Procurement Practices Reviews

"We're hoping that the recommendations we make will be used by all departments. Even by those we didn't specifically look at."
– Shahid Minto, Procurement Ombudsman

Selection of Reviews

Our Procurement Practices Review team uses a systematic, evidence-based approach to carry out independent, objective reviews of federal government procurement practices, including the application of procurement policies and the processes, tools and activities related to the acquisition of goods and services.

Reviews are different from audits, but some of the concepts are applicable to both, such as detailed examination of individual procurement files. Practice reviews examine past events, as well as past and current practices but also look at trends and forecasts. Reviews are more proactive than audits. Reviews are results-based as opposed to compliance-based. They identify areas for improvement, as well as good initiatives and best practices, while audits generally focus on deficiencies, causes and impacts.

Selecting the topics for review is a complex task. It starts with an environmental scanning exercise performed by the Quality Assurance and Risk Management (QARM) team (detailed information on this exercise can be found in its section of the Annual Report). The results of the environmental scan and subsequent impact analysis formed the basis of the practices review annual plan.

We also consulted with government officials of central agencies (including the Office of the Auditor General and the Office of the Comptroller General) as well as other government departments to discuss and take into consideration their audit and review plans, and procurement-related initiatives. This exercise aims at reducing duplication of effort. It also complements the environmental scan by obtaining information on any concerns these organizations may have related to federal procurement.

Finally, we examined some pragmatic factors such as the availability and experience of internal and external resources, our ability to complete reviews in a timely fashion and the complexity of possible review topics.

Although most topics for procurement practices reviews are selected further to the environmental scanning process conducted by the QARM team, some may also be initiated during the course of the year based on facts or emerging issues and concerns that were not known at the time of the yearly planning exercise.

During 2009-2010, we conducted reviews in six important areas:

1. Construction Contract Amendments
2. Departmental Verification of Suppliers' Records to Validate Contract Payments
3. Procurement Strategies (Bid Evaluation and Selection Methods)
4. Environment Canada – Review of Procurement Practices Related to Management Consulting and Other Professional Services
5. Methods of Supply (Standing Offers and Supply Arrangements)*
6. A Management Approach to Vendor Performance*

The last two procurement practices reviews, identified with an asterisk, were conducted as studies. Our studies aim to stimulate discussions; ensure that the procurement community has a balanced understanding of the interests and concerns of government, suppliers and parliamentarians; explore trends and developments; identify criteria for use in future practice reviews; and publicize best practices with the aim of strengthening the federal government procurement process by improving fairness, openness and transparency. For these reasons, studies do not involve detailed examination of individual procurement files and follow a process that is more fluid, similar to a research project.

This section presents summaries of all of these reviews, including studies. The detailed reports from the reviews will be posted on our Web site.

Correction to the OPO 2008-2009 Procurement Practices Review

Also, included at the end of this section is a correction to the OPO 2008-2009 Procurement Practices Review on Advance Contract Award Notices – Chapter 3.

Subsequent to the publication of the 2008-2009 Annual Report, it was brought to our attention that the value of government-wide Advance Contract Award Notices (ACAN) contracting activities included in our report may have been materially understated. The report stated, "During the three-year period from January 2005 to December 2007, the ACAN process was used for approximately $1.7 billion, or 4.3% of the total dollar value of government contracts over $25,000…." Our data had been taken from the annual Treasury Board (TB) Purchasing Activity Reports, which were based upon data submitted by PWGSC.

A PWGSC investigation and review of its ACAN reporting data from 2005 to 2007 found that a total of four ACAN contracts worth $869,494,763 had not been included in the data submitted by PWGSC to TB.

The net effect of these omissions is that the originally reported amount of $1,680,869,000 was understated by 34% and should have been $2,550,364,000 for the 2005-2007 period.

PWGSC has assured us that the omission was caused by human error and that it takes the quality of its data seriously. It indicated to us that its review of the data arising from this incident has been most useful to the department in identifying areas of risk and providing the opportunity to focus on a course of action to address the gaps.

We reviewed the departmental investigation and concluded that the omission was not deliberate but was caused by a combination of human error and the failure of the department's internal controls to detect and correct the error in a timely manner.

While reviewing the above issue, we also noticed two errors in our Table 2: the total number of government-wide contracts and the total dollar value of contracts issued for the year 2007 were added incorrectly. We presented these two totals in Table 2 to provide contextual global figures on the total government contract activity, and thus these two errors were not material to the Procurement Practices Review messages relating to ACANs.

The correct figures (after correction of the foregoing errors) are shown in the revised table.

Looking Ahead

For the upcoming year, we will continue to refine our annual planning and operational process based on lessons learned and feedback received from departments and agencies.

In addition to conducting practice reviews on selected topics, we will follow up on the extent to which departments and agencies have implemented the recommendations of the Office's 2008-2009 procurement practices reviews of the following:

• Procurement Challenge and Oversight Function
• Supplier Debriefings
• Advance Contract Award Notices
• Mandatory Standing Offers
• CORCAN Procurement Allegations

We will also finalize another study, which we started in the current year. The purpose of this study will be to contribute to improving the fairness, openness and transparency of the procurement process by drawing attention to the risks associated with contracts below $25,000 where bids do not have to be solicited. We expect this study to be completed in early summer 2010 and posted on our Web site as soon as it is ready.

The Office's procurement practices reviews draw from the information and experience gathered from our other lines of business. The PPR team shares the Office's commitment to support the government procurement function in "doing the right" thing rather than just meeting minimum requirements for compliance purposes. While rigorously maintaining our independence and objectivity, we remain committed to producing reviews and studies that do not create further administrative burden, but rather become part of the solution for both suppliers and government.

This section presents summaries of the six Procurement Pratices Reviews conducted in 2009-2010. The detailed reports will be posted on our Web site.

Construction Contract Amendments

Executive Summary

1.1 The Office of the Procurement Ombudsman (OPO) reviewed the practices of some federal departments and agencies in the management of amendments to construction contracts. The OPO believes that it was important to review this area given the government's intention to inject billions of dollars into the Canadian economy, through stimulus spending on infrastructure. A considerable amount of this spending will be for federal construction projects. Treasury Board had previously increased construction contract delegations of some departments and agencies for specific programs and real property renewal projects. The OPO wanted to find out if there were adequate management frameworks in place to allow for effective management of these increased delegations by looking specifically at the management of construction contract amendments.

1.2 The construction industry has a long history of co-operation with the Government of Canada; the industry has had a voice in the development of the government's policies and procedures for contracting and managing construction services. Construction industry practices are generally conservative, a trend solidified by a large number of construction-related court cases. Consequently, the industry expects that federal government construction contracts will be managed in a consistent manner. Consistent practices are thought to support fairness, access for interested and qualified suppliers, and openness in procurement.

