Thank you, Mr. Speaker. Earlier I spoke about some changes that the government should undertake that would help small businesses grow, help build our capacity, and keep Northerners working. These are cross-departmental issues, but I will address my questions to the Minister of Finance. As I stated, to bid on government tenders worth over $100,000, bidders must put down a five per cent cash bond or a 10 per cent security bond. Given that this requirement may unduly penalize small businesses that are just doing their best to get ahead or stay afloat in this economy, and given that there's other, more accommodating ways that to protect the government's interest, will the government commit to reviewing this policy and ultimately, increasing that $100,000 threshold to an amount that allows and helps small businesses to compete and grow. Thank you, Mr. Speaker.
Masi. Minister of Finance.
Yes, thank you, Mr. Speaker. Mr. Speaker, the Department of Finance, we will work with our three infrastructure departments -- Transportation, NWT Housing Corporation, and Public Works and Services -- to review the requirement value of the security required on government tender for contracts, recognizing that the regulations for this particular issue are quite old. We will have a review of it and see if there are any changes that can be made. Thank you, Mr. Speaker.
Thank you for the answer. I will follow up with the Minister on that in the future. According to the Government Contract Regulations, all purchases over $5,000 must go to tender. Given that this is also an antiquated amount and doesn't reflect the reality of doing business in 2016, will the government commit to amending the Government Contract Regulations by increasing this $5,000 threshold.
On February 18, 2016, the Financial Management Board approved increases to the GNWT sole-source limits effective April 1, 2016, and that is concurrent with the implementation of the modernized Financial Administration Act. Specifically, the sole-source limit for goods and non-professional services will increase from $5,000 to $25,000; professional services from $25,000 to under $50,000; and for architectural and engineering professional services, to under $100,000.
The Modern Management Initiative is friendly to northern businesses and also addresses inflationary increases since the GNWT sole-source limits were established 20 years ago. This initiative has broad stakeholder support and is consistent with what is being done with other government jurisdictions in Canada and the province of Ontario. ITI will be seeking approval in March to make the corresponding changes to BIP to increase from $5,000 to $25,000, and the Department of Finance is actually preparing a letter to send to the Standing Committee on Priorities and Planning informing them of these changes. But since the question is being asked today, I thought I would respond to that today.
That is very good news. I appreciate that. When awarding contracts for large multi-million-dollar capital projects, do factors such as the ability for local businesses to participate in the contract, the potential for capacity building, the cost savings associated with having locals employed and so on, ever factor into the decision? Or are contracts awarded without consideration of these potential benefits?
For tenders, the Northwest Territories Manufactured Products Policy and the BIP bid adjustments are other factors that are taken into consideration for request for proposals. A number of other factors other than price are taken into consideration when evaluating proposals; criteria may include but are not limited to team experience, methodology, design and construction, project schedule, and BIP adjustment. PWS has developed, in my understanding, has implemented new evaluation criteria for design-build RFPs called community engagement.
As part of this new evaluation criteria, proponents are asked to explain and demonstrate the following: how local labour will be recruited and utilized as part of the project; what plans are in place to provide and maximize on-the-job training opportunities for local residents; understanding the local economy, highlighting how their proposal addressed any economic constraints or challenges; and the approach for communication and collaboration with local government and First Nations organizations. PWS is working with client departments to start using the community engagement criteria for large, multi-year RFP contracts to assist with supporting local labour and businesses.
Lots of good news out of the Minister of Finance today.
---Laughter
That last response answered my next question, so I just want to thank the Minister and let him know that I will be following up with this on the floor of the House and privately.
Masi. More of a comment. Oral questions. Member for Nunakput.
