Nfld. & Labrador

New public tender legislation to seek best value, not lowest bid

New public procurement legislation would see tenders awarded for best value over lowest cost, and include many more areas of government spending.
Minister of Service NL Eddie Joyce and Deputy Minister Sean Dutton announce new rules for how government purchases almost $4 billion in goods and services every year. (Ted Dillon/CBC)

New public procurement legislation proposed in Newfoundland and Labrador would see tenders awarded for best value over lowest cost, and include many more areas of government spending.

At a press conference on Tuesday morning, the provincial government announced its new plan to replace the Public Tender Act, along with other pieces of legislation.

Entitled an Act Respecting Procurement by Public Bodies, the legislation was to undergo second reading in the House of Assembly.

The new rules would see environmental and socio-economic priorities valued over the cheapest bidder.

"We feel very confident that it's going to help Newfoundland and Labrador. It's going to decrease cost and it's going to provide better services," Service Newfoundland and Labrador Minister Eddie Joyce told reporters Tuesday.

Government will also mandate the public tendering process for areas of work previously exempt, including engineering, architectural, financial and telephone services.

There will also be more transparency, with results posted online and the losing bidders given a meeting to discuss the decision.

"Everything we can put online, will be online," said Joyce.

The Public Tender Act was brought into law in 1990. Those rules are now outdated, Joyce said, and the new legislation will modernize the public procurement process.

In 2008 a report commissioned by the Progressive Conservative government highlighted problems with the act.

A bill was introduced in 2012 to make changes but it was never debated or enacted.

"I'm sure there was a lack of political will, I'm absolutely sure," said Joyce.

Consulting company welcomes changes

Terry Hussey, who runs a construction consulting company, said government will save money by tendering engineering and architecture work, which has been exempt until now (Ted Dillon/CBC)

"It won't impact good suppliers," said Terry Hussey, CEO of Vigilant Management, a consulting company in the construction industry.

"The ones who would skate in a bid under the line, the classic 'bid low and change order your way to a profit,' that's going to be much harder to do under this," he said.

Hussey said the requirement for government to now tender engineering and consulting work should lead to big savings, and said his company should benefit.

"I wasn't able to compete for the work because I wouldn't have the right friends or the right access whereas now if the job goes out for tender at least I can put in a bid and compete fairly," he said.

Changes could solve busing problems: minister

The province's tendering process was called into question in October by Dave Callahan, a school bus operator in St. George's on the island's west coast.

He alleged that the Public Tender Act allowed operators to cut corners to save money.

More than 40 school buses have been taken off the road this school year for being unsafe. In 2014, the number was 74 buses.

"This would help the school bus operators because now it's the best value, not the best price" said Joyce.