The Yukon government has set out a list of steps it will take to improve how it designs and awards government contracts, in order to help local businesses compete.
The announcement comes in response to recommendations made by a procurement advisory panel in May. The panel suggested that local contractors would benefit from simpler bid requirements, more communication from the government and better training of government staff.
The government’s response lays out 37 actions it will take to improve procurement in the territory and includes timelines for each one.
One priority will be to approve a fall capital budget or a multi-year capital plan by the fall of 2017, so that tenders can be issued well ahead of the summer construction season.
Highways and Public Works Minister Scott Kent explained that when the main budget is approved in the spring, it’s a challenge to put out tenders before the construction season begins. Issuing a capital budget in the fall would give the government and contractors more time to prepare.
Kent could only point to one other fall capital budget, which was passed by Pat Duncan’s Liberal government between 2000 and 2002.
“It’s a significant departure from what we’ve been doing,” he said.
The government also plans to develop policy that will reduce barriers for local vendors. As an example, Kent said he was approached by a local business that wasn’t able to bid on a certain project because it didn’t have experience with other projects of that size.
“If there’s an opportunity where it makes sense for us to perhaps reduce those types of restrictions to make it easier for local companies to at least get a price in the game, essentially, those are the types of the things that we will look at,” he said.
The government will also create an evaluation program for the procurement process. Kent said the program will look at which contracts should be awarded solely based on price, and which should be “performance-driven.”
“There’s some concern in the local vendor community that not everything should necessarily go to the lowest bidder,” he said.
There are also plans to review the bid challenge process, which allows a business to challenge a contract it believes was awarded unfairly. The advisory panel’s chair has previously said that local vendors don’t feel certain their complaints will be heard under the current process.
But the Yukon government is somewhat limited in that regard, as the bid challenge process is governed by federal trade agreements. At the meeting of the Council of the Federation in Whitehorse in July, Canada’s premiers announced an agreement-in-principle on a new Canadian Free Trade Agreement, but few details about the agreement have been released.
“We’ve been waiting to update the bid challenge policy to see what the provisions to the Canadian Free Trade Agreement might look like so that they align,” said Catherine Harwood, director of the procurement support centre with Highways and Public Works.
The government will also improve procurement training for Yukon government staff, nearly 40 per cent of whom have some authority to purchase goods and services.
It may also update the definition of a Yukon business. Currently, at a minimum, Yukon businesses must employ Yukon residents, own property in the Yukon, operate a year-round office in the Yukon or be owned 50 per cent or more by Yukon residents.
Kent didn’t say how that definition might change.
The government also plans to require that most tenders be open for a minimum of three weeks, and it will take steps to ensure that “the 30-day timeline for payment is not exceeded.”
There are currently no specific targets the government is aiming for with respect to the number of contracts that are awarded locally. But Harwood said her department will be choosing “key performance indicators” to measure in the coming months and years.
Despite the changes underway, Kent insisted that local vendors are already doing very well in the Yukon.
“We do have a very good success rate on local businesses with government procurement,” he said. “Nineteen of 20 of the larger capital projects that have been released over the past number of years have gone to local companies.”
Yukon Chamber of Commerce president Peter Turner said the government’s response is “basically good news.” He believes the single most important change will be better training of government employees.
“There needs to be more consistency through the RFP (request for proposal) process, and that’s going to require specific training,” he said.
He did point to a few actions he would have liked to see that weren’t included in the government’s plan, including the possibility of breaking up larger contracts into “bite-sized pieces.”
He also said the government should include its budget information when it issues a request for proposals, so that contractors know roughly what it’s expecting to spend.
But overall, he said the plan is “a fairly bold and aggressive set of recommendations.”
He said if the changes work, they should result in a “measurable uptick” in the number of contracts won by Yukon businesses over the next five or 10 years.
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Correction: This story has been updated to clarify the criteria the government uses to determine what qualifies as a Yukon business.