1.3 Until recently, Public Works and Government Services Canada (PWGSC) was the principal purchaser of construction services for the federal Government's departments and agencies. The other departments and agencies had limited or no responsibility for construction contracts. The necessity to renew real property assets changed that, and other organizations have been given increased responsibility for managing construction contracts and contract amendments. Recent programs such as the twinning of the Trans-Canada Highway through Banff, the renewal of national historic and visitor facilities, the Small Craft Harbours Program and other recapitalization activities have resulted in a significant increase in contracting and contract management in departments and agencies that previously carried out little or no construction contracting.

1.4 PWGSC was a participant in our review because it is the major player in the construction and management of real property for the Government of Canada. PWGSC annually awards approximately $700 million in construction contracts and manages 1,800 new construction contracts of one kind or another. PWGSC's management framework for construction contract amendments, which included their policies, procedures, guidelines and practices, served as a basis against which we compared selected departments and agencies. The departments and agencies reviewed were the Parks Canada Agency, Atlantic Service Centre; Royal Canadian Mounted Police, Atlantic Region; and Department of Fisheries and Oceans, Newfoundland and Labrador Region.

1.5 The OPO found that PWGSC has identified the risks associated with construction contract amendments and has developed detailed procedures, tools and training programs to manage these risks. Contract amendments are made with the same care as new contracts. PWGSC contract officers are required to maintain a complete file, or audit trail, which justifies the reason a construction contract amendment is required and demonstrates that the price is fair and reasonable. The contract officers are expected to follow this management framework, a framework that is designed to promote fairness, openness and transparency, and protect the public purse while complying with government-wide rules for contract amendments.

1.6 The RCMP has developed a number of detailed policies and procedures related to construction project delivery and property management. But there are limited policies, procedures or guidance on how to handle construction contract amendments. The Department of Fisheries and Ocean's policies and procedures on construction contract amendments are inadequate. Their procedures manual says that the project officer is to inform the departmental Contract Services of the need for an amendment; Contract Services is to issue the amendment; and the contract officer is to complete a contract file checklist. Our file review revealed that the required documentation was seldomly completed for amendments.

1.7 As renewal and stimulus funding flows to government departments and agencies, the OPO recommends that other departments and agencies consider adopting and adapting PWGSC's management framework for construction contract amendments. The OPO found that the Parks Canada Agency is taking this approach. Its policies and procedures are in the draft stage but are being tested in the field.

1.8 DFO and the RCMP reported that it is challenging to find the human resources necessary to effectively manage the increasing numbers of contracts. The Parks Canada Agency recognized that contracting for construction requires specialized skills and knowledge, and the Agency is recruiting staff with experience in the construction industry.

1.9 To build public trust, the government must demonstrate that procurement is well managed and that public funds are spent appropriately. In conducting its review, the OPO expected to see contract amendment files with full and complete records that revealed the decision-making processes. The OPO expected to find the following documentation for construction contract amendments on each file:

• A clear description of the change requirements;
• A justification or rationale for the change;
• Quotes from the contractor;
• Confirmation that the price quote received from the contractor was fair and reasonable;
• Confirmation that the change was within the scope of the contract;
• Identification of the type of change – e.g. an unknown site condition, an error or omission, a design change; and
• Signed copies of contract amendments that have been issued to the contractor.

1.10 With the exception of PWGSC, many files in the selected departments and agencies were incomplete and critical information was missing. It was often not evident from the file that a signed contract amendment had been sent to the contractor or that there had been a mutual understanding between the contractor and the government over the requirements of the contract amendment.

1.11 Our review indicates that the framework for management of construction contract amendments is not well developed outside PWGSC. In addition we found considerable variability in the management of these amendments. The OPO concluded that other departments and agencies would benefit by adopting the PWGSC policies and procedures for construction contract amendments and adjusting them to fit within their own environment and risk factors. Other departments can learn from PWGSC, the department with expertise, experience and a good relationship with the construction industry. The OPO believes that fairness, openness and transparency in procurement would be promoted by the adoption of this management framework.

All departments and agencies involved in this review were given an opportunity to review this report and their comments were taken into consideration when it was finalized.

The detailed report is available on our Web site under Reports and Publications.

Departmental Verification of Suppliers' Records to Validate Contract Payments

Executive Summary

2.1 The Government of Canada buys goods and services from many different suppliers through contracts worth about $14 billion a year. Like any household, the government incurs bills that must be paid. Before paying bills, Canadian taxpayers look at the invoices they have been sent to make sure they are accurate and fair. The Government of Canada does the same thing, but the government's purchases are large and complex and many departments may be involved.

2.2 While the government is committed to procurement that is fair, open and transparent, there are a number of risks it has to manage. The use of audit, inspection and examination of supplier records upholds the principles by demonstrating the price being paid is fair and reasonable. This is true, especially in cases of high-risk contracts such as large cost-reimbursable contracts where the price is not determined until after the work is done and the amount to be paid under the contract can vary with a number of factors.

2.3 The Financial Administration Act (FAA), legislated by Parliament, sets out the procedures the Government of Canada is expected to follow in managing taxpayers' money. Before a payment is made, the FAA says that the government's program managers must make sure that work specified in contracts has actually been done, that goods or services have been received and that the amount charged agrees with the price written in the contract. If the contract does not state a firm price, program managers are expected to see that the amount invoiced is reasonable before a payment is approved. If an error occurs in the process and a supplier is paid more than the amount that was due, the FAA requires that the overpayment be collected and the money returned to the government.

2.4 The government processes millions of invoices a year, and there is a risk of making an incorrect payment if an invoice was prepared or paid incorrectly. The government recognizes these risks and has developed mitigating strategies. One of the ways it manages the risk of incorrect payment, and the need to later recover overpayments, is to incorporate audit provisions – referred to in this report as the "audit provision" – in contracts. Of the tens of thousands of contracts that the Government of Canada issues every year, most provide for the examination, inspection or audit of the suppliers' books and records. The government can and does include an audit provision in its contracts to the effect that the government has the right to conduct reviews, inspections and audits and recover overpayments or payments made in error. Included in the terms of the contract, suppliers are required to keep detailed documentation, such as time sheets or contracts with subcontractors, for six years.

2.5 These audits provide assurance that the contracts do not contain a material amount of loss to the Crown due to excessive profits or inaccurate or unreasonable costing practices; deter contractors from initiating unacceptable practices by maintaining a sufficient level of audit presence; and provide quality control information on the acquisitions process, including contract management. The risk of excess charges could be mitigated by the undertaking of cost audits, as appropriate, which is authorized in clear audit provisions of the terms and conditions of contracts.

