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ARCHIVED - Purchasing Activity Report 2004

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Introduction

Each year the Government publishes, on the Internet, statistics on purchases and contracts conducted in departments and agencies. The annual Purchasing Activity Report is used to provide statistical analysis of the processes and tools through which government contracting is conducted. 

In reviewing the statistics it must be kept in mind that the federal Government's Contracting Policy objective is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people.

As well, contracting is to be conducted in a manner that will:

  • Stand the test of public scrutiny in matters of prudence, probity, facilitate access, encourage competition and reflect fairness in the spending of public funds;
  • Ensure the pre-eminence of operational requirements;
  • Support long-term industrial and regional development and other appropriate national objectives.
  • Comply with the government's obligations under the North American Free Trade Agreement, the World Trade Organization – Agreement on Government Procurement, and the Agreement on Internal Trade

The Government is committed to working on strengthening and modernising government procurement.  Procurement reform supports the Government's Speech from the Throne commitments to strengthen public sector management, achieve good governance and ensure greater transparency, accountability, fiscal responsibility, and ethical conduct in government. 

In keeping with these overall objectives, on March 23, 2004, the Government announced a new policy on the mandatory publication of contracts over $10,000.  The published lists of contracts in the proactive disclosure pages on various departmental web sites are accessible from this Treasury Board Secretariat web site /pd-dp/gr-rg/index-eng.asp

The procurement reform initiative centres on:

  • Strengthening the government's policy framework;
  • Renewing our human resources in the procurement and materiel community; and
  • Modernising our procurement practices and process.

The Government is also committed to ensuring that Canadians are provided with appropriate information on activities in a cost-effective, efficient and transparent manner.  Suppliers who wish to find out more about federal government bidding opportunities should consult the Government Electronic Tendering System (GETS) at www.merx.com.  Those who wish to find out more about how the Government of Canada buys should contact Contracts Canada at www.contractscanada.gc.ca.


2004 Purchasing Activity Report - Summary

Departments and Agencies subject to Government Contracts Regulations

Total Number and Value of Contracts including Net Amendments

Contract

Solicitation Procedure

Number

% of Total

Value

% of Total

Type

 

 

Number

$ 000

Value

Goods

Contracts below $25,000, including amendments

234,792

 

401,605

 

Electronic bidding (Note 2.3 & 5)

3,082

 

3,427,908

 

Traditional competitive (Note 2.3 & 5)

687

 

817,836

 

ACANs (Note 2.3 & 5)

1,084

 

437,003

 

Competitive awards (Note 2.3)

4,853

 

4,682,747

 

Net amendments

-

 

300,618

 

Competitive including amendments

4,853

82.3%

4,983,365

85.1%

Non-competitive awards (Note 2.3)

1,043

 

876,658

 

Net amendments

-

 

-4,941

 

Non-Competitive including amendments

1,043

17.7%

871,717

14.9%

Subtotal Contracts $25,000 and above

5,896

100.0%

5,855,082

100.0%

Total of All Goods Contracts

240,688

 

6,256,687

 

Proportion of All Contracts

 

57.1%

 

32.8%

Services

Contracts below $25,000, including amendments

139,664

 

855,243

 

Electronic bidding

4,901

 

3,439,047

 

Traditional competitive

5,193

 

4,967,024

 

ACANs

958

 

263,496

 

Competitive awards

11,052

 

8,669,567

 

Net amendments

-

 

1,835,243

 

Competitive including amendments

11,052

84.7%

10,504,810

95.1%

Non-competitive awards

1,995

 

435,410

 

Net amendments

-

 

108,683

 

Non-Competitive including amendments

1,995

15.3%

544,093

4.9%

Subtotal Contracts $25,000 and above

13,047

100.0%

11,048,903

100.0%

Total of All Service Contracts

152,711

 

11,904,146

 

Proportion of All Contracts

 

36.2%

 

62.4%

Construction

Contracts below $25,000, including amendments

26,407

 

75,558

 

Electronic bidding

1,016

 

618,553

 

Traditional competitive

701

 

79,484

 

ACANs

26

 

9,701

 

Competitive awards

1,743

 

707,738

 

Net amendments

-

 

104,578

 

Competitive including amendments

1,743

91.2%

812,316

98.2%

Non-competitive awards

168

 

14,276

 

Net amendments

-

 

470

 

Non-Competitive including amendments

168

8.8%

14,746

1.8%

Subtotal Contracts $25,000 and above

1,911

100.0%

827,062

100.0%

Total of All Construction Contracts

28,318

 

902,620

 

Proportion of All Contracts

 

6.7%

 

4.7%

All Contracts

Contracts below $25,000, including amendments

400,863

 

