Government sees procurement changes as good for taxpayers and industry
Deputy Premier Gordon Wyant believes that the provincial government's new procurement service is a win-win for Saskatchewan.
Wyant spoke at a Moose Jaw Chamber of Commerce luncheon on Dec. 19 to outline the Saskatchewan government's public procurement transformation.
In June of 2014 the provincial government created Priority Saskatchewan, a new branch of SaskBuilds. It is responsible for ensuring procurement across ministries and the Crown sector is fair, open, transparent, accountable and based on international best practice. SaskBuilds began implementing the Procurement Transformation Action Plan in March 2015. The 13-point plan is expected to streamline the procurement process, saving taxpayer dollars, while also ensuring Saskatchewan businesses are treated fairly and giving them more opportunities to secure contracts.
"To see the transformation and the growth of what we started a number of years ago has been really exciting," said Wyant, who added that it was exciting "to hear from Saskatchewan companies, Saskatchewan suppliers and employees that what we're doing is actually making a difference in terms of providing more work to Saskatchewan people and more support in the economy." Last October in the Speech from the Throne, the government announced that they would be moving to a single-window procurement for the $2 billion in goods, services and construction that are procured by the executive government ministries each year.
Wyant said that they don't have a hard target in terms of how much money they hope to save taxpayers through this change or how many more contracts they hope to see Saskatchewan businesses issued, but they are keeping a close eye on both bottom lines and are confident to see positives in both areas.
"With what we're doing now through this single-window procurement, we're anticipating it to be in the millions of dollars in terms of the money we're going to save through the procurement by streamlining it all," said Wyant who is the minister in charge of SaskBuilds. "We haven't set any targets, but we know it's going to save some money for the taxpayer and we know it's going to be beneficial for Saskatchewan suppliers.
"One of the things we'll do after a number of months -- perhaps a year -- is a little bit of an analysis. We know how much money we spend on procurement now and we'll be able to tell at the end of (2019) how much we're spending on procurement and how much more is being generated for Saskatchewan businesses. So, while we don't set a particular target, we have some numbers in mind. We'll be able to see after a period of time how successful we've been."
Wyant cited the Chinook Power Station, a combined cycle natural gas generating facility in the R.M. of Swift Current, as one of the early successes of the new procurement process. SaskPower will own and operate the 350-megawatt natural gas plant which is anticipated to cost $680 million and is expected to provide clean electricity to approximately 300,000 homes.
"With the Swift Current combined cycle plant we saw $165 million of that plant go to local suppliers in that community and in the surrounding communities. We can see that kind of success for a plant like that, we can only imagine the kind of success we're going to see across government," Wyant said.
Wyant noted that there was legislation in place previously where price was the only determining factor for the Ministry of Highways and Infrastructure and the Ministry of Central Services in issuing contracts.
That legislation has changed to take best value into ac- count. Best value is a trade compliant philosophy that allows for factors that bring value beyond just price into play.
"We used to procure based on lowest price," Wyant said. "You can imagine that sometimes lowest price isn't going to give you the best product over time. Things like life cycle cost is an important component. Cost will be important, but life cycle cost will be important as are a number of other things that come into play. Innovation is another piece that will come into best value -- to make sure we get the best value for Saskatchewan tax payers." The best value legislation helps the Saskatchewan government try to strike a balance between making sure they're trade compliant, while also having more flexibility to award contracts locally.
"Everybody talks a good story when it comes to free trade between provinces, but at the end of the day there are a lot of things that get in the way of that," Wyant said. "To the extent that we have trade obligations, we're going to be compliant, but we're going to take full advantage of any opportunity within those agreements."
Wyant noted that Saskatchewan started procurement transformation long before Alberta and British Columbia made similar changes, but he feels that their partners in the New West Partnership have adopted a more protectionist stance than Saskatchewan.
"What troubles us about Alberta and British Columbia is they're really focusing on protecting their local supplier. We want to do that too, but we want to do it within the parameters of our trade agreements," Wyant said. "So be respectful of the New West Partnership and respectful of the AIT (Canadian Agreement on Internal Trade). I'm always a little concerned that some of our partners pay more lip service to those agreements than actual compliance to them.
"We just want to make sure that the work we're doing in Priority Saskatchewan is trade compliant and if we can do that within the parameters of those trade agreements to benefit Saskatchewan suppliers, that's what we want to do."
Wyant also vowed that they were going to be more proactive in ensuring their trade partners are living up to their trade agreements.
“We've seen the province of Alberta be very close with their suppliers and we hear lots of anecdotal information about Saskatchewan suppliers being cut out of procurements in Alberta," Wyant said. "That worries us a little bit, but as Premier Wall used to say, 'We're not going to be Boy Scouts about this any more, we're going to make sure that we make sure whatever we can -- within the parameters of the law -- to look after our local suppliers.'"