As the GNWT reviews its procurement policy for awarding government contracts, it will have seven recommendations to ponder from the NWT and Nunavut Construction Association.
Those proposals include better monitoring, enforcement and application of the Business Incentive Policy (BIP); excluding non-resident, grandfathered companies as NWT businesses; increasing the impact of the BIP; improving communication on GNWT construction projects; adopting industry standard construction contract language; raising safety standards on GNWT construction projects; and creating an Indigenous procurement policy, similar to what exists in Nunavut and Yukon.
In addition, construction companies across the territory are still confronting some of the same longstanding issues that have dogged them for years, according to Matt Belliveau, the associations’ executive director.
Finding skilled workers and local people who can fill various roles remain chief among the barriers within the Northern construction industry, he said.
Pre-trades courses that members of the industry are offering alongside territorial governments, Indigenous organizations and other partners are aiming to address that need by informing residents of the career choices available, said Belliveau.
In the legislative assembly on Feb. 26, Hay River South MLA Rocky Simpson sought assurances from Finance Minister Caroline Wawzonek that Northern businesses will be given preference and “every opportunity” to participate in projects during the 2021 construction season.
Wawzonek said the existing Business Incentive Policy will govern all businesses for this season.
“To the extent that we want to improve and change those processes, we did accelerate the procurement review. That is underway, and one of the very questions we are looking at is whether there are new, additional, different ways to better support those businesses,” the minister said, while acknowledging that any improvements to the existing procurement policy will not be in time for construction projects underway this spring and summer.
Simpson followed by asking whether the GNWT can set aside and negotiate any specific projects with Indigenous governments.
Wawzonek pointed to a memorandum of understanding reached with the Tlicho Government that enhances the procurement process on Tlicho lands. She said discussions are underway with other Indigenous governments who are seeking similar terms.
“At present, the tools still are what the tools still are,” she said. “We are, however, again in the course of the procurement review asking that very question: should there be a different way of having procurement done for Indigenous governments in the territory? Again, I am happy to have the questions asked, and I hope that in this process we will be able to identify if there is a better way of doing business.”
Simpson then wanted to know whether territorial government contracts can be broken into smaller parts to accommodate smaller businesses.
The minister responded in the affirmative, saying that the “that exact conversation of how to do it, how to best serve the businesses, that is a conversation that is happening. It is going to continue to happen, and Procurement Shared Services will very happily then enact whatever those decisions are. The short answer is yes, but that is the long answer of how.”
On March 23, the territorial government announced that it will require a formal tender process for goods and services valued at $10,000 and higher, down from $25,000 and up in the past. The new threshold is in effect from April 1 to July 31.
$500 million capital budget
Giving a sense of how much is at stake overall, Wawzonek noted that the GNWT’s 2021-22 capital budget exceeds $500 million. That’s on top of $293 million allocated during the past fiscal year.
“There were some challenges last year, no doubt, with Covid and some of the challenges that would have imposed in terms of supply, in terms of exemptions for people moving in and around the territory,” she said. “The capital budget we have now is significant. All departments are very conscious of the fact that, number one, we need our infrastructure to grow and, number two, we want to support Northern businesses. With a large budget on the way and this spring season certainly coming down the pipeline, I am confident that we will be seeing increases in spending in terms of our procurement and our capital over the next few months.”
The pandemic made 2020 and early 2021 an uphill battle for many, Belliveau agreed.
“It’s been a challenging year,” he said. “That can really depend on the nature of a given company’s operations, how they’ve been impacted by Covid.”
The GNWT procurement review, which was announced on Jan. 27, is expected to be a four-month process. An independent panel – comprising Leslie Anderson, Peter Vician and Darrell Beaulieu – is at the forefront of the assessment, which has involved public consultations and engagement with industry and multiple levels of government.
The last time the government’s procurement process was updated was 2010.
NWT and Nunavut Construction Association recommendations on GNWT procurement
-Consistently monitor and enforce the existing provisions of the Business Incentive Policy (BIP), clarify penalties for non-compliance, and stop applying the policy to fly-in labour expenses on construction projects.
-Remove BIP exemptions for schedule 3 (non-resident, grandfathered) companies, and draft a new definition for NWT business that recognizes the different ways businesses contribute to the NWT economy.
-Apply BIP bid adjustments to the full value of GNWT contracts.
-Provide certainty to NWT businesses through improved communication on GNWT construction projects.
-Adopt industry standard contract language used by CCDC (Canadian Construction Documents Committee) to ensure that on GNWT construction projects, the party best able to manage any particular risk will be the one to bear it.
-Use GNWT procurement policy to incentivize the adoption of recognized safety programs across the construction industry.
-Develop an Indigenous procurement policy in consultation with Indigenous and Northern businesses.
Source: NWT and Nunavut Construction Association