Service NL
February 22, 2018

New Public Procurement Act to be Proclaimed Next Month

The Public Procurement Act, which helps modernize procurement by provincial public bodies, will come into effect on March 24, 2018. Regulations to accompany the act have now been published in the Newfoundland and Labrador Gazette.

The regulations include rules regarding open call for bid thresholds; exceptions; group purchasing; delegation of authority; absence of bids; limited calls for bids and procedures; change orders and extensions; and reporting requirements.

Rules relating to supplier debriefings, the complaint process and supplier performance will come into effect six months after the rest of the act is proclaimed.

More information on the regulations is contained in the backgrounder below.

The new Public Procurement Act will replace the decades old Public Tender Act. The new legislation responds to feedback from public consultations, as well as a 2008 report by Read and Associates that recommended changes. The new procurement legislation includes:

  • Increased oversight over a broader range of procurement activity;
  • More transparency in the procurement process;
  • Increased consistency in procurement practices, and greater flexibility in how public bodies can proceed with buying what they need;
  • Provides public bodies with the ability to achieve best value in procurement;
  • Professional services previously not included in the Public Tender Act will now be subject to greater oversight than before;
  • Narrowing the scope of exemptions afforded to Nalcor so its procurement for many operating expenses like office space, supplies and furnishings are now included; and
  • Public reporting will be required on exempted activities.

In its campaign platform and The Way Forward, the Provincial Government committed to modernizing the public procurement framework and expanding opportunities for local businesses. The new framework will take into consideration: innovation and contribution to local economic growth, best value for money, social, economic and environmental priorities, purchasing efficiencies and the scaling of goods and services procurements.

Quote
“The regulations to accompany the Public Procurement Act build upon the key themes of the Act, namely governance, best value, transparency and accountability. They will help ensure consistency in the public procurement process, making it easier for public bodies and vendors to understand and adhere to the requirements of the legislation.”
Honourable Sherry Gambin-Walsh
Minister of Service NL

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Learn More
To read the regulations, visit:
www.servicenl.gov.nl.ca/printer/gazette/extraordinary_issues/2018/NLG180222_EXTRA.pdf PDF Icon

Minister Introduces New Act Respecting Procurement by Public Bodies: www.releases.gov.nl.ca/releases/2016/servicenl/1122n05.aspx

An Act Respecting Procurement by Public Bodies: www.assembly.nl.ca/legislation/sr/annualstatutes/2016/p41-001.c16.htm external link icon

Follow us on Twitter: @GovNLexternal link icon and @ServiceNL_ external link icon

Media contact
Gina MacArthur
Service NL
729-4748, 730-2977
GinaMacarthur@gov.nl.ca

BACKGROUNDER

Overview of Regulations to accompany An Act Respecting Procurement by Public Bodies:

Thresholds:
Thresholds for an open call for bids:

  • Goods – remains at $10,000;
  • Services – increased from $10,000 to $50,000;
  • Public Works – increased from $20,000 to $100,000;
  • Engineering Services and Architectural Services – set at $100,000;
  • Lease of Space – increased from $10,000 annually to $100,000 (contract value).

Exceptions:

  • Exceptions have been added to the new regulations in the event that an open call for bids may compromise security; and if a prequalified supplier list has been established using a request for qualifications;
  • Exceptions can be made in situations of “emergency or a situation of urgency”;
  • Economic development – Building on Section 7 of the Public Procurement Act, the Lieutenant-Governor in Council can approve an exemption that is recommended by the Minister of Tourism, Culture, Industry and Innovation where the procurement is in the best interest of the economic development of the province, and is not precluded by trade agreements.

Group Purchasing:

  • The act provides for group purchasing;
  • The regulations permit a public body to delegate its purchasing authority to another public body for the purpose of group purchasing.

Delegation of Authority:

  • The head of a public body may delegate any power, authority, right, duty or responsibility to a person within that public body;
  • The delegation must be in writing, in the form required by the Chief Procurement Officer, and must identify the person and position to whom the power is delegated and specify the monetary limit.
  • Rules are the same for government departments and agencies, boards and commissions.

Absence of Bids:

  • If no bids, or no qualified bids, are received from an open call for bids, a public body may acquire the commodity through a limited call for bids;
  • This reduces the administrative burden of a second open call and saves time in the procurement process.

Limited Call for Bids and Procedures:

  • If an open call for bids is not required because the acquisition is below the applicable threshold or the compromise of security exception applies, the public body shall issue a limited call for bids;
  • At least three quotations would be obtained, or a fair and reasonable price determined based on market conditions;
  • The Chief Procurement Officer may identify other procurement processes for use by public bodies;
  • The Chief Procurement Officer may also identify a preferred approach for use by all or select public bodies for specific commodities, thresholds, or both.

Change Orders and Extensions:

  • Thresholds set at 10 per cent of the original contract value or $15,000, whichever is greater;
  • Change orders or aggregate value of change orders in excess of the threshold, or a change order with a value equal to or greater than $1,000,000 shall be reported to the Chief Procurement Officer. Previously, reports were not centrally collected;
  • Provision of information in required form to ensure compliance with framework.

Reporting Requirements:

  • Transitional reporting requirements while the new electronic notification system is being developed;
  • Public bodies will provide the Chief Procurement Officer with award information respecting open calls for bids and exceptions within 15 days, and the information will be made publicly available;
  • Most reporting intended for the electronic notification system can be achieved through the existing Government Purchasing Agency website, with the exception of 30(d) which will come into force on April 1, 2019, by which time a new electronic notification system is to be built.

2018 02 22                              3:30 p.m.