Senators approve procurement policy update, with contract limit increase on the horizon

Senators recently gave the OK to upcoming changes to the Red Chamber's procurement policy, raising the dollar threshold for contracts that will not require specific approval from the Senate Internal Economy Committee. Currently, contracts awarded by the Senate administration through a competitive process have to be put to the Senate Internal Economy Committee (CIBA) for approval if they total $125,000 or more, while sole-sourced contracts have to be approved by CIBA if they exceed $25,000 for goods or $40,000 for services. The changes agreed to by CIBA on Oct. 31 would increase those amounts to $150,000 for contracts awarded through a competitive process, and to $30,000 for sole-sourced contracts for goods, and $50,000 for services. However, implementation of these changes—which were originally set to come into force as of Nov. 1—was delayed after Senators agreed to postpone deliberations on interconnected changes regarding the Senate’s policy on financial authorities. As noted by the Senate’s chief financial officer Pierre Lanctôt, both changes would need to be implemented at the same time. In discussing the increased limits, some Senators raised concerns over maintaining accountability for government spending, warning that it is "often the smallest contracts that cause the biggest problem.” The changes approved on Oct. 31 will be the first update to the policy since it came into effect in November 2022. Pierre Lanctôt, the Senate's chief financial officer, says there are no specific rules in the Senate’s procurement policy regarding risk management. Screenshot courtesy of ParlVu Lanctôt told Senators that the changes to the policy "reflect inflation in recent years." CSG Senator Jim Quinn (New Brunswick) raised concerns regarding oversight of potential changes in contract values after a deal has been awarded. “What if a contract is entered into for $50,000, where that $50,000 becomes $100,000, or $125,000? And this happens quite often in the public services,” said Quinn. “It is often the smallest contracts that cause the biggest problem.” Lanctôt explained that for sole-source contracts, if the contract value exceeds the Senate’s limit, the matter must return to CIBA for approval. For competitive contracts, the Senate’s existing policy sets a cap on contract increases, allowing a maximum increase of 50 per cent, beyond which a contract would have to be put to CIBA for approval, regardless of whether it remains below the current $125,000 threshold. If the increase stays within this 50 per cent limit, additional approval isn’t needed. Quinn suggested that the committee be notified of any significant increases to contracts, even if they don’t exceed the thresholds. “At the end of the day, people around this table are the people who are going to be held to account for contracts, and it does happen. How can we be advised if something has gone awry that wasn’t expected?” he questioned, later adding: “I thought I should raise that because it seems we get killed with little things,” Quinn said. Lanctôt noted that the Senate publishes all contract changes, but that such information could be reported directly to CIBA if desired. Independent Senator Jane MacAdam (Prince Edward Island) raised concerns over the lack of a requirement for contracts that remain within these thresholds to come back to CIBA if they’ve been “significantly delayed.” “Sometimes vendors are selected because they can deliver by a certain date,” noted MacAdam as an example, and in other cases, the services to be delivered may have a pressing timeline. “I’m thinking of cybersecurity or some kind of a contract where we need to do things quickly.” In response, Lanctôt said: “We want to have strict and rigid controls, but at the same time we need flexibility if we increase a contract.” He added that his office doesn’t want to “overload the system” by having to come and ask for approval to extend a contract for a reasonable period, unless there is a significant delay or change in the amount. The Senate’s Audit and Oversight Committee falls under the same Senate procurement policy, but as part of the recommendations presented by Lanctôt on Oct. 31, the obligation for the committee to seek approval from CIBA would be removed. “They have to bring their budget to the Senate. Therefore, coming to CIBA was deemed as a redundancy in the process,” he explained, stressing that the committee “cannot bypass the requirements of the policy” when it comes to contract procurement. “The logic was that if they want to do an audit … they don’t necessarily have to ask for permission to make a contract to audit us,” Lanctôt later added in response to concerns raised by both Quinn and Conservative Senate Leader Don Plett (Landmark, Man.). ISG Senator Tony Loffreda (Shawinegan, Que.) questioned whether any risk management processes are baked in to the Senate’s procurement policy, “to address supplied performance, ethical concerns, and potential supply chain disruptions.” ISG Senator Tony Loffred questioned whether any risk management processes are baked in to the Senate’s procurement policy. The Hill Times photograph by Andrew Meade Lanctôt said there are different strategies depending on the type of service or product being procured, “based on the market,” but that the Senate doesn’t “have specific rules” regarding risk management in its existing policy. “It is hard to embed strategies in a policy because we evolve the strategies as the market conditions change,” he said. “For example, a few years ago we were doing a lot of contracts with fixed prices for a long period. Now, we have to adjust because suppliers don’t want to sign contracts for five years with fixed prices … If we embed too many requirements in the policy, it becomes very hard to manage. We have to be flexible.” CIBA’s next meeting—at which the financial authorities policy is now set to be discussed—is set for Nov. 21. The agreed-to changes to the Senate procurement policy won’t be implemented until a decision is made on this policy. Proposed changes to the Senate’s financial authorities policy include revising delegation authorities to give the clerk of the Senate—a position that was finally permanently filled this past March after only being filled on an interim basis since 2015—official “authority on expenses.” Last spring, CIBA similarly amended Senate administrative rules to restore the functions of the clerk of the Senate which had been transferred to the executive committee. ikoca@hilltimes.com The Hill Times

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Senators approve procurement policy update, with contract limit increase on the horizon

The Senate Internal Economy Committee has approved updates to the procurement policy, but the changes have not yet been implemented.

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