2.6 This year, the Office of the Procurement Ombudsman (OPO) reviewed whether government procurement managers are effectively using departmental verification of suppliers' records to ensure correct contract payments as a means to maintaining fairness, openness and transparency in the procurement of goods and services. The period of review was from April 1, 2007, to January 5, 2010. This review looked at eight departments and agencies chosen for their size and their contracting activity: Public Works and Government Services Canada (PWGSC), National Defence, Foreign Affairs and International Trade, Agriculture and Agri-Food Canada, Canadian Heritage, the National Research Council of Canada, the Public Service Commission and the Canadian Nuclear Safety Commission. The review looked at whether these eight organizations included the right to audit, inspect or examine suppliers' records in their contracts and whether they actually undertook any of these activities. The review also looked at a type of contract used by the Government of Canada in special circumstances called a "cost-reimbursable contract." Audit provisions are particularly important in "cost-reimbursable" contracts.

2.7 Cost-reimbursable contracts are considered high-risk contracts because the specific price to be paid to the supplier is not known at the time the contract is signed. The amount to be paid must be calculated based on a number of factors such as the actual costs of materials, parts or subcontract work; the number of hours of labour at a fixed rate; or a volume or demand that will vary with time. Typical cost-reimbursable contracts would be for professional services at a per-hour rate or for the repair and overhaul of defence materiel, such as fixed wing aircraft or helicopters. In the latter case, the rate per hour for scheduled maintenance can be determined when the contract is signed, but the actual amount of required maintenance will depend on flying time. Some contracts specify a maximum profit percentage. These contracts may be "sole-sourced," that is, they may not go to competitive bidding. In the example of the maintenance of a specific aircraft such as the F-18 fighter, only the suppliers with proprietary rights and specialized expertise are qualified for the work and the contract may be in force for the many years of the life of the aircraft, with periodic amendments. PWGSC is the contracting authority for the majority of such cost-reimbursable contracts for itself and other government departments such as National Defence. According to PWGSC figures, there are over 4,000 such contracts awarded each year with an estimated annual dollar value of $5 billion.

2.8 The Office of the Procurement Ombudsman's review focussed on two areas. In the first, the eight departments and agencies were contacted and questioned on their use of the audit provision. Secondly, the Office reviewed how PWGSC exercised the audit provision in cost-reimbursable contracts. The review looked at the use of audit provisions in these cost-reimbursable contracts because they often involve large amounts of money, they are often sole-sourced under one of the allowable exceptions, and the amounts payable are based on suppliers' calculations of cost or profit. Because of the large amounts involved, if overpayments were to occur, these overpayments could involve millions of dollars. In addition, as a number of these contracts are for military procurement, the program is important to the Department of National Defence (DND) and is of interest to the U.S. military, which shares with Canada many of the same suppliers.

2.9 All eight of the organizations reviewed used a standard audit provision in the contracts where they were the contracting authority. PWGSC included the audit provision in nearly all of its own contracts and in contracts it issued on behalf of other departments. In the eight organizations examined in the first part of the review, the Office found that audit provisions were used like an "insurance" policy. The existence of an audit provision may have a deterrent effect and helps to prevent overcharging the government in the first place, but it will not be effective unless suppliers know that there is a chance of the clause being actually invoked. This clause also authorizes the recovery of overpayments or payments in error.

2.10 The eight organizations said that although all contracts included an audit provision, procurement managers had not performed any formal audits, inspections or examinations of suppliers' records during the period under review. The organizations had not issued specific guidance on how this control should be used. They had not formally considered how conducting a certain number of audits, inspections or examinations would reinforce the preventive value of the control. The organizations said that overpayments were prevented by other controls and procedures. For example, they said that financial officers closely scrutinized invoices and supporting documentation in the file for a given contract. In a limited number of cases, the clause had been used informally to obtain additional documentation from the suppliers.

2.11 Audits may be conducted at any time within a six-year period specified in a contract. Suppliers are required to keep detailed documentation during this period, including time sheets, contracts with their suppliers and subcontractors, and invoices from their supply chain. Suppliers appear to accept this requirement as part of doing business with the Government of Canada and the government's need for accountability to taxpayers. All eight organizations said that the audit provision is useful even if never formally used because both the government and the supplier know that an audit can be conducted. This promotes compliance with the terms of the contract. The effect is similar to the way a potential audit promotes taxpayers' compliance with the Income Tax Act.

2.12 During the period under review, PWGSC procurement officers had not formally invoked the audit provision for any contracts other than cost-reimbursable contracts. They had rarely used the audit provision even for high-value, complex contracts such as those for information technology projects. At the end of our review, PWGSC had prepared a draft internal audit report on Information and Technology Branch task authorization contracts, which deals with some of the topics raised in this review. Another internal audit completed by PWGSC of construction contracts recommended that the Department ensure that construction contracts include a more detailed audit provision in its standard terms and conditions, and that these audits be undertaken. We have been informed by officials at the Department of National Defence that internal audits conducted at National Defence have often recommended to PWGSC that it invoke the clause for specific contracts where there is believed to be a higher risk of overpayment. The Office recommends that PWGSC and other departments and agencies consider invoking the audit provision in the case of high-risk, complex contracts, as is being done for cost-reimbursable contracts.

2.13 For cost-reimbursable contracts, PWGSC has for many years employed a cost audit program. This program is used to validate that the contract payments for goods and services are appropriate and assist the contracting officer in determining a final price for such contracts. The program employs Audit Services Canada (ASC), a special operating agency within the Department, to conduct the audits. Audit Services Canada produces a report that may suggest adjustments to the price to be paid, based on its interpretation of the contract requirements. The contracting officer, who is responsible for administering the contract and recommending invoices for payment, is also involved in negotiating the final price with the supplier. PWGSC is currently undertaking to clarify the process and accountability for disposing of the cost audits' suggested adjustments.

2.14 We note that PWGSC has undertaken a renewal of this program to make it more relevant and effective. In the interim, the number of audits of cost-reimbursable contracts has decreased, and mandated or required audits for cost-reimbursable contracts have become backlogged. In a number of cases, it has taken considerable time to establish the validity of the audit adjustments, which has had a corresponding effect on recovering the appropriate amounts in a timely manner. PWGSC has recognized this problem and has recently allocated additional resources to clear the backlog.

2.15 PWGSC's Cost Audit Program (CAP) for cost-reimbursable contracts represents a good practice with clear financial benefits through the recovery of overpayments to suppliers. PWGSC is currently carrying out an action plan to renew the program and implement the many needed improvements. Implementing the improvements identified and obtaining sustainable funding are crucial to the effective survival of this important program.

