eCaseNote 2016 No. 04

A New Public Procurement Act in Newfoundland and Labrador

The Government of Newfoundland and Labrador recently introduced An Act Respecting Procurement by Public Bodies (the “Act”) that replaces the Government’s previous legislation governing purchases by public bodies, the Public Tender Act.1 The previous Act is decades old and has not been substantially amended since it was enacted. Public tendering governs the acquisition of goods, services, public works and leasing of space by government-funded bodies in the Province. It covers government departments, municipalities, health boards, school boards, academic institutions and crown corporations.

While the Act passed third reading in the House of Assembly on November 29, 2016, it is not yet known when it will come into force. Additionally, the regulations, which will provide a lot of detail on how the Act will be implemented, are not yet released. In the interim, the following are some of the key aspects of the new legislation:

Enhanced Oversight & Standardized Procedures. The previous Government Purchasing Agency is renamed to the Public Procurement Agency. The new Act strengthens the role of the Agency in providing oversight over procurement by all public bodies. The new Act also creates the new position of Chief Procurement Officer. The Chief, appointed by Cabinet, is tasked with maintaining effective oversight of all procurement activities; developing standardized procurement procedures; establishing an electronic notification system where public bodies will post tender award information; and establishing effective supplier complaint procedures. This last mentioned task will allow an unsuccessful bidder to have a meeting with the public body and obtain reasons why its bid was not successful. The new Act also creates a Procurement Advisory Council which will provide advice and recommendations to the Minister of Service Newfoundland and Labrador regarding procurement practices and how the purpose of this new Act w ill be achieved.

Best Value. The previous Act’s focus was on the “preferred bidder” meaning the lowest qualified bid. The new Act shows a change in focus to that of “best value”. This change will allow public bodies to balance cost, quality and performance in their decision to award a tender.

Professional Services Included. Under the previous legislation, legal, engineering, architectural, accounting, land surveying, banking, insurance and other professional services were not included. In the new Act, professional services are defined as including legal services and financial services, which will be subject to a Treasury Board policy. Other services, such as engineering and architectural services, are treated like other regular services. The practice of public bodies procuring professional services is also subject to review by the Chief Procurement Officer.

Greater Flexibility. Upon introduction of the new bill, the Government indicated that one of the intentions of the new legislation is to provide greater flexibility to help public bodies purchase what they need. The approach under the previous legislation required the public body to invite tenders where they wished to acquire goods or services. The new Act more broadly states that a public body shall ensure that procurement is conducted in accordance with the framework set out in the Act. The Government has signaled its intent to make regulations respecting alternative procurement approaches, which may include such approaches as requests for proposals or expressions of interest.

One of the other concerns that the Government appears to be addressing with the legislative changes is that public bodies have found that the monetary thresholds for the requirement to have an open call for bids were too low. That is, for example, that a tender had to be issued where a public body wished to acquire goods or services unless the amount was below $10,000.00. This increases ‘red tape’ and can prevent public bodies from being able to buy locally. The regulations will provide the Government with the opportunity to increase the monetary thresholds where an open call for bids is required.

1Public Tender Act RSNL 1990 C P-45

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