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Council tables procurement policy until October meeting

Posted on September 25, 2019 by Taber Times

By Trevor Busch
Taber Times

Presented by Town of Taber administration as an effort to streamline the procurement process, proposed policy changes have drawn a mixed reaction from town council.

According to administration, the policy is currently five years overdue for review, and needs to be brought into better alignment and compliance with the Municipal Government Act, municipal bylaws, council policies, and procurement strategies and opportunities established by the Alberta Urban Municipalities Association (AUMA) and Rural Municipalities Association (RMA).

“This is a fairly significant policy and procedure that guides a lot of what we do every day in our purchasing of materials,” said CAO Cory Armfelt at town council’s Sept. 9 meeting. “It’s important that we get this right. There’s no rush on passing this.”

As justification for the moves, administration pointed to “decreased operational costs” and a “decreased impact on operational/administrative resources and staff.” The updated policy includes five key changes to the town’s procurement process for products and services.

Under business trade agreements, a section has been added that directs the town to employ the use of purchasing agreements and trade programs established by other government agencies and agents such as Affinity, and standing offer agreements through RMA and AUMA.

The previous policy combined required documentation with the procurement strategy or method. The revised policy specifies the procurement method separately.

Competitive bids are required for any procurement estimated over $25,000. These competitive bids may take the form of an ITT (Invitation to Tender), RFQ (Request for Quotation), RFI (Request for Information), RFP (Request for Proposal), or SS (Single or Sole Source). Competitive bids are not required for goods or services where the supplier is a department, agency, or utility of the federal, provincial, regional or municipal government, or where the supplier has been established as a “preferred vendor” as part of the Trade Program of RMA.

A statement on local preference has been added to the policy, and a section on local preference has been included in the procedure.

“There’s no guideline. Is it $1? Is it $100? Is it $1,000?” questioned Coun. Joe Strojwas. “At what level do we give consideration to a Town of Taber supplier?”

“It’s not recommended that you do, to be honest,” said procurement manager Louise Parsons. “All of the national agencies, the Purchasing Management Association of Canada, the PMAC, they do not recommend local preferences. However, having said that, in our procedure what we are encouraging is that if there’s anything under $25,000, if there’s a local source of supply, that we give a local preference.”

After further discussion, Strojwas asked if Parsons would be comfortable with the town raising the local preference ceiling to $75,000.

“Am I comfortable from a professional perspective? No,” said Parsons. “Am I comfortable from the perspective of the town getting the best bang for their buck? Not necessarily. I’d rather work with the vendors, and have them be more competitive. To go up to $75,000, I think is too high.”

The Purchasing Cards Program has been revised to include an increase in the maximum value per individual purchase, intended to provide more convenience for employees and provide rebate incentives based on total dollars spent, lower processing cost, reducing the procure-to-pay cycle and contributing to more local purchases.

The procurement process will be followed under the established Procurement Policy and Procedures, and administration will approve awards under its delegated authority, but only procurement awards over $75,000 that are outside of the approved budget will go to council for approval.

Most of council’s questions and concerns regarding the proposed changes centered on that award process and administration’s authorization. Coun. Garth Bekkering asked what the process had been under the policy in the past.

“Anything over $75,000 went to council, regardless of whether it was inside or outside of budget,” said Parsons.

“It’s always been that way, correct? So we want to change that. Why?” questioned Bekkering.

Parsons explained that taking all projects to town council for approval has created an unnecessary workload.

“The biggest thing — and we’ve talked about this a number of times, in terms of administration and the time and the effort put in. So as an example, in 2019 I have put together 44 RFPs, tenders, those kinds of things, all of which probably 40 to 50 per cent have come to council because they’re over $75,000. And not once in 2019 have you gone against our recommendation. So in terms of the time and effort put into that to do that, part of us assumes that I’m doing my job well — or the folks in the Recreation Department, or Planning, or Public Works — are evaluating appropriately, it’s being approved by the directors. And so the time and effort to do that.”

Armfelt asserted that in certain procurement situations the municipality is duty bound to award a tender to the bidder that most closely meets specifications, which makes bringing the project back to council for approval largely unnecessary.

“That was a way administration could take off of council’s plate, because essentially council is duty bound to award the tender to whoever we indicate through that tender through performance, and price, and technical specifications, whoever gets that, we’re obligated to give it to them. And that comes from the external legislation on governing tenders, and case law.”

Throwing out a hypothetical scenario involving a planned 56th Avenue extension, Bekkering was concerned about a change that he viewed as a lessening of council’s control over individual projects throughout a calendar year.

“So from what I understand, once it’s fixed within that budget for 2020, then it must go ahead. Council cannot change their mind. Am I wrong here?”

“No, that’s correct. It must go ahead,” replied Armfelt. “So our administration’s commitment to council is that once council passes that capital plan, I am held accountable to meet that capital plan. So if you pass the capital budget with 56th Avenue in 2020, and that does not happen, then I’m held to account for that non-performance.”

Bekkering sought further assurance that council’s control over financial decisions was not being abrogated in favour of administration.

“I’m sorry to belabor this, but this really concerns me because let’s say in January council decides — due to some unforeseen circumstance which just happened, the police station blew up or whatever — we say no we’re going to cancel that $2.5 million for 56th Avenue, take it off the budget even though it’s been approved, and put it towards a new police station. Can we do that?”

Armfelt replied in the affirmative.

“Absolutely. That’s a capital budget, and that can happen at any time.”

Coun. Louie Tams would also weigh in on this proposed change.

“Procurements only over $75,000 will be coming to council, and I have some concerns with that. I really think we need to think that one through.”

Bekkering remained concerned about the proposal.

“The last thing I would want is for administration to be able to go ahead with an approved budget without any input from council to change their minds on aspects of it.”

Strojwas suggested tabling the discussion and approval of the policy and procedure, and Tams advocated for postponing it until after the AUMA convention.

“It’s by no means that we have to approve this at this meeting tonight,” said Strojwas. “We can reflect upon this and have some discussion.”

Following discussion, council voted unanimously to defer any amendment or renewal of Procurement Policy CS-FIN-1 to their Oct. 15 meeting.

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