Breaking News

Council adds local preference clause to procurement policy

Masha Scheele
Local Journalism Initiative

Council approved an amended procurement policy that includes a section to express the Town’s commitment to consider local vendors for procurement.

Other changes were made in several sections and were discussed by council during the standing committee meeting on July 7.

The amended policy states that no local preference will be considered for purchases of goods and services above $75,000 and for construction above $200,000, as mandated by the trade agreements that the Town must adhere to.

Coun. Dewly Nelson brought up the fact at the July 7 meeting that local businesses or contractors regularly get tenders from the town and he asked if the policy could include a preference where economically feasible for locally procured goods and services.

“One of the concepts is to get best value, and ultimately if the spend is local it will bring more value to the community as far as dollars stand, employment, and all those things,” he said.

The town’s intern, Mir Faiaz, explained that while some municipalities have given preference to local vendors within the minimal threshold, it is not legal to give any preference for local vendors above $75,000 for goods and services and above $200,000 for construction as per the trade agreements the Town is part of.

“For lower thresholds we can have explicit local preference, however that is not the best practice as most municipalities I looked into in Alberta don’t have that explicitly in their policy. Some do,” he said.

Faiaz said other municipalities normally include a local preference will be maintained under the threshold to avoid legal battles.

Coun. Trevor Haas questioned if this preference will scare away contractors and handcuff the Town to local vendors. 

Fox warned that other factors besides being local should be considered when it comes to best value to avoid personnel, customer service, or quality issues.

A best value concept was added to the new policy, which refers to a combination of several factors related to the overall transaction and the long-term benefit or advantage to the Town, including the local preference.

The addition of the green procurement to the policy communicates the Town’s commitment to sustainability, ensuring the Town will procure goods or services that are environmentally preferred.

Following the standard practice across municipalities, an emergency situation clause was added to the policy that states purchases may be made without prior approval in an emergency situation under the authority of the CAO.

An emergency is defined as an event when the lack of immediate action to supply would disrupt critical services to the public or involve the safety of personnel.

Administration explained that it is the CAO’s job to inform council and approve the expenditure. 

If council doesn’t approve the expenditure amount, administration would have to find a reduction in operating.

Nelson stated he wasn’t comfortable with how the definition of emergencies is managed and felt more accountability is needed.

He brought up that the emergency expenditure fund was used for training aids for the fire department, which would no longer be an emergency.

“If council disagrees with how the definition of emergencies was applied in that case, they can direct the CAO to find money in the operating budget to offset that expenditure. That would mean a reduction in a different line item or a reduction in a different project moving forward,” Olsen said.

Other amendments were made, including to the Procurement Process and Procurement Authority sections, and the Procurement thresholds for tendering to meet trade agreement requirements. 

The new policy also complies with the new requirements of Canada’s Public Sector Accounting Standards.

CAO Emily Olsen clarified that any projects that have not been initiated will fall under the new procuring policy, while everything that has been initiated will continue under the previous policy.