iftheopportunityisadvertisedasasingleopportunityanditstotalvalueexceeds$100,000,therequirements forcompetitiveprocurementasspecifiedinSection5.3.8wouldapply. Dothethresholdsapplytothevalueofaprojectorpurchasebeforetaxes? Yes.Thethresholdsapplytothevaluebeforetaxes. Ifanorganizationhasaoneyearcontractwithavaluebelowthethresholds,butwiththepossibility oftwooneyearextensionsthatwouldtakethetotalvalueabovethethresholds,wouldthisbe covered? Ifacontractwillbestructuredtoallowforextensionsanditisclearthatthiswouldtakethetotalvalueofthe contractoverthethreshold,theorganizationmustfollowtherequirementsforcompetitiveprocurementas specifiedinSection5.3.8.Existingmultiyearcontractswouldnotbeaffected.

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Wouldanorganizationhavetofollowtherequirementsforcompetitiveprocurementasspecifiedin Section5.3.8forreachingastandingagreementwithasupplierwherenospecificvolumesoramounts areinvolved? Ifatallpossible,theorganizationshouldtrytoestimatethevalueofthestandingagreement.Iftheestimated valueexceedsthethreshold,theorganizationshouldfollowtherequirementsforcompetitiveprocurementas specifiedinSection5.3.8.Ifitisnotpossibletoestimatethevalue,theorganizationshouldemploya competitiveprocesstoobtainthebestvalue. Aresharedserviceorganizationsandbuyinggroupscovered? Yes.ThePPPisalsomandatoryforsharedserviceorganizationsownedorfundedbyInScoperecipients. Entitiesparticipatinginbuyinggroupsmustensurethatthebuyinggroupsactivitiesarecarriedoutin accordancewiththerequirementsofthisdocument. THECOMPETITIVEPROCESS WhatisthedifferencebetweenaRequestforProposal(RFP)andRequestforTender(RFT)? TherearetwomajordifferencesbetweenanRFPandRFT. 1. PurposeAnRFPisusedwhentheprocurementcallsforthesupplysolutionsforthedeliveryof complexproductsorservicesorwhereitisreasonabletoexpectsupplierstoprovidealternativeoptions orsolutions.AnRFTisusedincircumstanceswheretheprocurementrequirementsareknownandable tobearticulatedclearlyinthedocument. EvaluationCriteriaWhenrespondingtoanRFP,suppliersareexpectedtocompeteonthemeritof theirproposedsolution,productqualityorservicecapabilitiesinadditiontotheirproposedsolution price.AmorerobustsetofevaluationcriteriaistypicallyusedinevaluatingRFPresponses.Inthecase ofRFT,whereitisexpectedthereislittlevariationamongproposedsolutions,supplierscompetemainly onprice.

2.

Whataretherequirementsforpostinganopencompetitiveprocurement? Allopencompetitiveprocurementsmustbepublishedonanyelectronictenderingsystemeasilyaccessibleto allsuppliersinCanada.Theinformationpublishedmustgivepotentialsuppliersanoverviewofthepotential procurementandinstructionsforsubmittingaproposal.BPSorganizationsshallprovidesupplierswitha reasonableperiodoftimetosubmitaproposal,takingintoaccountthetimeneededtodisseminatethe information,andanytheprovisionsforcomplexityoftheprocurement.Ataminimum,suppliersmustbe given15calendardaystorespond. Transparencyandopennesscanbebestachievedthroughtheuseofonecommonelectronicsystem. TheOntarioPublicsectorcurrentlyhasacontractinplacewithMERX(www.merx.com)tosupportthis goalonaprovinciallevel.ThiscontractisavailabletotheBPSandshouldbeusedbyallBPSorganizations. AITrecommendsthattendernoticesforallopportunitiesbepostedonanationalelectronictendering system,theAlbertaPurchasingConnection(APC)toalertallsupplierstothecompetition.MERXwillhelp organizationstofulfillthisrequirementbyforwardingtendernoticestoAPCforBPSopportunities postedonMERX. WillBPSorganizationsonlybeallowedtouseelectronicadvertising? BPSorganizationsmustuseelectronicadvertisingtopostanycompetitivedocument,e.g.,RFP,RFIandRFSQ. Organizationsmaychoosetouseothermethodsofadvertisinginadditiontotherequiredelectronicmethod.

