N.L. businesses get preference
The provincial government is changing procurement rules to direct more business to local companies, but concerns over transparency are being raised by opposition parties.
On Monday, acting Service NL Minister Tom Osborne announced a local preference provision is being introduced for public procurement at all public bodies, a move Osborne says will direct more government business to local firms.
Under the new rules, should a Crown corporation award a $5.283-million contract for construction, 10 per cent of the contract’s value must go to local firms.
“These measures that I announced today reflect our immediate response to some of the concerns facing businesses in our provinces,” said Osborne.
Osborne says a committee of cabinet members and government officials is being struck to further review procurement rules. The committee is due to file its report within six months. The Telegram asked for the composition of the committee, but details were not provided by deadline.
The changes announced also include raising the threshold before a public call for bids is issued by public bodies.
“The thresholds at which an open call for bids are required have been raised to allow more opportunities to direct business to local suppliers through a limited call process,” said Osborne.
“The procurement process in Newfoundland and Labrador affects all public bodies, including municipalities, health authorities, school boards, academic institutions, and government departments and agencies.”
Previously, the threshold for an open call for bids was $10,000 for goods, $50,000 for services and $100,000 for construction.
The thresholds have all at least doubled, with the maximum threshold of $264,200 for Crown corporations. Anything below that amount for goods, services or construction for a Crown corporation — such as Nalcor Energy — does not require the typical open call for bids.
Osborne says there will still be transparency for contracts awarded with the new thresholds.
“For any limited calls under these thresholds, we will maintain our preference for a three-quote process,” said Osborne.
“Reporting requirements will be enhanced so that any limited call between the former threshold and the new higher thresholds for public bodies will be required to publicly report the successful bidder and related award information, including the commodity, the date of the reward, the financial value of the contract, the term of the contract and any renewal options.”
That doesn’t sit well with New Democratic Party Leader Alison Coffin.
“Let’s go back and look at some other things that have happened recently. Paul Mills’ hiring and Gordon Mcintosh’s hiring and Carla Foote’s hiring. They told us about it after the fact, or we found out about it, but it didn’t help the process and it wasn’t particularly transparent and it was very biased,” Coffin said.
“If it’s in the context of those breaches that we’re now allowing greater spending with less oversight, yeah, all kinds of red flags are going on.”
The definition of local is also being questioned by Tory MHA Loyola O’driscoll.
Under the provision, a local company does not have to be located in the province in order to benefit from the new rules.
“If they’re established in the province, they’re paying tax in the province, and employing people locally, they will have access to the local preference,” said Osborne.
Under the guidelines for local preference, Quebec-based Snc-lavalin would still have access to contracts, as an example.
O’driscoll says he welcomes the local hiring provision — something Tradesnl has been advocating for, for years — but he questions whether local firms will really be given preference.
“We have to be on top of it. We have to make sure it’s administered right,” he said.
“It’s something we’re concerned with, but we’re hopeful it’s something that will help Newfoundland and Labrador.”