2.16 PWGSC has made good progress in revising its approach to cost-reimbursable contracts. However, there are some important issues that it was continuing to address at the completion of our review. One of them is to clearly identify the roles and responsibilities of all the players in the determination of the final disposition of the "audit adjustments." This is a particularly complex matter given the multitude of players involved: DND (or other department) as the department with the program and the appropriation; PWGSC as contracting authority with the concentration of duties in the hands of the contracting officer; ASC as the cost auditor (PWGSC is the employer of record for ASC employees); and of course the affected suppliers.

2.17 The vision and direction of the renewal resonate with most stakeholders as being an improvement over the current way of operating. Key proposals being considered intend to alleviate the problems of the buildup of audit backlogs due to lack of funding and unclear selection parameters; the slow recoveries due to the timing of audits; and the use of various methods of recovery that may be unauthorized. The renewed program will use a risk model to focus discretionary audit effort, with a new risk assessment methodology that goes beyond simple dollar value. Audits will occur over the whole life of a contract, not as a post-contract activity, which will be of more value to managers approving payments under section 34 of the FAA. There will be a measure of accountability through program reporting to the Directors General Council (DG Council) under the Assistant Deputy Minister, Acquisitions Branch. To keep up with the requirement for mandatory audits and enable the Cost Audit Group (CAG) to perform discretionary audits on a risk selection basis, the renewal is working toward a multi-faceted approach to stable funding.

2.18 We were impressed with the efforts of PWGSC to strengthen the relevance, efficiency and effectiveness of its Cost Audit Program. We encourage all other government departments to review the new program framework and, where appropriate, to adapt it to their own contracting activities.

2.19 In our view, the confidence of Canadians in public procurement and the government's commitment to transparency would be strengthened by the publication of summary level results of the Cost Audit Program.

2.20 Another issue that merits further study is whether to continue the current practice of having the cost audits done exclusively by government employees or whether the program would benefit by using some of the expertise available in the private sector.

Recommendations

2.21 As part of their account verification risk mitigation strategies, departments should include a guideline as to how and when to use the audit provision for contracts that do not fall under the auspices of CAG at PWGSC and are of a cost-reimbursable nature, taking into consideration the expectations of suppliers' record keeping and the principle of openness regarding audit suppliers.

2.22 The DG Council in the Acquisitions Branch of PWGSC should monitor the implementation of the updated action plan and report progress to senior management on a frequent basis.

2.23 In order to strengthen transparency and enhance the deterrent effect of cost audits, summary level reporting of the CAP results should be prepared and made available to the public.

All departments and agencies involved in this review were given an opportunity to review this report and their comments were taken into consideration when it was finalized.

The detailed report is available on our Web site under Reports and Publications.

Procurement Strategies (Bid Evaluation and Selection Methods)

Executive Summary

3.1 Public Works and Government Services Canada (PWGSC) and other government departments utilize procurement plans that address operational needs and proposed methods of solicitation, bid evaluation and supplier selection, as well as the identification of key risks and mitigation strategies to support the effective acquisition of goods and services.

3.2 A clearly defined procurement plan provides the foundation for the effective management of decisions that take place throughout the life of the procurement. It also provides the baseline against which results can be measured and improvement plans developed. Proper procurement plans are particularly important when setting up supply arrangements (SAs) that may cover several years and are used by departments to award multiple contracts to pre-qualified suppliers.

3.3 The Treasury Board (TB) Contracting Policy establishes the framework within which contracting authorities must be exercised. The Policy states: "The objective of government procurement contracting is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people."

3.4 The Policy defines "best value" as "the combination of price, technical merit, and quality, as determined by the contracting authority prior to the bid solicitation and set out in the bid solicitation evaluation criteria, and which forms the basis of evaluation and negotiation between buyers and sellers to arrive at an acceptable basis for a purchase and sale." It further states that factors such as all relevant costs over the useful life of the acquisition should be considered.

3.5 Some suppliers have expressed concerns about the complexity and ambiguity of bid evaluation and selection methods, which led them to question the fairness, openness and transparency of the government's procurement practices. The Association of Registered Graphic Designers of Ontario (RGD Ontario) approached the Office of the Procurement Ombudsman (OPO) with concerns about competitive bid evaluation and selection methods that raise questions about the following:

• Whether bid evaluation and selection methods took into account an appropriate balance between cost and quality or other factors that add value;
• Whether the bid solicitation methods were aligned with industry capacity and conditions;
• Whether the contracts awarded met the operational needs of purchasing organizations; and
• Whether the bidding requirements were fair.

3.6 The government's 2008 Speech from the Throne emphasized that ways needed to be found to make it easier for businesses to provide products and services to the government and deliver better results for Canadians.

3.7 In 2009-2010, the OPO chose to conduct a review of the policies and practices relating to competitive procurement planning and corresponding solicitation, bid evaluation and selection methods relevant to the purchase of graphic design services (GDS). Government departments have established a number of SAs to procure graphic design services. SAs are a method of supply used to procure goods and services from a list of pre-qualified suppliers. This list is established through a competitive process that measures both quality and price. This is the first stage of bidding. In the second stage of bidding, departments meet their specific needs by issuing a subsequent call for bids to suppliers on the list. This call for bids may be made to a single supplier, a number of suppliers or all suppliers on the list, depending on the details in the SA.

3.8 The practice review focussed on three SAs. Two of these were set up by PWGSC and one by Transport Canada (TC). The objective of the review was to determine whether the three SAs for GDS were based on adequate strategies and plans to support the development of effective and efficient bid solicitation, evaluation and selection methods and to determine whether these plans and their practical implementation

• support operational needs;
• reflect best value considerations; and
• encourage both competition and quality.

3.9 The OPO selected a sample including the three SAs and 39 related files from contracting activity undertaken between June 2006 and January 2010. The sample was drawn from the contracting data in three of the departments identified as significant purchasers of GDS: Human Resources and Skills Development Canada (HRSDC), Natural Resources Canada (NRCan) and Transport Canada (TC). Public Works and Government Services Canada was the common service procurement provider for HRSDC and NRCan. We noted that the vast majority of contracts awarded under the SAs were for less than $25,000 and thus, in accordance with the Government Contracts Regulations, could have been awarded without any competition.

3.10 We reviewed policies, procedures and guidance in each department. In addition, interviews were conducted with procurement personnel, and in three departments, information was also obtained from program personnel. Practices were assessed against four criteria that support the development of an effective and efficient procurement strategy:

1. Departmental procurement policies and processes support the development of effective and efficient procurement plans and corresponding solicitation, bid evaluation and selection methods.
2. Procurement plans and practices ensure operational needs are supported and clearly defined.
3. Departmental procurement plans and practices reflect key best value considerations.
4. Departmental procurement plans and practices integrate the principles of fairness, openness and transparency, including encouraging competition and allowing innovation, while respecting the requirements of legislation, trade agreements, regulations and procurement policies.

