A. Background: Purpose and Relationship to the Directive
In our March Bulletin, Procurement Redux: Understanding the New Broader Public Sector Procurement Directive1, we outlined the significant differences between the 2009-issued BPS Supply Chain Guideline ("Guideline"), and the Broader Public Sector ("BPS") Procurement Directive ("Directive"), which replaced the Guideline effective as of April 2011. However, in broad strokes the Directive was simply a pared-down version of the Guideline, in that it effectively summarized only the mandatory requirements of the previous Guideline and left out the commentary regarding the process and governance required to implement these requirements.
That "gap" has now been filled by the recent release by the Ministry of Finance of the BPS Directive Implementation Guidebook ("Guidebook"), which is designed to assist BPS organizations with implementing the requirements of the Directive2 by outlining best practices as to procurement process and governance. The Guidebook, for example:
- outlines several key factors to ensure compliance: namely, support, communication, monitoring and follow-up;
- with respect to internal accountability, also requires that organizations identify a senior-level individual responsible for compliance;3 and
- like the Guideline, the Guidebook also outlines the circumstances when single sourcing and sole sourcing are permitted. In addition, it sets out the exemption, exception or non-application clauses that exist under the Agreement on Internal Trade or other trade agreements, as same are current as of April 1, 2011,4 which if applicable then allow for conducting non-competitive procurement.5
In the event that there is an inconsistency between a provision in the Guidebook and the Directive, the latter prevails.6
B. New Content and Supplementary Guidance
While much of the content of the Guidebook has been derived from the Guideline, there are two areas of note on which the Guidebook has more closely focused than the Guideline:
1. Application to Buying Groups, Group Purchasing Organizations ("GPOs") and Shared Service Organizations ("SSOs")
Buying Groups, GPOs and SSOs are not referenced in the Directive and they are given only a brief mention in the Guideline.7 However, while the Guidebook introduces a section on such collaborative procurement8 and provides a discussion about the commonalities as well as distinctions between these types of organizations, the text of the brief section is still largely taken from the Guidelines. The Section concludes, as did the Guidelines, that BPS organizations that participate in group purchasing activities through these types of entities must ensure that such activities are carried out in a manner that is consistent with the Directive.9
2. Managing Vendor of Record Arrangements
In connection with Supplier Pre-Qualification (Directive Mandatory Requirement #5), the Guidebook contains detailed descriptions of how organizations should utilize and manage the establishment of Vendor of Record ("VOR") arrangements, which usually arise as a result of the supplier pre-qualification process,10 for the purpose of increasing procurement efficiency and obtaining consistent competitive prices for identified goods and services.11 In contrast to the content regarding Buying Groups, GPOs and SSOs, the VOR descriptions include significant new content, including - in addition to an outline of the Ontario Ministry of Government Services-established VOR arrangements available to organizations - a new step-by-step process to establish organization-specific VOR pool arrangements, to serve as the basis for each second stage, invitational competitive procurement process from that pool.12
The Guidebook also emphasizes that BPS designated organizations are required to comply with any amendments to applicable trade agreements approved after the Directive's release.13
As has been highlighted above, the Guidebook both brings forward best practices from the Guideline and introduces certain new supplementary information to assist BPS organizations in implementing the mandatory requirements of the Directive. In summary, while collectively the Directive and the Guidebook in many respects replicate the content of the Guideline, there are some subtle differences, such that these new documents bear a careful reading.
1. Available online at www.fasken.com.
2. Guidebook, Preamble, p. 1.
3. Ibid at Section 10, pp. 6-7.
4. Ministry of Finance, "Overview Questions and Answers", available online at: www.fin.gov.on.ca/en/bpssupplychain/webinar_questions.html.
5. Ibid at Sections 6 and 10.3.4, pp. 3, 30-31.
6. Supra note 1 at Section 1, p. 1.
7. In the case of the Guideline, Buying Groups and SSO's are mentioned only for the purpose of noting that they are governed by the Guidelines, and Buying Groups and Group Purchasing Organizations are treated as the same procurement mechanism.
8. "Collaborative procurement is a coordinated event that facilitates purchasing on behalf of multiple organizations" and it may be facilitated through Buying Groups, GPOs and SSOs, ibid at Section 8, p. 3.
10. Ibid at Section 10.3.3.3, pp. 15-17.
11. Ibid at Section 10.3.3.3.2, p. 16.
12. Ibid, see Section 10.3.3.3.2, p. 17 for a detailed breakdown of these steps.
13. Ibid at Sections 6, 10.2.3.6, 10.3.4.1, 10.3.4.2 pp. 3, 8, 30-31.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.