January 15, 1999
(Works, Services and Transportation)

Electronic tendering to replace traditional advertising

Rick Woodford, Minister of Works, Services and Transportation, announced today that a system of electronic tendering will be implemented for all government departments.

Mr. Woodford said traditional newspaper advertisement for goods, services and construction tenders for government will be discontinued as of July 1, 1999.

Minister Woodford said the posting of tender calls electronically is a more cost-effective way of doing business. Additionally, it reaches an ever wider audience at a much more cost-effective rate.

The minister said the six-month transitional period will provide the supplier community time for adjustment to the new concept of public tendering. Government will then periodically run information advertisements that will indicate where public tender information can be found.

Mr. Woodford said recent amendments to the Public Tender Act together with revisions to the accompanying regulations allows government to use electronic tendering in place of traditional newspaper advertising. The minister said it is costly to advertise in larger newspapers, particularly when more local or regional media publications can effectively reach the pool of prospective bidders.

The minister said the initiative was prompted as a result of electronic tendering commitments made under the Atlantic Procurement Agreement and the Agreement on Internal Trade.

This commitment brings with it a requirement for government funded bodies to tender electronically for acquisitions of goods, services and construction exceeding the threshold of $25,000, $50,000 and $100,000 respectively. To date, the Government Purchasing Agency satisfies this commitment by posting all such notices via an Internet site developed for this purpose.

The minister said a departmental committee has been established to analyse the various options available through the private sector and to determine the best alternative for government.

As well, a policy manual will be written and adopted by government in accordance to the trade agreements outlining guidelines and standards that must be met by private service providers wishing to advertise and distribute government bid opportunities through an electronic tendering mechanism.

Minister Woodford said the guidelines will be developed over the coming weeks and that they will be publicly announced at that time.

"At that stage, we will invite anybody who wishes to be one of the service providers to make their presentations to government," the minister said. "We anticipate there will be several and that this will allow for a competitive environment for suppliers and contractors wishing to avail of this service."

The minister added that this will ensure that suppliers will have options to choose from and that they get good value for their money.

Subsequently, acquisitions for goods and services with a value of $5,000 or greater will be made available to private sector providers for tender advertisement and document distribution via an electronic tender service. All construction acquisitions with a value of $5,000 or greater will be made available to private service providers for tender advertisements only, at least until such time as the necessary technology has been developed to transmit tender drawings as well.

The minister said the Government Purchasing Agency will no later than July 1 of 1999 cease all distribution of bid documents for goods and services with a value of $5,000 or greater.

"Within one year of this initiative coming into force, government may choose to reduce this value to zero dollars if it is deemed that adequate coverage of the Newfoundland and Labrador supplier community exists with the electronic tender service providers," the minister said.

The minister said private sector providers are soliciting the government in order to gain access to government tenders for the purpose of advertising tenders and distributing the relating documents on their own electronic systems. He stated: "Ultimately, these service providers will combine such tender notices with other value added services. i.e bid matching and tender award information, as well as ensuring the supplier community has open and transparent access to all bid opportunities arising from government funded bodies."

Minister Woodford says the decision to give electronic tendering service providers access to government tenders will enable the province to achieve two significant benefits.

"First of all, as indicated, the province will meet its requirements under the various trade agreements by providing equal access to tenders regardless of a company's geographic location in the country, and, secondly, cost savings will be realized by government as the advertising and distribution costs will be shifted from government to the private sector."

Mr. Woodford said the switch to electronic tendering is enabling government to operate in a more business-like manner.

Backgrounders on (1) Electronic Tendering, (2) The Atlantic Procurement Agreement, (3) The Agreement on Internal Trade and (4) Public Tender Act and Regulations follow.

Media contact: Gary Callahan, (709) 729-3015.

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(1) ELECTRONIC TENDERING

a) What is it?

Electronic tendering has evolved over the past decade from a dial up modem to modem computer access to a more elaborate Internet based tendering system. In today's terms, electronic tendering may be defined on a broad spectrum from a simple Internet based system that displays only a brief description of the commodity being procured to a more sophisticated Internet system that provides suppliers with the ability to download and pay for complete tender documents (specifications included) in electronic form, all without any paper being produced. Value added electronic services are also being offered by service providers that include bid matching and contract award information. The long term prospects of an electronic avenue include electronic submissions of tender responses, supplier conferencing and award notification to the successful supplier as well as electronic commerce developments for billing and payments.

B) Who uses it?

The users of electronic tendering are divided into the categories of internal users (buyers, administration and management) and suppliers. From the buyers' perspective, electronic tendering would manage their tender opportunities. Using such a system, the buyer could post tender announcements on a web site by transferring the documents electronically from the buyer's computer, update award and bid information, view all the posted opportunities and see which suppliers have requested tender documents. This allows wide geographical dispersion of information. The buyers that would potentially use such a system would be those in government departments as well as municipalities, academic institutions, schools and hospitals.

From the management perspective, an electronic system provides an audit trail while also enhancing document transfer and storage efficiency both in time and cost. Both of these are of particular importance with regard to construction contracts, as maintaining blueprints and larger specifications can be a cumbersome and time consuming task.

From the suppliers' perspective, it will allow them to view tender opportunities on-line. Under the Agreement on Internal Trade, each province is required to post tender opportunities electronically. Supplies can access tender opportunities across Canada without having to access the daily newspapers. The suppliers that would utilize such a system are construction vendors, construction consultants, vendors for goods and services and any other person having reason to access such information.

2. THE ATLANTIC PROCUREMENT AGREEMENT

The Atlantic Procurement Agreement (APA) came into effect on September 30, 1992 and with its inception a number of commitments. Specifically, the APA requires the parties to the Agreement to provide electronic access to tender notices to all jurisdictions. The intention of this commitment is to provide electronic tender notifications to ensure that suppliers are given accessibility to this information and not restricted by geographical boundaries. The APA was revised in 1996 to include not only government departments but academic institutions, schools and health and social service organizations.

Copies of this can be obtained from GPA or viewed at www.gov.nl.ca/tenders/publink.htm

3. THE AGREEMENT ON INTERNAL TRADE

The Agreement on Internal Trade (AIT) entered into force on July 1, 1995 and includes government departments, agencies, commissions and Crown corporations of the 10 Canadian Provinces, the two territories and the federal government. There is also an annex to the AIT recently negotiated and ready for signature and will include municipalities, academic institutions, schools and hospitals under the agreement. The effective date is scheduled for July 1, 1999.

Copies of this can be obtained from GPA or viewed at www.gov.nl.ca/tenders/publink.htm

4. THE PUBLIC TENDER ACT AND REGULATIONS

The Public Tender Act is the primary piece of legislation governing the acquisition of goods, services and construction by the Government of Newfoundland and Labrador and by agencies of government. The act provides for a competitive bidding process. It was enacted for the purpose of ensuring that government contracts are awarded in a fair and equitable manner, while achieving maximum cost effectiveness for the public purse. The act and regulations provide specific guidelines which govern procurement. These documents can be obtained from GPA (Government Purchasing Agency) or the Queen's Printer.

1999 01 15 12:35 p.m.