3.11 We noted that all four departments had defined roles and responsibilities in terms of specific procurement activities. Departmental policies and procedures reflected the requirement to achieve best value as well as the principles of fairness, openness and transparency. The primary focus of their guidance was on ensuring the adequacy of statements of work and compliance with trade agreements and the Treasury Board (TB) policies. Competitive bidding was encouraged in all departments. Each department had established checklists to ensure that these key considerations were addressed.

3.12 At PWGSC, we observed requirements to obtain written confirmation of the client's agreement with the statement of work (SOW) and, for sensitive or high-risk procurements, with the evaluation and selection methodology. We believe that for such procurements where multiple organizations are involved, obtaining sign-offs is an effective means of minimizing risks of acquiring goods and services that do not meet operational needs.

3.13 In terms of the practical application of the principles of fairness, openness and transparency, PWGSC and HRSDC reminded personnel that competitive solicitation of bids for requirements valued below $25,000 should be pursued whenever it was cost-effective to do so. At TC, contracting procedures included a list of relevant considerations to assist contracting specialists in vetting the bid evaluation and selection methods to ensure that they were adequate to encourage competitive bidding.

3.14 We noted, however, that in some instances, departmental policies needed to be updated to remain in sync with changes to trade agreements and TB policies. For example, at HRSDC, the policy on intellectual property had not been updated to reflect new TB policy requirements.

3.15 Overall, the policies and guidance relating to the procurement planning of the SAs reviewed support the principles of fairness, openness and transparency; reflect the requirement to achieve best value; and allow for the development of effective and efficient procurement plans.

3.16 We reviewed the procurement planning for each of the SAs and expected to find detailed procurement plans that clearly showed the processes and procedures that would be followed by procurement personnel during the procurement. We looked to see if the decisions reflected in the plans were supported by documentary evidence of proper analysis in support of risk evaluation and the decisions made.

3.17 The review found that two of the three SAs were supported by procurement plans. PWGSC had prepared the plans for HRSDC and NRCan. We note that TC, which had issued its own SA, did not have a formal supporting procurement plan. We were informed that in that department, some planning activity was carried out by program officers and that it influenced the decisions reflected in the SA.

3.18 Both of the plans we reviewed contained high level descriptions of required services, estimated business volume, solicitation and evaluation methods, relevant trade agreements, and policies and milestones for establishing the SA. We further examined files and supporting documentation to understand the rationale and basic analysis for the bid evaluation and selection methods used for the three requests for supply arrangements (RFSAs) and the subsequent bidding processes conducted at stage 2. We found the documentation to be weak or missing in a number of areas, including identification of risks and corresponding mitigation strategies and documented analyses supporting the rationale for the use of an SA over other procurement options, for estimates of business volumes, and for the evaluation and selection methods to qualify suppliers for the SA and subsequent calls for bids.

3.19 The complexity and diversity of the bid evaluation and selection methodologies being used caused confusion for suppliers. The departments had similar requirements for GDS but used different detailed methods of evaluation and selection. For example, each of the three user departments had different thresholds and requirements for competitive bidding at stage 2. At HRSDC, competitive bidding was required for individual requirements valued in excess of $15,000. At NRCan, all purchases were to be competed. At TC, the competitive bidding threshold was set at greater than $25,000.

3.20 In addition, for the NRCan RFSA, we found the lack of clarity in the description of mandatory and rated requirements resulted in 35 questions from suppliers, creating an unnecessary level of effort on the part of departments as well as suppliers.

3.21 At TC, we noted a number of instances of confusing information contained in the solicitation document. For example, references to the basis of payment varied from "firm hourly rates" to "ceiling per diem" rates. Significant deficiencies in the methodology also prompted TC to replace all of the evaluation criteria.

3.22 In addition, we noted that RFSAs included more than 50 pages of relevant instructions, terms and conditions, including references to further clauses and general conditions that were published in on-line publications accessible to suppliers. Suppliers' comments received as part of our review raised concerns about the appropriateness of the level of effort to qualify for an SA. The majority of the suppliers who responded to our questionnaire recommended that the government standardize methods of procuring GDS. Suppliers further advised us that there is a significant level of effort and cost associated with preparing a bid in response to an RFSA. Estimated costs mentioned ranged from $2,000 to $5,000 to respond to an RFSA.

3.23 PWGSC has an initiative to develop a new method of supply for graphic, Web, and exhibit and display design services that would be available for use by all government departments and agencies. The objective of this initiative is to develop a standard method that would incorporate the results of a market analysis and the views of key stakeholders. This initiative is being led by PWGSC in cooperation with eight federal departments, the Office of Small and Medium Enterprises (OSME), the Office of Greening Government Operations and a former president of RGD Ontario. We believe PWGSC's decision to pursue a strategic commodity management approach is well considered and demonstrates leadership.

3.24 The OPO found that the requirements included in the RFSAs for GDS did ensure that the suppliers who received supply arrangements had the capacity to perform a range of graphic design services in accordance with established quality standards. The government supported quality and best value by ensuring that only suppliers with an established track record and capacity to perform the needed services were pre-qualified for the SA. For bid evaluation, the departments under review considered the suppliers' years of experience in the graphic design industry, the depth of experience, and the qualifications of its personnel and its capacity to carry out various types of graphic design work. In addition, samples of previous work were examined. These factors were individually rated and assigned points. Bidders were required to achieve an overall technical score of 75 to 85 percent. Qualified suppliers were also obligated to meet further quality requirements such as Government of Canada printing, editing and writing standards and green procurement requirements that were built into the SOWs for the SAs.

3.25 In the subsequent solicitations under the supply arrangements, the second stage of bidding, pre-qualified suppliers submitted bids for clearly defined requirements. At that stage, the financial considerations were much more important, and cost was usually the determining factor for selecting pre-qualified bidders. The quality and completeness of work was reviewed against the stated requirements. Given that most of the contracts were under $25,000, we concluded that this is a reasonable approach to obtaining best value.

3.26 Our review found that GDS were performed in accordance with the terms of the contracts, with clearly defined requirements and detailed lists of deliverables. Interviews with departmental personnel confirmed that the overall quality of the work was satisfactory. In the files reviewed, the findings indicated that operational requirements as defined were met.

3.27 Our review of the procurement of GDS confirms that the methodology used for awarding contracts is indeed heavily weighted toward quality over price. We are also supportive of the PWGSC initiative to strengthen the processes even further.

