The Broader Public Sector Accountability Act, 2010 provides the authority for the Management Board of Cabinet to issue directives governing the procurement of goods and services by designated broader public sector organizations.
The Broader Public Sector (BPS) Procurement Directive provides consistent procurement practices for BPS organizations to:
The BPS Procurement Directive is based on the Supply Chain Guideline which was developed in consultation with BPS organizations.
The BPS Procurement Directive applies to all designated broader public sector organizations under the Broader Public Sector Accountability Act, 2010 as follow:
Please refer to question five for a list of entities that are currently exempt from the definition of designated broader public sector organization.
The implementation timelines for designated broader public sector organizations took effect on:
One of the purposes of the BPS Procurement Directive is to ensure that publicly funded goods and services are acquired by BPS organizations through a process that is fair, transparent and competitive.
For designated broader public sector organizations, the BPS Procurement Directive applies to the purchase of any goods, construction, and services, including but not limited to information technology and consulting services made using public funds. Only exemptions, exceptions or non-application clauses existing under the Agreement on Internal Trade (AIT) or other trade agreements apply.
Furthermore, the BPS Procurement Directive also applies to these goods and services purchased jointly with other organizations.
The Broader Public Sector Accountability Act, 2010 and Ontario Regulation 219/11 made under the Act exclude some entities from the definition of publicly funded organizations. These include:
These organizations are not required to follow the BPS Procurement Directive.
In accordance with the Act, publicly funded organizations that received less than $10 million in public funds in the previous fiscal year of the Government of Ontario are also not required to follow the BPS Procurement Directive.
For publicly funded organizations that are not required to follow the BPS Procurement Directive, the government has developed the Procurement Guideline for Publicly Funded Organizations in Ontario (PDF). It is a resource written in everyday language, recommended for voluntary use, containing principles and leading practices in procurement that may help achieve maximum value for money when purchasing goods and services.
You have to take into account the public money that is provided directly by the Government of Ontario or a public body as designated in the regulations under the Public Service of Ontario Act, 2006, through a grant, transfer payment or other funding arrangement. It also includes the money received by the school board from taxes levied under the Education Act for school purposes.
In the calculation, do not include:
Please consult Regulation 146/10 under the Public Service of Ontario Act, 2006 for a complete listing of public bodies.
While not in scope under the BPS Procurement Directive, organizations that receive less than $10 million in public funds are still encouraged to apply best practices to increase efficiency in their procurement processes. The government has developed the Procurement Guideline for Publicly Funded Organizations in Ontario (PDF), a resource recommended for voluntary use, containing principles and leading practices in procurement that may help achieve maximum value for money when purchasing goods and services.
The BPS Procurement Directive has the following requirements:
Different requirements will apply based on the value and the type of goods and services that is procured by designated BPS organizations.
|Total Procurement Value||Means of Procurement|
|$100,000 or more||Open competitive process|
|Total Procurement Value||Means of Procurement|
|$0 up to but not including $100,000||Invitational or open competitive process|
|$100,000 or more||Open competitive process|
If you are a designated broader public sector organization, the BPS Procurement Directive applies to your individual and joint procurement activities. You will have to ensure that your purchasing activities conducted through the purchasing group meet the requirements of the BPS Procurement Directive.
Of the designated BPS organizations, only hospitals are required to prepare attestations regarding their compliance with specific aspects of the legislation. For additional information, visit http://www.health.gov.on.ca/en/legislation/bpsa/resources.aspx.
Other designated broader public sector organizations are currently not required to report. However, the legislation provides the power to make regulations requiring these organizations to provide attestations of compliance with the requirements of the Act.
Ministries may choose to provide policy direction on reporting. Your ministry will communicate their expectations.
The Procurement Directive defines "Consultant" as a person or entity that under an agreement, other than an employment agreement, provides expert or strategic advice and related services for consideration and decision-making. Further, the Directive defines "Consulting Services" as the provision of expertise or strategic advice that is presented for consideration and decision-making.
Whether a service in question is deemed consulting service should be determined by the nature of the service being procured and not by the designated profession being represented.
Services provided by licensed professionals may constitute consulting services. Where an organization is seeking to obtain expertise or strategic advice for consideration and decision-making, notwithstanding the designated profession providing the service, the organization is seeking to obtain consulting services. Under these circumstances, organizations must utilize competitive procurement irrespective of the value of the procurement.
At the same time, procurement of services that in Ontario may, by legislation or regulation, be provided only by any of the following licensed professionals: medical doctors, dentists, nurses, pharmacists, veterinarians, engineers, land surveyors, architects, accountants, lawyers and notaries, does not constitute consulting services. BPS organizations should still clearly delineate between professional services that are providing expertise or strategic advice for consideration and decision-making and professional services that fall outside this scope.
Conversely, individuals or organizations may identify themselves as “consultants”, but provide non-consulting services. These are services that do not provide expert or strategic advice for consideration and decision-making, but rather deliver a more tangible product/service. In these situations, organizations must conduct the procurement activities consistent with their requirements for goods and non-consulting services.
It is up to the Organization to determine whether the services they require are consulting services or not.
Organizations must procure consulting services competitively irrespective of the value of the procurement. The AIT does not contain exemption, exception, or non-application clauses specific to consulting services; however, there are a number of such clauses that can be applied under restricted circumstances. Organizations are strongly encouraged to procure consulting services competitively even in situations where the procurement falls under an applicable exemption, exception, or non-application clause in a trade agreement.
