Mr. Speaker, solesource contracting is the buying of goods or services without competitive bidding. In February, the Finance Minister announced changes in the limits for granting of solesource contracts. The solesource contract limit for goods and non-professional services was increased from $5,000 to $25,000, for professional services from $25,000 to under $50,000, and for architectural and engineering professional services, to under $100,000. Solesource purchasing is governed by the procurement guidelines of the GNWT contract regulations. The procurement guidelines list a series of criteria, standards, and evaluation points which must be met. They allow purchases where delay would be “injurious to the public interest,” or “only one party is available or capable of doing the work.” Solesource purchasers must complete an authorization request explaining the circumstances which make sole sourcing necessary. The criteria would appear to make the practical exceptional. In reality, it is common place. The most recently published 201314 GNWT report of contracts over $5,000 shows that $41.6 million was spent on sole source. Sole-source appears to be a mechanism allowing middle to senior managers to conveniently make purchases without the delays or administrative burdens of bid contracting or price negotiation. Now, those levels of convenience are dramatically larger, raising large concerns. At the very least, routine use of sole-source purchasing can lead managers to resort too frequently to noncompetitive supply. Without reporting to the marketplace occasionally, purchasers may be unaware of product improvements, price shifts, and the availability of new sources of supply. Competitive bids which accrue savings of as little as $1,000 per contract could accumulate major savings across the volume of small contract purchasing. It is a fact that $25,000 to $100,000 is no longer a small purchase. Raising the ceiling on sole-source contracts will negatively impact many northern small businesses. It is the smaller contracts that northern businesses bid on because they are compatible with their capacity. While we may not like to speak of it, these higher levels raise the possibility of malfeasance and corruption in the spending of public funds. These elevated amounts increase the…
Member for Yellowknife Centre, your time has expired for Members’ statements.
Thank you, Mr. Speaker. I seek unanimous consent to conclude my statement. Thank you.
---Unanimous consent granted
Thank you, colleagues. Thank you, Mr. Speaker. These elevated amounts increase the possibility of kickbacks and preferment. I’ll be looking for a much more rigorous oversight in this process, and I’ll have questions for the Minister. Thank you.
Masi. Members’ statements. Member for Nahendeh.
Thank you, Mr. Speaker. Mr. Speaker, I rise today to address the need for the government to support our small businesses and entrepreneurs in the Northwest Territories. We have spoken at length in this Assembly about the need to diversify the economy, to support northern entrepreneurs, and to make sure our government’s spending supports our growing private sector. To that end, we have business incentive programs to support northern businesses which face higher costs, and we have policies and regulations that make sure that our businesses and entrepreneurs can compete fairly for government jobs and contracts. Similar to my colleague, I am concerned with some recent changes in the government’s policy on solesource. Mr. Speaker, in the interests of timing and efficiency, some contracts are allowed to be offered without tender or negotiation processes, in other words, solesourced. In the interests of fairness to all potential bidders, those contracts are limited and conditions are applied.
Mr. Speaker, the Financial Administration Manual sets conditions under which solesource contracts can be awarded. They are allowed only if delay in purchasing would be harmful to the public interest, or if only one supplier is available. Recently, Mr. Speaker, the Minister changed the conditions and brought in major increases in the allowable amounts for sole-source contracts. The maximum value of solesourced contracts for goods and nonprofessional services was increased from $5,000 to $25,000, the limit for professional services was increased from $25,000 to $50,000, and the limit for architectural and engineering professional services was increased from $25,000 to $100,000. Mr. Speaker, yesterday I received an email from a small business constituent who seems to have been directly affected by this change in policy. The company was awarded a contract with a value of $10,000 in 2012. This year, a similar contract was solesourced to another agency, which was not even a business. This change in solesource practice without consultation does not fit our commitment to transparency, Mr. Speaker. The awarding of such a contract does not fit with our support of the small business sector, and the sole source of a contract for which there is more than one local supplier does not seemingly meet with the conditions of the solesource policy. Mr. Speaker, it may already be time for change of the solesource policy. Mr. Speaker, at the appropriate time, I’ll have questions for the Minister of MACA. Thank you.
Masi. Members’ statements. Member for Frame Lake.