3.28 The three supply arrangements for GDS were based on adequate strategies and plans to support the development of effective and efficient bid solicitation, evaluation and selection methods. Overall, these plans and practices support operational needs, reflect best value considerations, and encourage competition and quality.

Recommendations

3.29 The OPO encourages PWGSC to include the following key areas in its development of a new method of supply for graphic, Web, and exhibit and display design services:

• Developing a streamlined standard method of supply, to the extent feasible, to purchase GDS within the government;
• Ensuring clearly defined bid evaluation and supplier selection methods; and
• Ensuring projected business volumes are supported by a proper analysis of departmental needs.

3.30 The OPO also recommends that there be adequate documentation in procurement files in support of decisions made. The level of documentation should be commensurate with the risks of the particular procurement. Ensuring that documentation is complete saves time and effort when procurement personnel respond to questions and inquiries about specific procurements. Complete documentation is a requirement of TB and PWGSC policies, and documentation is essential to prevent speculation about whether procurement is fair, open and transparent.

All departments involved in this review were given an opportunity to review this report, and their comments were taken into consideration when it was finalized.

The detailed report is available on our Web site under Reports and Publications.

Environment Canada – Review of Procurement Practices related to Management Consulting and other Professional Services

Executive Summary

4.1 In the spring of 2007, a supplier made a formal complaint to the Canadian International Trade Tribunal (CITT) alleging that Environment Canada (EC) had showed favouritism toward another company in the award of a contract. The CITT reviewed the case and recommended that EC re-evaluate the complainant's submission. The proposal was re-evaluated with the same outcome as the initial evaluation. The supplier then complained to Justice Canada. Justice Canada responded that the CITT had reviewed the case and provided a judgment.

4.2 The complainant further complained to the Information Commissioner and the Office of the Auditor General of Canada. In December 2008, the supplier brought the complaint to the Office of the Procurement Ombudsman (OPO). After some preliminary discussions, the OPO decided to carry out a review of EC's procurement practices to ensure they supported the principles of fairness, openness and transparency. The OPO and Environment Canada agreed that a review would be carried out using a collaborative approach, and EC hired an external audit firm to conduct a procurement audit.

4.3 The scope of the audit included all phases of the procurement process specific to "Management Consulting and Other Professional Services." The scope included procurement planning (e.g. requirements definition), solicitation activities and contract award, contract administration and contract close-out. It was agreed that the objectives of the review would be to:

• assess whether the allegations of favouritism were founded;
• review the procurement process specific to "Management Consulting and Other Professional Services" to determine whether Environment Canada complied with the Treasury Board Contracting Policy and the Government Contracting Regulations; and
• determine whether the procurement business function was based on sound contracting management practices and is fair, open and transparent.

4.4 OPO staff reviewed the objectives, scope and methodology of the audit and was satisfied with the work that was performed by the external audit firm.

4.5 The external auditors have completed their examination and concluded that EC has an adequate management control framework appropriate to the needs of the Department and that overall procurement activities comply with the policies of the Treasury Board, Public Works and Government Services Canada and its own department with respect to contracting for management consulting and other professional services.

4.6 The external auditors also concluded there was no evidence that EC had shown favouritism toward any firms in the proposal evaluation and contract award process during the period examined.

4.7 The audit report noted the following:

• There were six of the fifty files in the statistical sample and four of the seven files in the judgmental sample where the evaluation documentation was incomplete. As a result, the Department may be at risk of being challenged on its decisions;
• While EC does not have a contracting policy, it follows the Public Works and Government Services Canada (PWGSC) Supply Manual. According to the Supply Manual, "All notes taken during the evaluation must be kept in their original form and retained on the procurement file for audit purposes." While not mandatory for departments and agencies, this is clearly a best practice to be emulated. The Supply Manual also states that "evaluators' worksheets are an integral part of the evaluation process and constitute part of the complete record regarding the procurement and part of the written record of all communications substantially affecting the procurement within the meaning of the international trade agreements".
• As a result, in OPO's view, without properly documented forms and complete reports, EC Procurement cannot demonstrate compliance with either the Treasury Board Contracting Policy or PWGSC policy requirements relating to the documentation of files. If there are instances where decisions are not adequately documented, this may give the perception that the procurement practices in the Department are not being conducted in a fair, open and transparent manner.

4.8 The OPO has used the audit findings as the basis for this report. The OPO has also reviewed the auditor's working papers and is satisfied with the results.

4.9 The OPO concurs with the findings and the recommendations of the audit. The OPO has concerns regarding the lack of documentation in the evaluation process and in the process used to engage the co-chairs of the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) at Environment Canada.

4.10 It is recommended that the department shouldn't:

1. revise the standard instruction letter that is provided to evaluators to clearly outline what minimum standards of documentation are required. The minimum standards should also be revised on the Web site instructions, and the Director should ensure that these minimum standards are followed;
2. ensure that all amendments are properly justified and processed prior to contract expiry dates; and
3. obtain from Public Works and Government Services Canada and the Treasury Board of Canada a resolution on how to process transactions similar to those related to COSEWIC in light of legislative obligations.

Departmental Response

Environment Canada concurs with the recommendations contained in this report and the work that was performed by the independent audit firm. It will be preparing a management action plan, which will be presented to its independent External Audit Advisory Committee in June 2010.

The detailed report is available on our Web site under Reports and Publications.

Study on Methods of Supply (Standing Offers and Supply Arrangements)

Executive Summary

5.1 According to the Treasury Board Purchasing Activity Reports, in the last 10 years, the value of federal government procurement has increased by over 40%, while the number of transactions has decreased. The government, therefore, is managing a larger amount of procurement of increasing complexity. The government strives to increase its administrative efficiency, but has to balance these measures against its commitment to fairness, openness and transparency in procurement. Suppliers would benefit from the government's efforts to simplify and streamline procurement practices. It is in everyone's interest to reduce the burden of paperwork, time and effort.

5.2 There are two principal methods of supply that are used to streamline the procurement process for specific types of goods and services. Standing offers (SOs) and supply arrangements (SAs) are frameworks for procurement that are meant to:

• reduce the cost of common goods and services used on a government-wide basis and purchased on a repetitive basis;
• ensure that procurement processes are timely; and
• attain good value for taxpayers' dollars.

5.3 A standing offer (SO) is a continuous offer from a supplier to the government that allows departments and agencies to purchase goods or services, as requested, through the use of a call-up process incorporating the conditions and pricing of the standing offer. SOs are intended for use where the same goods or services are needed within government on a recurring basis and are commercially available.

