September 17, 2012
Municipal procurement includes mixed objectives
Procurement Perspectives | Stephen Bauld
Government purchasing requires a municipal policy to specify the goals to be achieved by using each type of procurement process.
The wording of some municipal bylaws in itself often suggests some confusion on the part of council as to whether the municipality is there for the advancement of the interests of its residents or its suppliers.
For instance, Section 1 of the Regional Municipality of Niagara Purchasing Bylaw No. 56-2009 sets out 12 purposes, goals and objectives that are to underline the execution of the purchasing function for that region. The bias in the list of such purposes towards being fair to suppliers (as opposed to driving a hard deal for the benefit of taxpayers) is self-evident. The bylaw states that its “purposes, goals and objectives and of each of the methods of purchasing authorized herein” are:
to encourage competitive bidding;
to ensure objectivity and integrity in the purchasing process;
to ensure fairness between bidders;
to maximize savings for taxpayers;
to offer a variety of purchasing methods, and to use the most appropriate method depending on the circumstances of the acquisition;
to the extent possible, to ensure openness, accountability and transparency while protecting the best interests of the corporation and the taxpayers of the Regional Municipality of Niagara;
to obtain the best value for the corporation when procuring Goods and Services.
Thus on a list of seven items, “savings for taxpayers” ranks fourth in priority.
What the bylaw is saying is that it is more important for procurement to be carried out in a manner that is competitive and which is fair to bidders, than it is for it to be carried out in a manner that saves money.
In a sense, this is shocking. It is contrary to virtually every principle of corporate governance for the staff of a corporate entity to be told to place more or the same emphasis on defending the rights of others as they are told to place on defending the rights and interests of their employers.
On this point, it is worthwhile to refer again to the general duty of corporate staff, as set down in section 134 of the Business Corporations Act:
“134(1) Every director and officer of a corporation in exercising his or her powers and discharging his or her duties to the corporation shall act honestly and in good faith with a view to the best interest of the corporation; and exercise the care, diligence and skill that a reasonable prudent person would exercise in comparable circumstances.”
I suggest this is the same standard as should guide both councillors and municipal staff.
They are there to represent and to further the interests of the municipality as a collective entity. They are not there to represent or assist local business, local workers, the ward or other bailiwick by which they were elected or in which they reside, or any other person, entity, special interest group or cause of the moment, save and except that they do so in a manner consistent with these fundamental duties to the municipal corporation for which they serve.
It is particularly critical that the exclusivity of staff and council responsibilities be made both express and manifest in relation to the purchasing function.
Bylaws that put the interests of suppliers on par with or ahead of the interests of the municipality appear to be inconsistent with section 2 and 8 of the Municipal Act, 2001, which indicate that the purpose of municipal purchasing policies and procedures is or ought to be to get the best deal possible for the municipality, taking into account the need to formalize purchasing procedures in order to mitigate the risk of employee misconduct.
Stephen Bauld, Canada's leading expert on government procurement, is president and CEO of Purchasing Consultants International Inc. He is also the co-author of the Municipal Procurement Handbook, published by LexisNexis Canada. He can be reached at firstname.lastname@example.org.
|MOST POPULAR STORIES|
|TODAY’S TOP CONSTRUCTION PROJECTS|
These projects have been selected from 316 projects with a total value of $2,787,806,637 that Reed Construction Data Building Reports reported on Friday.
$1,000,000,000 Edmonton AB Prebid
$220,000,000 Medicine Hat AB Negotiated
$50,000,000 Calgary AB Prebid
- Construction Site Arson
- Industry reacts to surprise B.C. Liberal majority
- Journal of Commerce Update for the week of May 20th, 2013
- Calgary Airport Tunnel
- Worker at centre of union sign up allegations speaks out
- Calgary program aims to get more people into the trades
- Midrise in the City
- Veterans battle barriers into the trades
- Government makes changes to online tendering
- SNC-Lavalin maintains that new bribery allegations have been resolved
- B.C. faces a tough battle for top talent
- Keyano College building state of the art training facility
- Essential skills can play a vital role in an apprentices' success
- Taking a closer look at the risks in green building for contractors
- Colleges conduct construction research in addition to teaching
- Skills Canada BC Competition
- Lower Mainland high school trades program is unique
- Construction Learning Forum aims to educate
- High schools looking for more industry participation
- Industrial construction supervisor program takes off
- Saskatchewan bill passed
- Edmonton garners support for regional cash for arena
- Feds pledge $5 million for Vimy memorial
- VIDEO: Competing in the trades
- Provinces need to loosen up apprenticeship rules
- Way Up on Westwood
- Building Up On Bayview
- Barrie Construction Association rolls with motorcycle ride for cancer
- Vimy Ridge memorial gets new visitor centre
- Minnesota Vikings unveil new multi-use stadium plan
- Proposed Ambassador Bridge twinning draws Windsor mayor’s ire
- Construction on pedestrian tunnel to Billy Bishop Airport continues to make progress
|ALEX’S ECONOMICS BLOG|
Reed Construction Data Canada’s Chief Economist Alex Carrick discusses current developments in the North American economic environment with emphasis on the construction industry.
- An Overview of Prices and Sales in the Diverging U.S. and Canadian Housing Markets (April 25, 2013)
- Canada’s Precarious Dependence on the Commodity Price Super-Cycle (April 22, 2013)
- Twenty major upcoming residential and transportation terminal construction projects - April 2013 (April 15, 2013)