ARCHIVED - 2002 Purchasing Activity Report

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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 is guided by modern comptrollership and founded in Results for Canadians: A Management Framework for the Government of Canada. This framework sets a clear direction for renewing government management based on: citizen focus, values, results and responsible spending. Procurement reform supports the Government's Speech from the Throne commitments to promote business practices that will build a dynamic economy.

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 MERX at http://www.merx.com/. Those who wish to find out more about how the Government of Canada buys should contact Contracts Canada at http://www.contractscanada.gc.ca/.

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2002 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	280,220		559,744
	Electronic bidding (Note 2.3 & 5)	3,357		1,762,021
	Traditional competitive (Note 2.3 & 5)	1,195		444,986
	ACANs (Note 2.3 & 5)	1,787		608,024
	Competitive awards (Note 2.3)	6,339		2,815,031
	Net amendments	-		493,556
	Competitive including amendments	6,339	88.4%	3,308,587	84.5%
	Non-competitive awards (Note 2.3)	830		558,997
	Net amendments	-		47,890
	Non-Competitive including amendments	830	11.6%	606,887	15.5%
	Subtotal Contracts $25,000 and above	7,169	100.0%	3,915,474	100.0%
	Total of All Goods Contracts	287,389		4,475,218
	Proportion of All Contracts		65.5%		34.9%
Services	Contracts below $25,000, including amendments	131,311		716,613
	Electronic bidding	4,537		3,139,970
	Traditional competitive	4,105		469,203
	ACANs	1,241		525,220
	Competitive awards	9,883		4,134,393
	Net amendments	-		1,477,917
	Competitive including amendments	9,883	77.0%	5,612,310	81.5%
	Non-competitive awards	2,953		501,018
	Net amendments	-		775,895
	Non-Competitive including amendments	2,953	23.0%	1,276,913	18.5%
	Subtotal Contracts $25,000 and above	12,836	100.0%	6,889,223	100.0%
	Total of All Service Contracts	144,147		7,605,836
	Proportion of All Contracts		32.8%		59.3%
Construction	Contracts below $25,000, including amendments	5,449		28,190
	Electronic bidding	1,229		585,087
	Traditional competitive	548		48,705
	ACANs	58		12,785
	Competitive awards	1,835		646,577
	Net amendments	-		54,681
	Competitive including amendments	1,835	93.6%	701,258	98.3%
	Non-competitive awards	126		12,942
	Net amendments	-		-593
	Non-Competitive including amendments	126	6.4%	12,349	1.7%
	Subtotal Contracts $25,000 and above	1,961	100.0%	713,607	100.0%
	Total of All Construction Contracts	7,410		741,797
	Proportion of All Contracts		1.7%		5.8%
All Contracts	Contracts below $25,000, including amendments	416,980		1,304,547
	Electronic bidding	9,123		5,487,078
	Traditional competitive	5,848		962,894
	ACANs	3,086		1,146,029
	Competitive awards	18,057		7,596,001
	Net amendments	-		2,026,154
	Competitive including amendments	18,057	82.2%	9,622,155	83.5%
	Non-competitive awards	3,909		1,072,957
	Net amendments	-		823,192
	Non-Competitive including amendments	3,909	17.8%	1,896,149	16.5%
	Subtotal Contracts $25,000 and above	21,966		11,518,304
Total Contract Awards including Net Amendments		438,946	100.0%	12,822,851	100.0%
Variance		5	0.001%	311	0.002%
Adjusted Total Awards including Net Amendments		438,951		12,823,162

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Notes to 2002 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 2002. 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 http://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 http://www.tbs-sct.gc.ca/rma/database/aevepp-eng.asp.

Information on the Procurement Strategy for Aboriginal Business can be found at the Department of Indian Affairs and Northern Development web site http://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 2002 inclusive.

2. Procurement Policy Framework

The main features of the Government of Canada's procurement policy framework in effect in 2002 that are relevant to the Preliminary 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:

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

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):

In accordance with subsection 41(2) of the Financial Administration Act, the Government Contracts Regulations do not apply to Canada Customs and Revenue Agency. However, the agency has voluntarily provided data on its purchasing activity in year 2002.

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 2002, the total value of positive amendments (i.e., those that result in an increase in the contract value) was, $3,263.1 million. The total value of negative amendments (i.e., those that result in a decrease in the contract value) was $262.4 million. The total value of net amendments was $3,000.7 million.

7. Acquisition Cards

The above data do not include transactions using acquisition cards. Those cards are normally used only for low dollar value purchases. In 2002, there were 1.60 million acquisition card transactions for a total value of $559.6 million.

8. Other Excluded Items

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