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Federal procurement policy changes that will impact your businesses

Climate change may be the hot topic, but procurement policies directly affect a company’s bottom line

The federal government is leading by example and updating its procurement policies which will affect all departments and help SMEs compete for business. Photo by A Yee

With the signing of the Paris Agreement and the introduction of carbon pricing to Canada a lot of CEEA’s work over the past year has targeted NRCan and the Ministry of the Environment and Climate Change. But there is another department not to ignore – Public Services and Procurement Canada. In fact CEEA has been at the forefront of discovering what are the latest developments in procurement policies at the federal level because we know it directly affects how the government will buy our members’ products and services. It is after all the central purchasing agent and real property manager for the federal government. Now the government is leading by example and undergoing a modernization of its procurement policies.

Minister of Public Services and Procurement Judy Foote received a mandate letter that included modernizing the procurement process so it would alleviate administrative burdens, and adopt green and social procurement. In addition, the department will work with Infrastructure and Communities to conduct an inventory of all available federal lands and buildings that could be repurposed for affordable housing in communities. The procurement process is so important that it now has an assistant deputy minister and its parliamentary secretary, MP Steve MacKinnon, is regularly attending and asking questions at the stakeholder meetings which began two weeks ago in Ottawa. The discussion include addressing product standards, regulations, the realities of manufacturing, and services. After Ottawa they will go across Canada to meet with other stakeholder groups.

Procurement affects major government departments

This procurement modernization process means they are working with other departments and agencies, so not only Infrastructure, but also Defense Construction Canada and NRCan’s Federal Buildings Initiative which will provide advice on what products and processes will successfully assist federal departments and agencies in reducing their energy consumption and greenhouse gas emissions. Treasury Board is also an integral part of this process and is watching carefully as outcomes from the modernization process will help ensure the government of Canada is meeting its targets – including those for climate mitigation.

Less bureaucracy and faster turn-arounds will increase competition

The good news is that everything is on the table. This includes looking at the low risk/low money contracts that affect the way many contractors interact with the government. Traditionally contracts under $25,000, for things such as lightbulbs or HVAC servicing, where unattractive for small companies to bid because the highly structured process took over two months to complete and involved hours of work on the part of the SMEs. To improve this time-cost ratio they are looking for ways to decentralize the process and reduce it to a 10-day period. The idea is to make it rules-based or outcomes based so departments can handle the process themselves but with clear guidelines. No doubt the streamlining of paper used and time spent will open the doors for more companies to compete for government business.

New procurement policies will also involve looking at the social economic impact of procurement, not just the lowest price. Up until now the lowest cost has been the rule of thumb. Now there are other important considerations as well, such as whether climate goals are being met or if there is diversification, innovation or Aboriginal participation. These are all possible areas to take into account, along with the cost, when looking at competitive bids.

Government needs to be trained in procurement

The process has also revealed how departments themselves want to modernize and better understand procurement. Infrastructure and Communities is keen to learn more and admits it knows little about climate mitigation and energy efficiency. So while the consultations are engaging the private sector, it is also educating different government departments about the process, which is a positive development.

Public Services and Procurement Canada will be consulting across the country and would be happy to hear your input. You can reach out directly to me at elizabethmcdonald@energyefficiency.org if you would like me to forward your input directly. This is a great opportunity for the energy efficiency industry.

Posted February 27, 2017

McDonald Interior Colour 2014

Elizabeth McDonald is president of CEEA

 

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