1,332,406

 

Electronic bidding

8,999

 

7,485,508

 

Traditional competitive

6,581

 

5,864,344

 

ACANs

2,068

 

710,200

 

Competitive awards

17,648

 

14,060,052

 

Net amendments

-

 

2,240,439

 

Competitive including amendments

17,648

84.6%

16,300,491

91.9%

Non-competitive awards

3,206

 

1,326,344

 

Net amendments

-

 

104,212

 

Non-Competitive including amendments

3,206

15.4%

1,430,556

8.1%

Subtotal Contracts $25,000 and above

20,854

 

17,731,047

 

Total Contract Awards including Net Amendments

421,717

 

19,063,453

 


Notes to 2004 Purchasing Activity Report

1. Objective

The objective of the annual Purchasing Activity Report is to provide a basic snapshot of purchasing activities of the Government of Canada.  It is based on the Government of Canada's policy framework in effect in 2004.  It is important to note that there is no statutory requirement for such a report.  It complements information on contracting statistics on Contracts Canada web site at www.contractscanada.gc.ca.  Further information on contracting and contracting activities may be found for major purchasing departments in the Government's public and Parliamentary reporting documents, specifically their Annual Report on Plans and Priorities and Departmental Performance Reports.  Internal departmental audits on the contracting function are posted on /rma/database/aevepp-eng.asp?id=1165.  Also, as mentioned in the Introduction above, the published lists of contracts in the proactive disclosure pages on various departmental web sites are accessible from this Treasury Board Secretariat web site /pd-dp/gr-rg/index-eng.asp

Information on the Procurement Strategy for Aboriginal Business can be found at the Department of Indian Affairs and Northern Development web site www.ainc-inac.gc.ca/saea-psab/index_e.html.

The Purchasing Activity Report was derived from data provided by the reporting entities specified below.  Since the data is not audited, no warranty or other legal assurance as to the truth, accuracy or completeness of any of this information is stated or can be implied.  Any person making use of this information for any purpose whatsoever does so entirely at his/her own risk, and the Crown shall have no liability whatsoever. This report covers government purchasing activities for the period January to December 2004 inclusive. 

2. Procurement Policy Framework

The main features of the Government of Canada's procurement policy framework in effect in 2004 that are relevant to the Purchasing Activity Report are as follows:

2.1 The objective of government procurement contracting is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people.

2.2 Government contracting shall be conducted in a manner that will:

(a) stand the test of public scrutiny in matters of prudence and probity, facilitate access, encourage competition, and reflect fairness in the spending of public funds;

(b) ensure the pre-eminence of operational requirements;

(c) support long-term industrial and regional development and other appropriate national objectives, including aboriginal economic development;

(d) comply with the government's obligations under the North American Free Trade Agreement, the World Trade Organization – Agreement on Government Procurement and the Agreement on Internal Trade.

2.3 Appendix A of the Treasury Board Contracting Policy defines a competitive contract as a contract where the process used for the solicitation of bids enhances access, competition and fairness and assures that a reasonable and representative number of suppliers are given an opportunity to bid by:

EITHER

(A) giving public notice, using electronic bidding methodology, possibly supplemented by traditional bidding procedures, of a call for bids for a proposed contract or of an intention to award a contract to a pre-identified contractor (a directed contract advertised by an Advance Contract Award Notice – ACAN), in accordance with limited tendering reasons set out in the trade agreements, or in accordance with the exceptions to bidding set out in section 6 of the Government Contracts Regulations (GCRs)

and where

1. in the case of a call for bids, the lowest bid or the bid that offered the best value, as set out in the evaluation criteria in the bid solicitation and as determined by the contracting authority, was accepted;

2. in the case of a call for bids where only one bid compliant with mandatory criteria set out in the bid solicitation was received, fair value to the Crown, as determined by the contracting authority, was obtained; or

3. in the case of an ACAN, no valid statement of capabilities is received within the fifteen calendar day posting period.

OR

(B) giving public notice, using traditional bidding procedures (such as a suppliers' list, etc.) and in a manner that is consistent with generally accepted trade practices, of a call for bids for a proposed contract,

and where

1. in the case of a call for bids, the lowest bid or the bid that offered best value, as set out in the evaluation criteria in the bid solicitation and determined by the contracting authority, was accepted, or

2. in the case that only one bid compliant with the mandatory criteria set out in the bid solicitation was received, fair value to the Crown, as determined by the contracting authority, was obtained.