When looking to conduct non-competitive procurement based on an exemption, exception, or non-application clause of a trade agreement, organizations should be mindful that Section 5 of the Directive requires that the “Organization asserting that procurement is subject to an exemption, exception, or non-application clause under a trade agreement must formally establish applicability of this clause.”
Organizations must establish an approval authority schedule (AAS) for procurement of goods, consulting and non-consulting services. The AAS must establish, for each of the functional procurement roles identified in Section 7.2.1 of the Procurement Directive, authorities to carry out the procurement-related functions with dollar thresholds. The AAS must be approved by the Board of Directors of the Organization or its equivalent.
The approval authority for non-competitive procurement of consulting services can be delegated to the next in command only in situations where the CEO is absent and the next in command is acting in the capacity of the CEO.
The approval authority for all purposes others than those identified above may be delegated in accordance with the organizational policies.
No, the CEO, President or equivalent approves non-competitive procurement of consulting services between 0-$1 million. When the appropriate approval has been received to proceed with a non-competitive procurement of consulting services, subsequent procurement activities should be consistent with the organization’s segregation of duties as outlined in section 7.2.1 of the Procurement Directive.
Organizations conduct invitational competitive procurement by inviting three or more qualified suppliers to submit written proposals to supply goods or services as specified by the Organization. The Procurement Directive does not contain requirements related to the number of responses organizations must receive when conducting invitational procurement.
For the purpose of the Procurement Directive, properly established, managed and utilized VOR arrangements may be utilized as an open competitive method of procurement for individual procurements that do not exceed the ceiling price of the VOR arrangement. MGS VOR arrangements may be utilized where they are accessible to the BPS.
The BPS Procurement Directive Implementation Guidebook, contains detailed descriptions of how organizations should manage the establishment and utilization of VOR arrangements.
The BPS Procurement Directive Implementation Guidebook and the BPS Procurement Directive Toolkit (PDF) are available on this website.
Certain exemption, exception or non-application clauses from the AIT will be listed in the Procurement Directive Implementation Guidebook. The exemption, exception or non-application clauses are current as of April 1, 2011. Organizations are required to comply with any amendments to the trade agreements approved after April 1, 2011. BPS organizations are encouraged to seek legal advice to determine whether the clauses are applicable to particular procurement situations.
In situations where there is an applicable exemption, exception, or non-application clause in a trade agreement, organizations are strongly encouraged to procure consulting services competitively.
The Procurement Directive recognizes the contract A – contract B approach as the leading practice; however, it also recognizes that in certain circumstances, organizations may utilize alternative procurement strategies that may be different from the traditional contract A – contract B approach to procurement.
The policies can be approved using the standard organizational policy approval process with the exception of the approval authority schedule. The organizational AAS must be approved by the Board.
There are two components to this response.
With respect to non-competitive procurement of goods and non-consulting services, the president does not have to approve every non-competitive procurement. The Procurement Directive requires that prior to commencement, any non-competitive procurement of goods or non-consulting services must be approved by an authority one level higher than the requirements of the organizational AAS for competitive procurement.
For consulting services, the CEO, president or equivalent must sign off on every non-competitive procurement under $1million. The board of directors must approve ALL consulting services for $1M or more. The CEO and/or Board may not approve non-competitive procurement of consulting services unless there is an applicable exemption, exception, or non-application clause from the AIT or other applicable trade agreement.
The Code of Ethics does not supersede codes of ethics that Organizations may have in place, but supplements such codes with supply chain-specific standards of practice. It is sufficient to maintain an organization's code of ethics as long as it includes all elements set out in the Procurement Directive.
The Procurement Directive is based on five key principles that allow Organizations to achieve value for money while following procurement processes that are open, fair, transparent and accountable. As a result, BPS organizations are being asked to maximize the value they receive from the use of public funds. A value-for-money approach aims to deliver goods and services at the optimum total life-cycle cost (i.e., not just lowest price).
Mandatory Requirement #9 - Evaluation Criteria, states that maximum justifiable
weighting must be allocated to the price/cost component of the evaluation criteria. Maximum justifiable weighting does not require organizations to allocate the largest percentage of weighting to price, but rather, it is intended to encourage organizations to assign maximum weighting to price that is appropriate for the given procurement, in the context of value for money with price being one of multiple criteria. It is important to recognize that the allocation of weighting to price will vary by type of procurement, and in some instances, price will be the predominate factor, while in other instances, specifications may be more important.
Organizations should assess weighting on a case-by-case basis.
For example, when procuring a life saving device, reliability may have a higher weighting than price. Conversely, when procuring a good or services such as stationery, price would likely have a higher weighting. In the spirit of value for money when all other things are equal, price should be given the most significant weighting possible.
Each organization has the discretion to determine what the maximum justifiable weighting for the price/cost component should be.
To reiterate, this does not mean that price has to be the highest overall evaluation component, but rather, that each criteria of the evaluation (and the assigned weighting) has been carefully thought through.
The Procurement Directive provides the requirements that are mandatory for organizations to follow. The Procurement Directive Implementation Guidebook is designed to assist organizations with implementing the requirements of the Procurement Directive.
The BPS Procurement Directive provides 25 mandatory procurement requirements. BPS organizations are responsible to review their existing procurement policies and procedures and to ensure the 25 mandatory requirements of the BPS Procurement Directive are incorporated within their procurement policies and procedures.
Supply Chain Ontario
Ontario Shared Services
Ministry of Government and Consumer Services
222 Jarvis Street, 8th Floor
Toronto, ON M7A 0B6