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Doesn'telectronicadvertisingdiscriminateagainstthosesuppliersthatdonothavetheright technology?Howwillsuppliershaveaccesstoinformationaboutadvertisedopportunities? Moreandmore,theworldismovingtowardselectroniccommerceandanincreasingnumberofsuppliers havethenecessarytechnicalcapabilitiesforthis.However,organizationsmaychoosetouseothermethods ofadvertisinginadditiontoelectronicadvertisingtoensurethatallappropriatesuppliersareawareof theopportunity. Howdoelectronictenderingsystemswork?Isthereacost? ElectronictenderingsystemsarewebportalsthatenablebothprivateandpublicsectorbuyersinCanada andtheUStoposttheirrequestsforgoods,servicesandconstructiontosuppliers.Whenapurchasing organizationsubmitsacompetitivedocument,thetenderingsystemmatchesittoadatabaseofsuppliersand notifiesthosesuppliersoftheopportunityviadirectemailorfax.Anycancellationsorchangesthepurchasing organizationmakestothepostedcompetitivedocumentcreatesadditionalnotificationstosuppliers. Registrationandpostingonelectronictenderingsystemsarefreeforpurchasingorganizationsbutsuppliers arerequiredtopayasubscriptionfee. ThePPPrequiresBPSorganizationstoadvertiseopportunitiesfor15daysarethosebusinessdays orcalendardays? Calendardays. Whatifaproponentsubmitsaquestiononacompetitiveprocurement?Howwouldadditional informationgetouttoallsuppliers? Ifanyamendmentsorclarificationsaremadetoadvertisedcompetitivedocuments,thechangesmustbe postedinthesamesystemastheoriginaldocuments.Alladdendatoapostedcompetitionmustbeposted sevendaysbeforeclosingforasuppliertorespond.Iftheaddendumisissuedwithinsevendaysofthe closingdate,thedateshouldbeextendedaccordingly. Aretherelimitsonhowlonganorganizationcanmaintainthesamesourcelists? IfaBPSorganizationchoosestousesourcelistsforprocurementsover$100,000,itmustadvertisethe opportunityforsupplierstobeputonthelistsannuallyandasupplierthatmeetstheconditionsfor registrationonthelistmustbeabletoregisteratanytime. Docompetitiveprocurementevaluationsteamsneedtoincludeamemberoftheorganizations procurementteam? Someonefromprocurementshouldbeinvolvedinfacilitatingtheprocurementandevaluationprocess, toensuretheBPSorganizationadherestoallappropriatepolicies.Ataminimum,theremustbesomeone designatedastheprocurementleadthatisaccountabletotherequirementsofthePPP. WhatshouldanorganizationdowhennoproponentmeetstherequirementsofaRFP? Oncetheproposalshavebeenevaluatedanddeemedunsatisfactory,theevaluationteamshouldnotify allproponentsthatallsubmissionshavebeenrejected.Ageneralvendordebriefshouldthenbeheld bytheorganizationtoexplainkeyreasonsforthedecision.Organizationsmaywishtoadviseproponents onwhethertheRFPwillberevisedand/orrereleasedatalaterdate.Ifabidprotestissubmittedbya proponentuponrejectionoftheirproposal,thentheorganizationmustwaituntilthebidprotest resolutionprocesshascometoaclosebeforeanewRFPisreleased.

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Toeffectivelyprotecttheorganizationfromliability,theorganizationshouldincludelanguageintheir competitivedocumentationstating(amongotherrights)thatitreservestherightto: canceltheprocessatanystage; canceltheprocessatanystageandissueanewRFPorRFTforthesameorsimilardeliverables;and rejectanyorallproposals. Note:Wherevertherightsoftheorganizationhavebeenexpressed,thereshouldalsobelanguagetoensure thattheorganizationshallnotbeheldliableforanyexpenses,costs,lossesoranydirectorindirectdamages incurredorsufferedbyanyproponentoranythirdpartyresultingfromtheorganizationexercisinganyofits expressorimpliedrights. Canorganizationsdemonstrateapreferenceforlocalsuppliers? No.InaccordancewiththeAIT,BPSorganizationsmaynotdevelopevaluationcriteriatofavoursuppliers fromaparticularprovinceorcity.Insomecases,deliveryorservicingwithinacertaintimeperiodis necessaryinorderforanorganizationtocontinuetoperformafunction.Requiringasuppliertodelivera goodorprovideservicewithinaspecifiedtimeperiodisareasonablerequirement. TheorganizationmayaccordapreferenceforCanadianvalueadded,providedthatthepreferenceisno greaterthan10percent.Alternatively,anorganizationmaylimititsprocurementtoCanadiangoodsor suppliers,providedtheprocuringorganizationissatisfiedthatthereissufficientcompetitionamong CanadiansuppliersandtherequirementforCanadiancontentisnogreaterthannecessarytoqualifythe procuredgoodasaCanadiangood. CONTRACTCONSIDERATION CanBPSorganizationsreceivegoodsorservicesorbeginconstructionpriortofinalizingacontract? Insituationswherethereexistsanimmediateneedforgoodsorservicesandthepurchasingorganization andthesupplierareunabletofinalizeacontract,aletterofintent,memorandumofunderstanding(MOU) orinterimpurchaseordermaybeused.Thiswillallowfortheimmediateneedstobemet,whilefinal negotiationstakeplacetowardsfinalizingthecontract. Isapurchaseorderconsideredacontract? Astandardpurchaseorderisadocumentauthorizingasuppliertodelivergoodsorserviceswithpaymentto bemadelater.Itconstitutesanofferthatisacceptedwhenthesupplierdeliversontheorder.Anofferedand acceptedpurchaseordercanbeconsideredalegalcontract;however,organizationsarestronglyencouraged tosignformalcontractagreementswithdefinedtermsforanyrepeatablepurchases. Whatrestrictionsexistforcontractlengths? Whiletherearenodefinedrequirements,BPSorganizationsareencouragedtolimittotalcontractdurations (includingextensions)tothreetofiveyears.Thislimitisdesignedtosupporttheregularreviewofexisting contractsinthecontextofchangingmarketandorganizationalcircumstances.Theintentoflimitingcontract durationandinitiatingareviewistohelporganizationsensurethatduediligenceispaidingettingthebest valueformoney.