2.4 Section 6 of the Government Contracts Regulations specifies that a contracting authority may enter into a contract without soliciting bids where

(a) the need is one of pressing emergency in which delay would be injurious to the public interest;

(b) the estimated expenditure does not exceed

(i) $25,000,

(ii) $100,000, where the contract is for the acquisition of architectural, engineering and other services required in respect of the planning, design, preparation or supervision of the construction, repair, renovation or restoration of a work, or

(iii) $100,000, where the contract is to be entered into by the member of the Queen's Privy Council for Canada responsible for the Canadian International Development Agency and is for the acquisition of architectural, engineering or other services required in respect of the planning, design, preparation or supervision of an international development assistance program or project;

(c) the nature of the work is such that it would not be in the public interest to solicit bids; or

(d) only one person is capable of performing the contract.

3. Reporting Entities

The reporting entities targeted in the report are the contracting authorities, as defined in the Government Contracts Regulations and the Financial Administration Act (FAA):

A. The appropriate Minister, as defined in paragraph (a), (a.1) or (b) of the definition "appropriate Minister" in section 2 of the FAA, as follows:

(a) with respect to a department named in Schedule I, the Minister presiding over the department,

(a.1) with respect to a division or branch of the public service of Canada set out in column I of Schedule I.1, the Minister set out in column II of that Schedule,

(b) with respect to a commission under the Inquiries Act, the Minister designated by order of the Governor in Council as the appropriate Minister.

B. A departmental corporation named in Schedule II to the FAA, or

C. The National Capital Commission (listed in Schedule III).

The data for the Canada Border Services Agency only covers the period April 1 - December 31, 2004, since the agency did not perform any contracting activities prior to April 1, 2004.  In accordance with subsection 41(2) of the Financial Administration Act, the Government Contracts Regulations do not apply to Canada Revenue Agency.  However, the agency has voluntarily provided data on its purchasing activity in year 2004.

4. Exclusions under Government Contracts Regulations

The Government Contracts Regulations apply to all contracts except

(a) a contract entered into by the National Film Board;

(b) a contract for the construction of buildings entered into under the Veterans' Land Act;

(c) a contract entered into under the Indian Act that involves Indian moneys as defined in that Act;

(d) subject to section 4 of those Regulations, a contract for the performance of legal services entered into by or under the authority of the Minister of Justice,

(e) a contract for the fit-up of an office or a residential accommodation where the contract for fit-up is part of a transaction authorized pursuant to the Federal Real Property Act or the regulations made thereunder; or

(f) arrangements entered into under an Interchange Canada Agreement.

In addition, the Treasury Board (TB) has given approval to exempt the Canadian Security Intelligence Service from TB reporting requirements.

5. Definition of Terms

The Government's Contracting Policy includes a series of definitions that serve as the basis for the categories found in the report. 

Advance contract award notice (ACAN) - An ACAN allows departments and agencies to post a notice, for no fewer than 15 calendar days, indicating to the supplier community that it intends to award a good, service or construction contract to a pre-identified contractor. If no other supplier submits, during the 15-calendar day posting period, a statement of capabilities that meet the requirements set out in the ACAN, the competitive requirements of the government's contracting policy have been met. Following notification to suppliers not successful in demonstrating that their statement of capabilities meets the requirements set out in the ACAN, the contract may then be awarded using the Treasury Board's electronic bidding authorities.  If other potential suppliers submit statements of capabilities during the 15-calendar day posting period, and meet the requirements set out in the ACAN, the department or agency must proceed to a full tendering process on either the government's electronic tendering service or through traditional means, in order to award the contract.

Electronic bidding – a method of procurement that promotes suppliers' access to, and transparency in, the procurement process and facilitates the Crown's receipt of best value, by using:

(a) public notice by means of an approved electronic information service of procurement opportunities (e.g., MERX);

(b) public notice by means of an electronic information service of proposed directed procurements by means of an Advance Contract Award Notice (ACAN);

(c) public notice in the "Government Business Opportunities" publication; or

(d) such other procurement methods as may be approved by the Treasury Board.

Traditional competitive – a method of procurement that involves giving public notice, using traditional bidding procedures and in a manner that is consistent with generally accepted trade practices, of a call for bids for a proposed contract.

6. Amendments

In 2004, the total value of positive amendments (i.e., those that result in an increase in the contract value) was $3,347 million.  The total value of negative amendments (i.e., those that result in a decrease in the contract value) was $730 million.  The total value of net amendments was $2,617 million.

7. Acquisition Cards

The above data do not include transactions using acquisition cards.  Those cards are normally used for low dollar value purchases.  In 2004, there were 1.7 million acquisition card transactions for a total value of $555.8 million.

8. Other Excluded Items

The data do not include expenditures for travel, hotel accommodation, hospitality and petty cash.