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Sole-source contract spending down
Recommendations by auditor general in 2009 addressed by standing committee

Janna Graham
Northern News Services
Published Monday, November 12, 2012

Sole-source spending by the Government of the Northwest Territories is down for the previous fiscal year, according to the office responsible for tracking the spending of public money.

Warren St. Germaine, comptroller general of the Northwest Territories, said the number of sole-source contracts approved for 2012 were much lower in dollar amount than the previous year - at about 20 per cent of total procurement.

The territorial government also recently responded to 2009 criticism by the auditor general of Canada.

St. Germaine said that a Standing Committee of Government Operations's response to recommendations by the auditor general was tabled in the last session of the legislative assembly.

The office of the Comptroller General has responsibility for providing complete control over the administration of government revenue with respect to the receipt and payment of public money, accounting policy, the financial records of the GNWT, reporting responsibilities, financial analysis, advice and interpretation, internal auditing and related matters.

In 2009, the Office of the Auditor General of Canada did a review of several GNWT departments - Public Works and Services, Health and Social Services, and Transportation.

Looking at a random sample of contracts awarded, the report concluded that most sole-source contracts were awarded in accordance with proper policy. They found a few, however, that were not.

Public Works and Services renewed a consulting contract for an annual value of $60,000 for two years without a competitive tender and without documentation on file to demonstrate that the contractor was the only one capable of performing the work.

Health and Social Services could not demonstrate that only one contractor was available or capable of administering three medical benefits programs.

The value of the three contracts totalled $5.5 million, most of which pertained to payment of medical benefits, and a small portion that related to an administration fee paid to the service provider.

Transportation purchased a portable bridge for $48,000. It had initially leased the bridge from the same contractor and did not enter into an open competitive process with other suppliers of portable bridges before making the purchase.

The Department of Industry, Tourism and Investment was not included in the audit because its procurement policy is governed by the Business Incentive Policy, which gives leverage to NWT-based business.

Hughie Graham, the president of the Northwest Territories Chamber of Commerce, said that while he recognizes that there can be valid reasons for not putting contracts though a competitive process, the chamber wants to see requests for proposals to allow "fair and competitive business and procurement."

Graham added, "you want to make sure that procurement in GNWT is a fair process that all businesses in the NWT have an opportunity to compete."

Fact file

Breakdown of GNWT contracts over $5,000

Type of contract # of contracts $ amount

Year ended March 2012

Procurement process contracts

Negotiated procurement 47 $46,131,237.09

Procurement under existing standing offer 479 $22,127,511.66

Request for proposals 206 $70,544,643.66

Request for tenders 839 $74,544,358.95

Sole source procurement 652 $46,940,050.28

Total procurement process summary 2,223 $260,287,801.64

Year ended March 2011

Procurement process contracts

Negotiated procurement 40 $78,293,315.99

Procurement under existing standing offer 403 $17,804,285.18

Request for proposals 237 $61,116,306.37

Request for tenders 917 $97,792,303.00

Sole source procurement 607 $109,908,131.68

Total procurement process summary 2,204 $364,914,342.22

Year ended March 2010

Procurement process contracts

Negotiated procurement 38 $28,604,775.46

Procurement under existing standing offer 326 $10,090,558.62

Request for proposals 237 $75,551,884.57

Request for tenders 955 $110,584,754.74

Sole source procurement 729 $28,804,683.16

Total procurement process summary 2,285 $253,636,656.55

Source: Government of Northwest Territories

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