5.4 With the use of SOs, suppliers that meet the evaluation criteria and selection methods are pre-qualified and issued an SO. An SO is not a contractual commitment by either the government or the supplier. When goods and services available through an SO are needed, departments issue a call-up, the supplier's acceptance of which constitutes a contract. The call-up is done relatively quickly. Departments do not conduct a competitive bid solicitation for the goods and services procured under an SO.

5.5 A supply arrangement (SA) serves a purpose similar to that of an SO. An SA is a non-binding arrangement between the government and a pre-qualified supplier that allows departments and agencies to award contracts and solicit bids from a pool of pre-qualified suppliers for specific requirements within the scope of the SA. Departments meet their specific needs by issuing another call for bids – a subsequent, second-stage solicitation – to one, some or all of the suppliers on the SA list, depending on the details in the SA.

5.6 With SOs, the terms and conditions, including price, are set as part of the bidding process. But when calls for bids under the SA are issued to listed suppliers, those suppliers have the opportunity to include changes in their bids to reflect market changes, innovation, new technology or pricing adjustments. This is beneficial to both the supplier and the government.

5.7 The major similarities and differences between an SO and an SA are described in the following table:

Table 1 is a comparison of Standing Offers and Supply arrangements divided in 2 stages

Table 1: Comparison of SOs and SAs

Standing Offer	Supply Arrangement
Stage 1
Is not a contract
Is an "offer" from a qualified supplier	Is a "non-binding arrangement"
To supply goods and/or provide services Required on a regular or recurring basis by one or more departments But actual demand is not known in advance
For standardized goods/services the requirements of which can be defined at the outset	For goods/services not fully definable at the outset
Pricing basis can be defined and established at Stage 1	Pricing basis cannot be completely defined at Stage 1 and is established only at Stage 2
In accordance with agreed terms and conditions Based on an anticipated business volume that is an approximation given in good faith And does not constitute a commitment for work
SO for specific goods/services may be issued to one or more suppliers	SA for a range of goods/services may be issued to a number of pre-qualified suppliers
Usually resulting from competitive solicitation but can be directed to one supplier for its full range of catalogue goods or services	Resulting from a competitive solicitation
Stage 2
A contract is formed when A department accepts the existing offer as outlined in the SO, usually by issuing a call-up against the SO	A contract is formed when A bid in the second-stage bid solicitation is accepted by the department or agency
No second-stage bid competition – Selection of one supplier based on allocation of work stipulated in the SO agreement, e.g. right of first refusal, proportional basis, exclusive rights	Usually competitive amongst pre-qualified suppliers but can also be directed to one supplier based on allocation of work stipulated in the SA, e.g. to a specific number of suppliers based on dollar value, rotational basis

5.8 Most SOs and SAs are put in place by Public Works and Government Services Canada (PWGSC). The department acts as a common service organization and the government's main contracting arm. In 2005, the government made a significant change in the use of SOs and SAs. It became mandatory for all departments to buy certain high volume goods and services through SOs and SAs managed by PWGSC.

5.9 The government said that these measures to streamline and consolidate procurement would ensure that the federal government better pursues opportunities to reduce the cost of its purchases, by using the size of the federal government to get the best possible price.

5.10 Conceptually, the idea has merit. In theory, these tools should reduce paperwork, speed up the procurement process and lower the cost of goods and services. As with any new initiative, it has to be subject to a quality management system, where the impact and effectiveness of the implementation is monitored and its performance assessed against anticipated results. Gaps need to be identified, decisions made and actions taken to improve the process.

5.11 To date, the emphasis has been on the design and implementation of individual SOs and SAs; the monitoring, quality assurance and corresponding adjustments regime is still under development according to the PWGSC Commodity Management Framework Plan.

5.12 Last year the Office of the Procurement Ombudsman reported that the use of mandatory SOs had an impact on small and medium enterprises in doing business with the government. There is open competition when PWGSC solicits bids to become a qualified supplier. But competition is limited after that. Unsuccessful bidders and new entrants to public procurement are essentially "out" until the existing SO is renewed or refreshed. In some cases, the outcome of a solicitation may result in fewer successful suppliers. The Office also reported that the government's evaluation and reporting systems were inadequate to measure whether the use of mandatory SOs and SAs had met the government's original objectives in mandating the use of these procurement instruments. PWGSC reports that there are a number of informal means through which Commodity Management Teams and Commodity Managers gather business intelligence for use in the decision making process.

5.13 However, a recent PWGSC Internal Audit Report found that without a coordinated departmental approach and collaboration by all stakeholders, the impact of standing offers as a beneficial method of supply remains unknown. The lack of integrated and meaningful information on standing offers, and a mechanism to share this information, means that it cannot be used to support planning, decision making and action, or demonstrate the achievement of the government's shared objective of buying smarter, faster and at a reduced cost.

5.14 This year the OPO further studied unresolved concerns about the impact of mandatory SOs and SAs. The Office examined the federal legislative, regulatory and policy framework related to SOs and SAs. We conducted interviews with departmental management and procurement personnel, as well as experts in public procurement in Canada and other jurisdictions. Finally, suppliers and a supplier association were interviewed.

5.15 Feedback from both departments and the supplier community identified advantages and concerns related to the use of mandatory SOs and SAs. The advantages, where SOs and SAs are properly designed and implemented, are presented in Table 2. There are also concerns, identified by departments and suppliers, which are listed in Table 3.

Table 2: Advantages of SOs and SAs

Table 3: Client Departments and Supplier Concerns About Mandatory SOs and SAs^{Note de bas de page 1}

5.16 The most efficient and fair procurement tool varies from one commodity to another. An SO may be an effective and efficient procurement tool for the purchase of one type of commodity, but not for the purchase of another. Generally SOs are more suitable for the purchase of goods than services.

5.17 To date, the government's monitoring and evaluation of the mandatory use of SOs and SAs have been limited, using a transactional basis rather than a strategic perspective.

5.18 The mandatory use of certain standing offers and supply arrangements five years ago was an important initiative in the government's ongoing efforts to ensure that its procurement is efficient and effective, represents value for money, and meets operational requirements and program delivery objectives. Since that time, the government has expended significant effort in the design of mandatory procurement tools and in implementing the policy decision. To date, the government has not collected reliable data that would enable it to undertake an assessment of the impact of this policy shift. We note, however, that PWGSC is refocusing the practice of commodity management to deliver more strategic procurement approaches and more standardized and simplified processes and tools.

5.19 The ongoing challenge is the need to ensure that the momentum to improve is maintained while ensuring that the balance between efficiency and suppliers' right to federal procurement opportunities is not sacrificed.

The detailed report is available on our Web site under Reports and Publications.

