The GNWT will reduce the threshold on requiring a formal tender process in procurement to $10,000 from $25,000 for general goods and services starting April 1.
The short-term procurement policy change will stay in effect until July 31, 2021, the GNWT stated in a news release on March 23.
All GNWT purchasing above $10,000 will now go through the formal public procurement process. Government departments or employees seeking goods and services estimated to be $10,000 and over will use a public competitive procurement request such as a request for proposals (RFP), or a tender.
Purchases under $10,000 will continue to follow the order for purchasing, with local Business Incentive Policy (BIP) registered businesses getting first priority; NWT, BIP registered business receiving second priority; local businesses, third; NWT businesses, fourth priority; and non-NWT based businesses getting fifth priority.
The process and limits for professional, architectural and engineering services will remain unchanged, however.
Response to business feedback
The revision comes in response to feedback from the business community and from business development staff in NWT communities.
It is also in line with mandate commitments of the 19th Legislative Assembly to ensure government procurement and contracting maximizes benefits to residents and businesses.
“GNWT procurement is a significant contributor to the NWT’s economy and to businesses all across our territory,” said Finance Minister Caroline Wawzonek. “This change to the GNWT’s procurement process is being enacted to ensure that more Northern businesses feel they have a fair and equal opportunity to compete for GNWT contracts.”
This change will be assessed, along with other existing procurement policies, as part of the GNWT procurement and contracting review.
Roots out ‘gaming of system’
Great Slave MLA Katrina Nokleby, who supports the procurement change, said it could counteract what she calls “gaming the system” that has occurred in tender processes.
“It’s my understanding when there is a sole-source tender you have to get two quotes. You’re allowed to pick the lowest one. You’ll have regional centres where someone has a buddy, and (the government will) go to one in the region and one in Yellowknife. The Yellowknife quote comes back higher, so they can say they gave it to the lowest bidder.
“I do believe there is some movement now that can stop that gaming of the system,” said Nokleby.
With the four-month window of the change, Nokleby thinks the government might draw it out longer if it’s found to be effective.
“It does make me think this is a bit of a short-term solution to something that could get out of control,” she said.
The only drawback she sees in the policy change is that it could create more paperwork and administrative burdens in the procurement process.
Jenni Bruce, president of the NWT Chamber of Commerce, also supports the policy change.
“(It) seems to align with feedback that we have heard from businesses during the procurement review process and we are happy to see it,” she said.
The GNWT launched the procurement review on Jan. 27 with the announcement of an independent panel.