Transcript Government Procurement and Competition Policy - Anti

John Brooks, ANJO Global Consulting Ltd
Ottawa, CANADA : [email protected]
1-613-286-0541
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Buenos días
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Canadian context
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Canada’s federal public procurement
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Default position:
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Competition optimised
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Corruption minimised
◦ Competitive procurement process
◦ Competitive supply market
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Ten provinces: Alberta, British Columbia,
Manitoba, New Brunswick, Newfoundland
and Labrador, Nova Scotia, Ontario, Prince
Edward Island, Quebec, and Saskatchewan
Three territories: Northwest Territories,
Yukon, and Nunavut
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Population (2012 est.): 34 Million
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GDP = $1.839 Trillion (2013 est.)
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GDP growth = 1.9% (2012 est.)
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Member of the G7, G8, G20, NATO, NORAD, NAFTA,
OECD, WTO/GPA, many bilateral trade agreements
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Two official languages – English and French
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Multi ethnic population
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Federal - responsible for issues that affect Canada
as a whole country such as international relations,
immigration, criminal law, taxes, national defence,
and foreign policy.
Provincial - responsible for issues that affect the
province as a whole such as education, health care,
the environment, agriculture, and highways.
Municipal – responsible for community issues such
as public parks, libraries, social services, local
police and fire services, garbage removal,
recycling, and public transportation.
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Doing Business – 17th of 183 economies
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Competitiveness – 14th of 148 countries
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Transparency - 9th of 174 countries
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Source: Transparency International report – 2012)
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Service industries
transportation, education,
health care, construction, banking, communications,
retail services, tourism and government. More than
75% of working Canadians now have jobs in service
industries.
Manufacturing industries - paper, high technology
equipment, aerospace technology, automobiles,
machinery, food, clothing and many other goods.
Natural resources industries - forestry, fishing,
agriculture, mining and energy. A large percentage of
Canada’s exports are natural resources commodities.
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National – composite data not available
Based on 10-15% of GDP ($CAD 1.839
trillion) – national public procurement
estimated to be:
$CAD 18-27 billion
(Federal $CAD 16 billion/yr)
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Annual spend of $CAD 16 billion/yr
Public Works & Government Services Canada (PWGSC)
◦ Central procurement agent for approx. 140 MDAs
◦ MDAs have delegated authority for some purchases
Pooled procurement with other levels of government
◦ Limited common purchases with provinces
◦ Some interprovincial pooled procurement
MDA = Ministries, Departments and Agencies
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Fair procurement
Fair supply market
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Competition
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Anti-corruption
◦ Promoting effective
competition between
suppliers
◦ Ensuring the integrity of
the public procurement
process
◦ Preventing collusion
between suppliers
◦ Limiting the potential
abuses by government
stakeholders
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a.
Contract – Common law
Legislation - Acts:
◦ Access to Information
◦ Bankruptcy and Insolvency
◦ Competition
◦ Criminal Code
◦ Conflict of Interest
◦ Defence Production
◦ Department of Justice
◦ Department of Public Works & Government Services
rest Act
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Legislation (continued)
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Policies/Regulations
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Federal Accountability Act
Financial Administration
Integrity
Lobbying
Official Languages
Privacy
Public Servants Disclosure Protection (whistleblower)
o Treasury Board Contracting Policy.
o Government Contracts Regulations
o Code of Conduct for Procurement
o PWGSC Supply Manual
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Trade agreements
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WTO – Government Procurement Agreement
North American Free Trade Agreement (NAFTA)
Agreement on Internal Trade
Several Free Trade Agreements with countries
 Applicability to public procurement
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Procurement planning
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Publication of requirements - over $CAD 80K
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Advance Contract Award Notice (ACAN)
◦ Sole source purchases
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Public opening – limited
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Fairness Monitors
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Rigorous internal approval/review process pre-award
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Major procurements: political endorsement, not selection
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Consolidated purchases & frame agreements: optimised
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Debriefing of bidders
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Publication of awards
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Internal & External audit
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No preferential treatment
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Seeks to level the playing field
◦ Ease of access to information, registrations
◦ Elimination of minor fees
◦ Provides advice/outreach/seminars
◦ Links SMEs with ministries that provide grants, etc
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Since 2007 - contracts awarded to SMEs
◦ 43% (by value) of contracts to Canadian contractors
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Mandatory set-asides
◦ Aboriginal population - recipient of purchase
◦ Best value must be assured
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Voluntary set-asides
◦ Where qualified Aboriginal suppliers exist
◦ Best value must be assured
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Scope of purchases per year:
◦ Estimated that 75,000 contracts issued
◦ Total value $CAD 16 billion
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Complaints to CITT 2011-12
◦ 53 contracts
◦ Value estimated - $CAD 100 million
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Complaints to Procurement Ombudsman 2012/3
◦ 3 contracts
◦ Value – estimated $300K
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Cover bidding gives the impression of competitive
bidding, but, in reality, suppliers agree to submit token
bids that are usually too high.