Study on a Management Approach to Vendor Performance

Executive Summary

6.1 In this study, the Office of the Procurement Ombudsman (OPO) examined how organizations approach vendor performance and identified best practices for sharing to assist organizations in implementing a vendor performance program.

6.2 More specifically, we studied how these organizations monitor, evaluate, apply corrective measures (if necessary) and report on whether performance objectives were met.

6.3 This subject is of interest to our stakeholders due to the significant amount of money that is spent by the federal government on procuring goods, services and construction to deliver programs to taxpayers.

6.4 Due to the volume of business that vendors do with the federal government, issues with regard to performance are bound to arise. When the government and a vendor enter into a commercial contract, both parties have legal obligations to meet its terms and conditions. Holding vendors accountable for their performance is an important tool for making sure the government receives good value from its contracts. This also fosters better communication and results in improved relationships between the government and its vendors.

6.5 Eight Canadian government organizations responsible for the procurement of goods, services and construction at the federal, provincial, and municipal levels participated in the Study. It is important to note that five of these organizations, which are not covered by our mandate, contributed on a voluntary basis.

6.6 We carried out research that included a review of academic and government literature related to vendor performance. We also interviewed officials responsible for procurement, contract management and project management at participating organizations.

6.7 We found that vendor performance management is best supported by a vendor performance program with an established framework and policy. The elements of the framework need to be aligned with corporate strategic goals and objectives, as well as risk mitigation strategies.

6.8 All organizations we interviewed have best practices that address elements of a framework for a vendor performance program. For example, they have established processes; use performance clauses in contracts; use tools and automated systems to monitor, evaluate and report performance results; follow contract file close out procedures; and can apply corrective measures on vendors for poor performance.

6.9 A good vendor performance program helps to protect Crown interests and provides transparency on what the government's expectations are. Vendors are also entitled to know the rules of engagement. If government organizations apply corrective measures by clearly communicating, in advance, evaluation criteria coupled with due process, it is more likely to be defensible in a legal action.

6.10 In addition to vendor performance being monitored on a day-to-day basis for operational needs, senior procurement review committees will greatly benefit by having vendor performance information available to assist in the mitigation of risks when making procurement strategy and contract award decisions as noted in our 2008-2009 review of the Procurement Challenge and Oversight Function. This will minimize the risk of contracting with repeat poor performers.

6.11 The Federal Acquisition Regulation governing U.S. Government procurement requires agencies to consider past vendor performance information as an evaluation factor in future contracts. Although the U.S. has a number of best practices in this regard, there are also several challenges that hinder capturing adequate performance information for government-wide sharing. As a result, the President has announced new legal requirements to strengthen the use of vendor performance information.

6.12 The key piece in any framework is a comprehensive policy. Public Works and Government Services Canada (PWGSC) – Acquisitions Branch has had a vendor performance policy in place since 1996. However, roles and responsibilities are perceived to be unclear and there are concerns about legal consequences. This contributes to corrective measures for non-performance being infrequently applied.

6.13 In 2007, an Independent Advisor to the Minister of PWGSC issued a Report on Public Opinion Research Practices of the Government of Canada. The Independent Advisor expressed concerns about the effectiveness of the government's vendor performance policy and made a number of recommendations with regard to the evaluation of vendor performance and client satisfaction. In response, PWGSC committed to updating its Vendor Performance Policy and including a performance evaluation process.

6.14 Since many years, PWGSC – Acquisitions Branch has been revisiting its policy on vendor performance. PWGSC has advised us that the outstanding policy work and related consultations with stakeholders will be completed by March 31, 2011. This is an opportunity for PWGSC to consider the best practices and lessons learned of other organizations to develop a comprehensive and well reasoned approach to vendor performance that can serve as a model for others and contribute to improving the fairness, openness and transparency of the procurement process.

The detailed report is available on our Web site under Reports and Publications.

Correction to 2008-2009 Procurement Practices Review – Advance Contract Award Notices

The following documents are amended as follows:

1. 2008-2009 Annual Report, Section 2, Getting Down to Work, Practice Reviews, Page 45, Paragraph 6
2. Procurement Practices Review – Chapter 3: Advance Contract Award Notices, Paragraph 6 of the Executive Summary and paragraph 3.11 in the body of text:

Delete:

"… for approximately $1.7 billion or 4.3% of the total dollar value of government contracts over $25,000 …"

Add:

"… for approximately $2.5 billion or 6.4% of the total dollar value of government contracts over $25,000 …"

Chapter 3: Advance Contract Award Notices, paragraph 3.20 – Table 2 is revised as follows:

The table in this page is a revision of a table that was published in last year report of a Practice Review on Advance Contract Award Notice (ACAN). It explain the ACAN and Contracting Activities (over $25k) by Departments included in the review and Government-Wide.

ACAN and Contracting Activities (over $25k) By Departments
included in this review and Government-Wide

Department	Total Contracting Activity		Total ACANs published		ACANs Published by the Department itself		ACANs Published by PWGSC on behalf of the Department
	Number	$ Value (000s)	Number	$ Value (000s)	Number	$ Value (000s)	Number	$ Value (000s)
2005
CRA	461	$241,380	80	$51,782	Data not available for 2005
DFO	1,054	$252,450	137	$15,358
DND	4,852	$7,417,570	379	$239,109
HC	975	$174,903	121	$20,984
TOTAL (4 Departments)	7,342	$8,086,303	717	$327,233
Total Government-wide	22,484	$14,780,938	1,665	$595,306
2006
CRA	335	$287,572	52	$21,144	48	$20,478	4	$666
DFO	940	$173,877	160	$40,383	62	$6,874	98	$33,509
DND	5,073	$4,605,658	342	$181,346	8	$5,069	334	$176,277
HC	489	$106,934	52	$13,672	17	$5,828	35	$7,844
TOTAL (4 Departments)	6,837	$5,174,041	606	$256,545	135	$38,249	471	$218,296
Total Government-wide	22,006	$10,944,322	1,581	$496,762
2007
CRA	223	$230,609	25	$32,261	25	$32,261	0	0
DFO	1,044	$167,028	186	$36,167	86	$11,575	100	$24,592
DND	4,805	$8,187,839	311	$1,088,330	6	$3,556	305	$1,084,774
HC	542	$238,575	87	$26,460	26	$3,852	61	$22,608
TOTAL (4 Departments)	6,614	$8,824,051	609	$1,183,218	143	$51,244	466	$1,131,974
Total Government-wide	20,655	$14,070,936	1,508	$1,458,296
2005-2007
GRAND TOTAL (4 Departments)	20,793	$22,084,395	1,932	$1,766,996
GRAND TOTAL (Government-wide)	65,145	$39,796,196	4,754	$2,550,364

Note: Revised figures are in orange.

Date modified:

2018-11-01