Changes to Public Procurement - Nova Scotia's New Public Procurement Act
September 6, 2011
On June 1, 2011, several provisions of the new Nova Scotia Public Procurement Act (the “Act”) came in to force to change the way public sector entities procure goods, services, construction, and facilities. Along with government departments, school boards, health authorities, housing authorities and crown corporations, the Act applies to municipalities, and certain post secondary institutions and community colleges.
The Act requires public sector entities to follow certain procurement practices and procedures, adopt procurement standards and meet certain reporting obligations. It also establishes the position of Chief Procurement and a Procurement Governance Secretariat, whose function it will be to develop outreach and professional development programs, conduct research, implement trade agreements and operate a procurement website. The Act also establishes a Procurement Advisory Group, made up of procurement professionals, to identify efficiencies, share best practices, and implement standardization.
This Legal Update outlines important changes to procurement practices that school boards, municipalities, post-secondary institutions, and other entities will face over the next year.
(1) MANDATORY PROVISIONS
The Act imposes several obligations on public sector entities in relation to procurement practices. First, among others, the Act requires public sector entities to:
(i) Publicly tender for all goods, services, construction and facilities in accordance with the applicable regional, national or international trade agreements by public advertisement on the procurement website;
(ii) Post on the procurement website the name of the successful bidder and the contract amount awarded;
(iii) Post procurement policies on its public website;
(iv) Abide by the acceptable alternative procurement practices (to be established in regulations which are not yet enacted);
(v) Participate in outreach and professional development programs;
(vi) Incorporate contract and risk-management guidelines into its procurement processes;
(vii) Ensure procurement employees abide by the standards set out in Section 15;
(viii) Respect supplier standards, rights and responsibilities (to be established in regulations which are not yet enacted);
(ix) Provide an annual report to the Chief Procurement Officer;
(x) Adopt or adapt procurement policies to be consistent with the requirements of this Act.
Second, the Act requires that every public tender notice include terms and conditions consistent with the Atlantic Standard Terms and Conditions and the Construction Contract Guidelines (as applicable) and comply with all legislation affecting the scope of the tender.
Third, although the Act sets out soft obligations and principles to follow, public sector entities are required to ensure that procurement employees abide by certain standards set out in the Act. These include to:
(i) Ensure procurement activities are conducted according to policies, provincial and federal legislation, trade agreements and ethical business practices;
(ii) Encourage and support collaborative procurement amongst public sector entities;
(iii) Follow leading procurement practices;
(iv) In good faith, conduct business with current and prospective suppliers and be fair in all business dealings;
(v) Strive to obtain the best value for each expenditure;
(vi) Require suppliers provide accurate representations of goods, services and construction;
(vii) Encourage suppliers to consider sustainability in their product or service offerings;
(viii) Encourage the negotiation of an equitable and mutually acceptable settlement when a dispute arises; and
(ix) Request removal from a procurement process when a personal conflict of interest is perceived.
Finally, section 17 requires public sector entities to conduct a debriefing session for an unsuccessful bidder/supplier, if one is requested, to provide feedback on the evaluation of a public tender.
(2) PERMISSIVE PROVISIONS
The Act contains other provisions relevant to procurement practices that are not mandatory. For example, a public sector entity may choose to tender for goods, services, construction and facilities for amounts that are lower than the thresholds set out in the applicable trade agreements. Further, a public sector entity must obtain best value when evaluating a bid, but is not limited solely to purchase price and life-cycle cost considerations and may also consider environmental and social factors, delivery, servicing and capacity of the bidder to meet criteria as stated in the bid received.
With respect to goods manufactured or produced in Nova Scotia, the Act authorizes public sector entities to apply a preference for these goods, in accordance with thresholds set out in the Atlantic Procurement Agreement. It also provides the right to accept or reject bids from other jurisdictions on the same basis that those jurisdictions would treat a bid from a Nova Scotia supplier, and consider best overall value as a determining factor when accepting bids from a non-reciprocating jurisdiction.
(3) EFFECTIVE DATE OF THE PROVISIONS OF THE ACT
While most of the provisions of the Act came in to force on June 1, 2011, there are several key provisions that will not come in to effect until June 1, 2012. The following obligations will not come into effect for another year:
(i) The requirement to publicly tender for all goods, services, construction and facilities in accordance with the applicable regional, national or international trade agreements by public advertisement on the procurement web portal;
(ii) Posting on the procurement web portal the name of the successful bidder and the contract amount awarded;
(iii) The incorporation of contract and risk-management guidelines into procurement processes;
(iv) The provision of an annual report to the Chief Procurement Officer;
(v) The requirement to adopt or adapt procurement policies to be consistent with the requirements of this Act.
In addition, the requirement that every public tender notice include terms and conditions consistent with the Atlantic Standard Terms and Conditions and the Construction Contract Guidelines (as applicable) and the obligation to conduct a debriefing session for unsuccessful bidders who request such a session, does not come into effect for another year.
Public sector entities have until June 1, 2012 to adapt procurement policies to meet the requirements of the Act. The Act notes that the Chief Procurement Officer will require proof before this time that a public sector entity’s procurement policies and practices conform with the Act. If an entity’s policies and practices are not amended by June 1, 2012, the Province of Nova Scotia Sustainable Procurement Policy will be deemed to apply.
(4) REGULATIONS UNDER THE ACT
Regulations under the Act have not yet been passed, however, the Act has left certain procedures and practices to be defined by regulation, making it probable that Regulations will be passed within the next year.
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