Newfoundland government overhauls purchasing rules

Long-planned changes to finally be introduced

James McLeod jmcleod@thetelegram.com
Published on November 22, 2016
Service NL Minister Eddie Joyce (left) and Sean Dutton, deputy minister responsible for public procurement reform, speak to reporters about plans to overhaul government purchasing.
James McLeod/The Telegram

The provincial government is massively overhauling the way it buys goods and services by replacing the Public Tender Act.

Service NL Minister Eddie Joyce stressed the fact the Public Tender Act is decades old, and does not allow for best value when it comes to government purchasing.

The new law will include consultants in the public tendering process for the first time, limit the ability of Nalcor Energy to ignore normal public tendering and post much more information about all public procurement contracts on a new government website.

The best estimate is that the government purchases about $4 billion worth of goods and services per year.

Joyce said he expects the number will go down a bit in the future, as the new law creates some savings.

The new Public Procurement Act also sets up a concept of “best value” instead of just the lowest bidder. Public tenders will still be awarded to the lowest bidder, but the new legislative framework will make it a lot easier for public bodies to go through a request for proposals. That gives public bodies more flexibility to consider factors other than just the price when awarding a contract.

To avoid potential corruption, the government is transforming the Government Purchasing Agency to a more arm’s-length agency, renamed the Public Procurement Agency.

A new chief procurement officer will be selected by the Liberal government’s Independent Appointments Commission. The position will be a six-year term, which will, it is hoped, make it a non-political and independent role.

Debate on the bill started in the House of Assembly Tuesday afternoon, but Joyce said it will likely be sometime in the second half of 2017 before it’s proclaimed into law and fully enacted.

There’s a lot of work to do, setting up the new website and training government agencies and municipalities on the new procurement rules.

The initial reaction from Vigilant Management CEO Terry Hussey was positive. He said the new law would be “like a bomb” in certain parts of the construction, engineering and architecture industries.

“Legislation like this doesn’t impact good suppliers, because they tend to do a good job,” Hussey said. “But the ones who would skate in a bid under the line — you know, the classic bid low and change-order your way to a profit — that’s going to be much harder to do under this.”

Hussey said that even though he’s a consultant, he thinks the idea of consulting services being brought into the public procurement legislative system is a good thing.

“I want to compete for the work,” he said. “I’m happy to compete for the work, and in many places I wasn’t able to compete for the work because I wouldn’t have the right friends or the right access.”

The issue of public procurement legislation has been a bit of a political football over the years. Then-premier Danny Williams promised to enact it in 2008, but never got around to doing it. Then-premier Kathy Dunderdale made the same promise during the 2011 election, and the Progressive Conservative government even went so far as to give notice to the House of Assembly in 2012, but backed away from it at the last minute.

Opposition Leader Paul Davis was the minister responsible for the legislation in 2012, and he said Tuesday the government spent plenty of time studying the issue, but because they couldn’t get it absolutely perfect to his satisfaction, they didn’t take action.

“It’s a complex piece of work that impacts so many businesses  — thousands and thousands of businesses in our province,” Davis said.

“I had levels of discomfort that stopped us from finalizing it in the past.”

Davis said he still has levels of discomfort with the bill the Liberals are putting forward. Mainly, he doesn’t like the fact that the law leaves a lot of the nitty gritty to the provincial cabinet to hammer out in regulations, which can be changed more easily and more quietly without debate in the legislature.

jmcleod@thetelegram.com

Twitter: TelegramJames

Earlier story:

NL government announces new purchasing law

The provincial government is massively overhauling the way it buys goods and services, by replacing the Public Tender Act.

Service NL Minister Eddie Joyce stressed the fact that the current Public Tendering Act is decades old, and is not allowing for best value when it comes to government purchasing.

The new law will include consultants in the public tendering process for the first time, limit the ability of Nalcor Energy to ignore normal public tendering, and post much more information about all public procurement contracts on a new government website.

The best estimate is that the government purchases around $4 billion worth of goods and services per year. Joyce said he expects that the number will go down a bit in the future, as the new law creates some savings.

The new Public Procurement Act also sets up a concept of “best value” instead of just the lowest bidder. Public tenders will still be awarded to the lowest bidder, but the new legislative framework will make it a lot easier for public bodies to go through a request for proposals. That gives public bodies more flexibility to consider factors other than just the price, when awarding the contract.

To make the process transparent, the government is transforming the Government Purchasing Agency to a more arm’s length agency, renamed the Public Procurement Agency.

The Liberal government’s new Independent Appointments Commission will select the new role of chief procurement officer, and it will be a six-year term which will hopefully make it a non-political independent role.

The law will be debated in the fall sitting of the House of Assembly, but Joyce said it’ll likely be sometime in the second half of 2017 before it’s proclaimed into law and fully enacted.

There’s a lot of work to do, setting up the new website, and training government agencies and municipalities on the new procurement rules.

The whole issue of public procurement legislation has been a bit of a political football over the years. Then-premier Danny Williams promised to enact it in the 2008 election campaign, but never got around to doing it. Four years later, then-premier Kathy Dunderdale made the same promise during the 2011 election, and the Progressive Conservative government even went so far as to give notice to the House of Assembly in 2012, but they backed away from it at the last minute.

Joyce wouldn’t say why the previous Tory government failed to act on the file, but he said it might be worth asking the minister who was responsible for the file at the time — Opposition Leader Paul Davis.

 

jmcleod@thetelegram.com

Twitter: TelegramJames