Bid suppression or withdrawal is an agreement among
suppliers either to abstain from bidding or to withdraw
bids.
Bid rotation is a process whereby the preselected supplier
submits the lowest bid on a systematic or rotating basis.
Market division is an agreement among suppliers not to
compete in designated geographic regions or for specific
customers.
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There are few bidders in the market that offer the
works, goods or services.
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Price higher than in other jurisdictions/private
sector
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Two or more proposals contain similar
handwriting, typos, or mathematical errors.
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Over a series of awards, one bidder always wins,
regardless of competition.
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Special attention where few bidders
◦ Allow for substitute products whenever possible
◦ Develop alternative sources of supply
◦ Have ‘in-house’ estimates
◦ Require certification of compliance with legislation
◦ High penalties for transgressors
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Applies to all PWGSC contracts including:
◦ All values
 Construction contracts;
 Goods and services contracts
 Real property transactions
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A bidder is ineligible to do business with PWGSC with a conviction for:
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Frauds against the government under the Criminal Code of Canada;
Frauds under the Financial Administration Act;
Payment of a contingency fee to a person governed by Lobbying Act;
Corruption, collusion, bid-rigging, etc under the Competition Act;
Money laundering;
Participation in activities of criminal organizations;
Income and excise tax evasion;
Bribing a foreign public official; and
Offences in relation to drug trafficking.
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The Integrity Framework is conviction-based and
does not include discretionary provisions.
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PWGSC does not apply its integrity framework to
sub-contractors.
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Some contracts stipulate that the contractor
agrees to bind the subcontractor by the same
conditions by which the contractor is bound
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No time limit on the ineligibility of convicted bidders
Convicted bidders will remain ineligible unless:
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Have received a pardon (record suspension); or
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Capacities were restored by the Governor in Council, or
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Public Interest Exception applies
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The Public Interest Exception applies to convicted contractor but:
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only one contractor is capable of performing the contract;
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emergency;
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national security;
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health and safety; and
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economic harm.
Exception applied on a case-by case basis
◦ Contract subject to:
 stringent controls
 administrative measures and monitoring
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• Conviction is post contract award, PWGSC may
• terminate a contract or real property agreement for
default if a conviction occurs post contract award,
or
• may continue with the option and impose enhanced
oversight and monitoring measures.
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PWGSC does not maintain a list of ineligible bidders.
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Certification and verification are done for each bid
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Bidders certify in bids free from convictions listed
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PWGSC verifies the winning bidder’s eligibility
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An independent law enforcement agency, ensures
that Canadian businesses and consumers prosper in
a competitive and innovative marketplace.
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Civil and criminal penalties for:
◦ Bid-rigging.
◦ Conspiracies to lessen competition.
◦ Price discrimination.
◦ Price maintenance.
◦ Refusal to supply.
◦ Predatory pricing.
◦ Mergers.
◦ Abuse of dominance.
◦ Tied selling.
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Spend of $CAD 16 billion/yr.
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Estimated 75,000 contracts
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Uses a well legislated and regulated process
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Significant governance provided by related legislation
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Transparency, openness & fairness
◦ Acknowledged by stakeholders
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Cadre of well qualified professionals in government
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Effective separation of duties within government
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Well ordered and educated supply market
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High degree of prosecution certainty for transgressions
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Significance of penalties for transgressions
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Muchas Gracias – Thank you
John Brooks
ANJO Global Consulting Ltd
Ottawa, CANADA
[email protected]
1-613-286-0541
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