Debates of May 16, 2007 (day 8)

Thank you, Mr. Speaker. Mr. Speaker, I would like to ask another set of questions to the Minister of Human Resources with regard to Northstar losing the EAP contract they have had for seven years. Mr. Speaker, there are such differences in facts about this case between the government and Northstar. Northstar says they were never advised about this inverse ratio calculation. The government says they were, that it was included in the RFP. The government says there was only one name that was added inadvertently, but Northstar states that there are at least three people they know of who were included as part of the subcontractors. Mr. Speaker, we all met in the Legislature with these professionals and they all confirmed the position of Northstar. So this is a real predicament for us.

Mr. Speaker, in the larger picture, I understand that the way the pricing was done for this contract, the southern bidder went by bidding about a $2,000 less than Northstar. Northstar feels as soon as they went over the limit of money that the government had in mind, that they were out of the running. In the interest of the social network and the counselling infrastructure that this business has built over the years, it’s a real loss for us. Is the Minister not concerned about the impact of that in the whole scheme of things? Thank you, Mr. Speaker.

Thank you, Ms. Lee. The honourable Minister of Human Resources, Mr. Dent.

Return To Question 103-15(6): Awarding Of Contract For GNWT Employee Assistance Plan

Thank you, Mr. Speaker. Mr. Speaker, the Member said the government has taken a position that the proponents were all advised that an inverse ratio would be used. That’s not the case. This was not a situation where the RFP was identified that an inverse ratio would be provided. According to the BIP monitoring office, that is not an unusual process to use when a fixed price or a set price is used in an RFP. So when you advertise that you are looking for a fixed price, it’s quite common to use the inverse ratio.

According to Public Works, this methodology is not prejudicial to northern proponents because the cost of infrastructure is accounted for in the evaluation of the value of northern and local goods and services. In terms of the BIP preference, that was reviewed as well. The way in which that was calculated in this case for Northstar, and I am advised that there was a mathematical error found in the analysis, but it actually worked to the benefit of Northstar.

So I am afraid that while there is an assertion here being made that this is not fair and not right, the advice that we have gotten from Public Works is that it’s quite standard and that, in fact, it doesn’t prejudice northern contractors.

Thank you, Mr. Dent. Supplementary, Ms. Lee.

Supplementary To Question 103-15(6): Awarding Of Contract For GNWT Employee Assistance Plan

Well, I guess it’s a case of he said/she said now, because he’s going by what the department is telling him and I am telling you, Mr. Speaker, from the perspective of Northstar, the government has to recognize that it costs more to run a business here. The counsellors for Northstar are paid more. They have their offices here. This other business could run a counselling service over the phone and keep all their administrative structure down south giving them an advantage. Mr. Speaker, I would like to ask the Minister, is he not concerned about the fact of Northstar not having this contract and not having their presence in the community that we are seeing a complete destruction of a counselling service, social infrastructure in the North. Thank you, Mr. Speaker.

Thank you, Ms. Lee. Mr. Dent.

Further Return To Question 103-15(6): Awarding Of Contract For GNWT Employee Assistance Plan

Thank you, Mr. Speaker. Mr. Speaker, like all Members of government, I am a strong supporter of the business incentive policy, which is a policy that is set up to encourage northern businesses and to recognize the differential cost of doing business in the North. So this government does support northern business and we’ve set a policy in place to ensure that we do. In this case, the business incentive policy was applied and the results of the RFP are as they are. Yes, I would always prefer a northern business win a proposal, but our policy is set up to say that the government is prepared to take this much of a difference and provide that preference. Above that, it isn’t something the government can arbitrarily add money to a contract to follow through on.

Thank you, Mr. Dent. Time for question period has expired, but I will allow the Member a short supplementary, Ms. Lee.

Supplementary To Question 103-15(6): Awarding Of Contract For GNWT Employee Assistance Plan

Thank you, Mr. Speaker. I feel like we had this discussion before when we were talking about constructing the jail where there are lots of benefits to having business being done in the North than just going for cost-efficiency. There is a lot of economies of scale that are going to be lost because there are so many more benefits having these businesses operate out of here that multinational corporations cannot provide. I am losing my question here. Mr. Speaker, Northstar’s position is the cost of operating is so high here that even with the business incentive…Okay, let me just ask a question. Sorry.

The southern company that won the contract apparently used the subcontractors to qualify under BIP. They…

A question, Ms. Lee.

…thank you.

Thank you, Ms. Lee. Mr. Dent.

Further Return To Question 103-15(6): Awarding Of Contract For GNWT Employee Assistance Plan

Thank you, Mr. Speaker. The Member talked about the similarities between the jail contract and this one. I would like to point out that in the jail contract, the government-of-the-day removed BIP from consideration and didn’t protect northern businesses. In this case, the business incentive policy is applying to the evaluation of the contracts and, yes, the government agrees that northern businesses deserve that extra protection. But there is a limit to how much extra protection is allowed under the policy and the policy, I am advised by the BIP monitoring office and by Public Works, has been properly applied in this case. Thank you, Mr. Speaker.

Thank you, Mr. Dent. Final, short supplementary, Ms Lee.

Supplementary To Question 103-15(6): Awarding Of Contract For GNWT Employee Assistance Plan

Thank you, Mr. Speaker. But the point is, businesses like this can never play on an even playing field. It doesn’t take into consideration the cost of doing business for the northern businesses here.

Question, Ms. Lee.

Did the government look at the added benefit of keeping such a northern business here as a cost of rendering the contract? If there was some amount of money set aside, why didn’t they enter into a negotiated contract to keep the infrastructure in place instead of bringing up all…

Thank you, Ms. Lee. Mr. Dent.

Further Return To Question 103-15(6): Awarding Of Contract For GNWT Employee Assistance Plan

Thank you, Mr. Speaker. The government has a policy; it’s the business incentive policy. If Members feel that policy needs to be reviewed and the percentages allowed in that need to be changed, we can do that. But at this point, there is no way to arbitrarily go beyond that once you have gone out for an RFP. Governments often go out for RFPs to ensure that we are getting good value for money. In this case, there is not anything else that we could have done. Thank you, Mr. Speaker.