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Underwhatcircumstancesmaycontractextensionsbegranted? Contractextensionsshouldbegrantedonlyincaseswhere: Thecontractoragreestothetermsoftheextensionandthepurchasingorganizationadministeringthe contractrecommends,basedonastudyofcurrentcompetitionandmarketconditions,thatacontract extensionwouldbeinthebestinterestsoftheorganization; Thereisasituationwhereurgencyexistsandthegoods,servicesorconstructioncannotbeprocured throughacompetitiveprocessintimetomeettheneedsoftheorganizationandwhereadelaywould causeeconomichardshiporsignificantservicedeliverydisruptionorotherwisebecontrarytothe interestsoftheorganization;or Anunforeseeabledelayinaprojectoranuncontrollableshiftintimetablesrequiresanorganizationto retaintheservicesormaintainacontractwithasuppliertomaintainthebestinterestsoftheorganization. Ineachcase,aformalcontractextensionrequestshouldbesubmittedtothepurchasingdepartment30days beforethecontractexpires.Requestsshouldbeaccompaniedbyanexplanationfortheextension(seeabove) aswellasconfirmationthatthecontractorhasperformedinaccordancewiththeprovisionsoftheoriginal contract. NOTE:Onlythosecontractswithextensionlanguageincludedasapartoftheoriginalcontractstermsand conditionsshouldbeconsideredforextension. Arethereanydollarvaluelimitationstocontractextensions? Whiletherearenodefinedlimits,itisrecommendedthatthecumulativedollarvalueforallextensionstoa contractnotexceed50percentoftheoriginalcontractvalue.Thelengthoftimeforwhichacontractmay beextendedshouldnotexceedtheoriginaltermofthecontract.Theoriginaltermofacontractplusthe combinedlengthoftimeofallpossibleextensionsshouldnotexceedfiveyears. Howarecontractextensionsaffectedwhentheoriginalprocurementvalueallowedforadirect award;however,thesumoftheoriginalcontractvalueandcontractextensionvaluewouldhave requiredacompetitiveprocurementprocess? Organizationsmayextendthecontractwithoutcompletinganewcompetitiveprocessprovidedthatthe extensionmeetstheextensioncriteria(seeabovequestiononextensioncircumstances)andprovidedthat theextensiondoesnotexceedtherecommendedcontractlengthorvaluelimits(seeabovequestionondollar limits).Iftheproposedextensiondoesnotmeetthecriteriaabove,thentheorganizationshouldinitiateanew competitiveprocess. ItisimportantforallBPSorganizationstoavoidtheappearanceofconflictofinterestthatcouldarisefrom makingaseriesofsinglesourceaddons,eachofwhichisbelowagivendollarthreshold,butresultsinana valuethatexceedsthecompetitiverequirementsofthePPP.

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5.4.6

SAMPLE TEMPLATES PENDING

Thesesampletemplatesareprovidedfororganizationsthatdonotalreadyhavestandarddocumentsforeach purposedefinedbelow.Useofthesetemplatesisnotmandatory;however,itisrequiredthateachInScope recipienthaveequivalentdocumentsinplace. 1. 2. 3. 4. 5. 6. 7. SampleProcurementApprovalAuthorityFormincludingNonCompetitiveAwardBypass SampleEvaluatorHandbookincludingEvaluationMatrix SampleContractAwardLetter SampleAwardNotificationLetter SampleVendorDebriefingTemplate SampleEvaluationTeamConflictofInterestDeclarationandNonDisclosureAgreementTemplate SampleGeneralConflictofInterestDeclarationTemplate

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 Queens Printer for Ontario, 2009 ISBN 978-1-4249-9871-5 (PDF) ISBN 978-1-4249-9870-8 (HTML)