Ontario launches new agency to centralize government procurement

On November 16, the Ontario Government announced the launching of a new agency, Supply Ontario, to centralize government procurement.

This new supply chain agency is a result of Ontario Onwards: Ontario’s COVID-19 Action Plan for a People-Focused Government, which includes more than 30 projects that aim to change the way people and businesses interact with government.

In general, projects in the Action Plan fall into four categories:

  • Increasing digital access to government services
  • Reducing red tape and simplifying policies and procedures
  • Improving government purchasing
  • Creating responsive and flexible public services

Supply Ontario aims to address the inadequacies in government processes revealed by COVID-19. Particularly, the acquisition of PPE and critical supplies and equipment (CSE) were delayed due to the fragmented and bureaucratic nature of Ontario’s supply chain system.

Supply Ontario aims to resolve this by:

  • Deliver the best value by sourcing high-quality goods at scale to serve the public interest in a financially responsible way.
  • Stabilize access to critical products, including PPE.
  • Stimulate job creation and economic growth by purchasing Ontario-made goods.
  • Drive innovation of emerging technologies.
  • Connect small businesses and entrepreneurs to government and its customers by acting as a first purchaser for emerging technologies and paving pathways to the marketplace to drive innovation in Ontario.

In the short-term, the agency will focus on:

  • Stabilizing supply and delivering PPE and CSE to health care providers and shared services organizations.
  • Working with partners across sectors to ensure existing services and products are not disrupted.
  • Developing a productive procurement process and build the necessary infrastructure.
  • Supporting education-sector procurement of PPE and CSE.

In the longer term, Supply Ontario will act as a self-sustaining and integrated supply chain across the Ontario Public Service, broader public sector and health sector. By unifying related services under one organizational umbrella, the Ontario government hopes to respond to any future events in a rapid, effective, and safe manner.

OSPE hopes that the creation of this agency will improve government purchasing, especially when it comes to PPE. Engineers also show positive sentiment towards the potential of driving innovation through Supply Ontario.

Despite these positive first steps, Ontario’s procurement process still requires deeper, wide-spread reform.

The current process still does not fully support the goal of building infrastructure that stabilizes procurement workflow while putting the health and safety of Ontario citizens first. While addressing some concerns, OSPE believes there are additional issues that must be remedied.

OSPE believes that the government must ensure all provincial infrastructure projects adhere to the following principles:

a.     Use of a Qualifications Based Selection (QBS) framework

Given Ontario’s current economic and fiscal situation, it is essential that all public infrastructure investments be transparent and return the greatest possible value for money. By adopting Qualifications-Based Selection (QBS) as its best practice for the selection of consultants, the government can realize the greatest possible value for investment in its infrastructure projects. 

QBS is a competitive, sound, and fair process that selects those that are the best qualified. Selecting a consultant is one of the most important decisions a client makes. To a great degree, the success of a project depends on securing the professional services firm with the most experience and expertise that best fits the project. Experience demonstrates that selecting a consultant through QBS ultimately provides the best value for money.

b.     Effectively report life-cycle costing

It is essential that all infrastructure projects conducted by the province properly report and consider life-cycle costing. In order to gain the maximum value for money, all costs incurred over the whole life span of infrastructure projects must be estimated. This will ensure that taxpayer’s money is used for infrastructure projects that are able to produce multigenerational benefits for most Ontarians at a proper cost.

c.     Consider diversity and inclusion

The provincial government should implement supply chain diversity policies. This will enable the province to use procurement to advance equity, diversity, and inclusion. The benefits of a diverse supply chain are well documented in research done by the Centre for Diversity and Inclusion and the Conference Board of Canada. Small to medium enterprises owned by women and members of other equity seeking groups provide value to large organizations, reduce the risk of streamlined supplier pipelines, and lead to economic growth. The federal government has committed to increasing the participation of under-represented groups and Indigenous businesses in federal procurement, while cities like Toronto have established social procurement programs with similar objectives. It is imperative that the provincial government establish this to ensure that engineering companies led by women and members of equity seeking groups are provided with access to public procurement opportunities.

While commending the government for the positive first steps demonstrated by Supply Ontario, OSPE will continue to advocate for additional reformations to the procurement process. Selection criteria, transparency, forward-thinking, and a promotion of equity, diversity, and inclusion, remain keys to the growth of Ontario.

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