WORKING GROUP # 8: PREQUALIFICATION, SOURCE LISTS AND STANDING OFFERS. Conference Call, November 30, 2005 RECORD OF DECISIONS

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1 WORKING GROUP # 8: PREQUALIFICATION, SOURCE LISTS AND STANDING OFFERS RECORD OF DECISIONS Present: Newfoundland and Labrador, Nova Scotia, Quebec, Manitoba, Saskatchewan, Alberta, British Columbia and Canada Absent: Prince Edward Island, New Brunswick, Ontario, Northwest Territories and Yukon BC, as Chair of the Working Group, led the review of the summary table of responses that Parties had provided to BC s survey of Parties on their use of pre-qualification lists and standing offers. MB noted that its response incorrectly covered only one department and offered to supplement its response with the missing information. QC noted some deficiencies in the English translation it had provided and it was agreed that the Secretariat would try to improve the translation. NL indicated that its response had been sent but did not appear in the table. In reviewing the issue of pre-qualification lists and standing offers, Parties discussed their practices in using these procurement vehicles as well as source lists. The practices of the Parties on the conference call are summarized in Attachment 1. BC reviewed the survey results and flagged its concern that Ontario s Vendor of Record system allowed departments, for requirements up to $750,000, to restrict tendering to a limited number of vendors selected from the list instead of inviting all qualified vendors to bid. AB sought clarification on the differences between a pre-qualification list in Article 506(7) and a source list in Article 506(2)(c). QC also raised the issue of whether, for the purposes of determining whether the AIT applies to the procurement, the value of the contract should be determined using the overall contract value of a SO or the value of an individual call-up under the SO. QC noted that the new Crown Annex takes the approach that the overall contract value should be used (Annex 502.3(A.3)). It was apparent in the discussion that the interpretation of the terms prequalification list, source list and standing offer meant different things to different Parties and this complicated an understanding of the similarities and differences in how Parties used these vehicles. 1

2 It was agreed that: the Working Group should clarify the terminology, in particular the relationship between a pre-qualification list, a source list and a standing offer; the Working Group should clarify the interpretation of which contract value is to be used for SOs; the summary chart will be updated to include NL s response and the revised English for QC s response; and the Chair will seek further information from ON concerning ON s Vendor of Record process with respect to AIT thresholds. 2

3 Parties Practices 1 Attachment 1 British Columbia In setting up a pre-qualification list, BC advertises the invitation nationally where the requirement is anticipated to be above threshold. BC considers the resulting list to be a source list as defined in Article 506(2)(c). For each opportunity above the AIT thresholds, BC invites bids from all vendors on the list in the given category. Vendors are given the opportunity to be added to a pre-qualification list continuously or at regular intervals. If above threshold levels, vendors are given the opportunity to apply annually. BC uses a competitive process through BID BC to establish a standing offer (SO). SOs are established based on the maximum individual purchase that could be made under the SO. After vendors are selected, departments may select a vendor of goods or services from the SO list without further competition. Alberta For goods opportunities, AB posts its invitations to pre-qualify on the Alberta Purchasing Connection through an open and competitive process. This is generally done annually. For opportunities above threshold, all vendors on the list in the relevant category are invited to tender. For services opportunities above threshold, Alberta posts its invitations to pre-qualify on the Alberta Purchasing Connection through an open and competitive process. All vendors that meet the pre-qualification requirements are invited to tender. For under threshold opportunities, Alberta Purchasing Connection may or may not be used to advertise the invitation and all vendors on the pre-qualification list are invited to tender. The list may be used again for future opportunities. Invitations are normally done annually. SOs are established through a competitive process. After vendors are selected, departments may select a vendor from those on the SO without further competition. There is no obligation to rotate the selection of vendors. Saskatchewan SK normally publishes invitations to pre-qualify and standing offers on the SaskTenders website. The process varies depending upon the circumstances as does the length of the arrangement. 1 To make these notes more comprehensible and comparable, certain information has been included that was drawn from the summary table of responses which was discussed during the call. Parties have also added certain details for clarity. 3

4 Manitoba MB posts its invitations to pre-qualify on MERX. When it uses a pre-qualified list, it publishes the opportunity on MERX with a notice that the opportunity is restricted to prequalified vendors. The notice also contains information on how a vendor can become pre-qualified. If the prequalification process is not long, a vendor may qualify in time to bid on the tender. In any event, vendors can see the types of opportunities offered and arrange to pre-qualify if they wish to pursue such opportunities in future. MB uses a competitive process to establish its standing offers. For information technology (IT) purchases, MB publishes an invitation to pre-qualify and develops a short-list of qualified service vendors which are then asked to quote on the work. For software, SOs are established based on the software install base and expected demand. Desktop related hardware is purchased by a vendor with which the province has entered into a long-term services agreement. This vendor issues a competitive document and establishes standing offers. Quebec QC establishes prequalification lists for goods and services through a public invitation to qualify on SEAO. If a requirement is above AIT threshold levels, all vendors in a given category on the list will be invited to bid or a public tender will be posted on SEAO. The process conforms to Article 506(7) or 506(2)(c). QC also maintains a central registry for certain services that are largely excluded from the AIT. The use of this source list conforms to Article 506(2)(c). All SOs are publicly tendered on SEAO. In a SO, the vendor with the lowest price or the best quality/price ratio, taking into account the cost of transportation for the delivery of the good or service, must be used in any subsequent draw down unless that vendor is unable to meet the requirement. In such case, departments will go down the qualification list from next best to next best until the requirement can be satisfied. In certain cases, a tender for a SO may specify that all requirements above a certain amount will be subsequently tendered among all qualified vendors. Nova Scotia With respect to services, all invitations to establish a pre-qualification (standing offer) 2 list for services over $10,000 are publicly tendered. Purchases from the standing offer list must not exceed $50,000 (Atlantic Procurement Agreement Threshold for services) per project. Projects cannot be split to avoid public tender. All multiple vendor pre-qualified (standing offer) lists for services are tendered annually. NS issues individual public tenders for services over $50,000 on a project by project basis. 2 For Nova-Scotia, the terms pre-qualification list and standing offer are used interchangeably. 4

5 For goods, all invitations to establish a pre-qualification (standing offer) list for goods over $5,000 are publicly tendered. Purchases from the standing offer list must not exceed $25,000 (Agreement on Internal Trade threshold for goods). Goods cannot be split to avoid public tender. Pre-qualified (standing offer) lists for goods are tendered annually. NS issues individual public tenders for goods over $25,000. Newfoundland and Labrador NL publicly advertises all acquisitions for goods and services valued at $2,500 and greater. All public works tenders valued above $10,000 are also publicly advertised through the Government Purchasing Agency web site. Source lists are not used as a source of supply as all acquisitions are posted to the web site and are open to all interested vendors. Standing Offer Agreements are also conducted through a public tender call allowing all vendors equal access to Government business. Canada CA uses pre-qualification lists and standing offers but not source lists. All invitations to pre-qualify are publicly tendered on MERX where required under NAFTA, WTO, CKTEA or AIT. Pre-qualification lists are used mostly for services. Once the list has been established, the list of pre-qualified vendors is also published. These lists may be used as source lists for requirements below trade agreement thresholds. SOs are publicly tendered on MERX where required under the preceding trade agreements. CA currently publishes most opportunities above $10,000 on MERX. 5

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