ARCHIVED - Report on Government Contracting by Departments and Agencies for Fiscal Year 1994-95 (with 1993-94 data for comparison)
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Report on Government Contracting by Departments and Agencies for Fiscal Year 1994 95 (with 1993-94 data for comparison)
August 22, 1997
Table of Contents
Synopsis of 1994-95 Contracting Data
Appendix A - Total Government Contracting Activity in Excess of the Thresholds
Background
1. On May 31, 1990, the Treasury Board approved a requirement for a report on contracting by departments and agencies. The purpose of this reporting requirement is to enable the Secretariat:
(a) to evaluate trends to help assess whether departments and agencies are complying with contracting policies, especially the requirement for competitive contracting, and
(b) to advise the Treasury Board on this evaluation as well as on the total contracting activity throughout the Government.
2. Most contracts which are awarded by departments and agencies are subject to the Government Contracts Regulations (GCRs) and the related contracting policy. Certain contracts are also subject to the obligations of trade agreements. During fiscal year 1994-95, the trade agreements in effect were:
(a) the General Agreement on Tariffs and Trade (GATT) - which only applied to contracts for certain goods whose value was in excess of 130,000 Special Drawing Rights units (CAN$223,000), and
(b) the North American Free Trade Agreement.(NAFTA) - which applied to goods and services valued in excess of US$50,000 or CAN$63,700 and construction valued in excess of US$6.5 million or CAN$8.2 million. Between Canada and the U.S.A., the threshold for goods was US$25,000 or CAN$31,800.
3. The GCRs, GATT and NAFTA all emphasize the use of competitive solicitation in government procurement, although each recognizes legitimate circumstances (the "exceptions") where this requirement may be waived.
4. The GCRs, for example, allow for awarding 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) $30,000 (recently reduced to $25,000), or
(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 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.
5. All departments and agencies have been sent the attached table to enable them to compare their results with those throughout the government and to encourage them to increase their competitive solicitation.
Synopsis of 1994-95 Contracting Data
6. In fiscal year 1994-95, the total value of contracts awarded was $7.4 billion ($8.9 billion in 1993-94). Of this amount, $922 million was for contracts below $25,000 (1993-94, $1.2 billion was for contracts below $30,000), and $6.4 billion represented 26,900 contracts valued at $25,000 and above (1993-94, $7.7 billion represented 27,900 contracts valued at $30,000 and above).
7. Of the 26,900 contracts awarded in 1994-95 valued at $25,000 and above, the proportion of competitive contracts plus advance contract award notices (ACANs), was 66% by number and 61% by value. ACANs are contracts awarded without competition after notice of the proposed award has been placed on the open bidding service. ACANs are deemed competitive under Treasury Board policy, provided no challenge to the non-competitive award is received. Data for 1994-95 includes only ACANs processed by PWGSC on behalf of departments and for its own programs. ACANs were a new initiative for 1994-95, and departments and agencies were not asked to submit data on ACANs processed by themselves for 1994-95.
8. In 1993-94, for contracts valued at $30,000 and above, the proportion of competitive contracts was 63% by number and 64% by value.
9. It should be noted that the data for 1994-95 are not directly comparable with those of earlier years because of the difference in cut-offs ($25,000 for 1994-95 and $30,000 for previous years) and because of the introduction of ACANs. The dollar threshold over which competitive solicitation had been required by the Government Contracts Regulations was $30,000, but a recent Governor in Council decision reduced the threshold to $25,000.
10. Departments were not asked to provide contract amendment data for 1994-95. In addition, amendment data on most of the real property contracting activities of PWGSC (those that, until PWGSC was created in 1993, had been within the former Public Works Canada) are not available. Also, the amendment data reported are only those that increased the value of the original contracts.
11. What is available, therefore, is a limited data base consisting of information on positive value amendments issued in 1994-95 by the SSC side of PWGSC for goods, services and some construction both for its own programs and on behalf of its clients.
12. Under the limited data base currently available for amendments, the number of amendments for contracts below $25,000 changed from 8,199 in 1993-94 (10.8% of 76,040 original contracts) to 7,585 in 1994-95 (12.2% of 62,032 original contracts). The value of amendments changed from $45.2 million in 1993-94 (8.9% of $506.0 million worth of original contracts) to $43.0 million in 1994-95 (9.4% of $457.9 million worth of original contracts). Hence, for contracts below $25,000, there was a slight increase in the proportion of amendment activity in 1994-95, both in number and in dollar value.
13. For contracts $25,000 and above, the number of amendments changed from 4,758 in 1993-94 (26.1% of 18,237 original contracts) to 4,547 in 1994-95 (26.7% of 17,039 original contracts). The value of amendments changed from $1.83 billion in 1993-94 (31.5% of $5.81 billion worth of original contracts) to $1.15 billion in 1994-95 (20.6% of $5.61 billion worth of original contracts). Hence, for contracts $25,000 and above, there was a significant decrease in the proportion of amendment activity by value in 1994-95, although there was no appreciable change in amendment activity between the two years by number.
14. Hence, the only notable change in amendment activity in 1994-95 was that, for contracts $25,000 and above, there was a significant decrease in the proportion of amendment activity by value.
Agreement on Internal Trade
15. The Agreement on Internal Trade came into effect on July 1, 1995. It applies to the procurement activities of the Government of Canada, the provinces and the territories. The thresholds are CAN$25,000 for goods and CAN$100,000 for services and construction.
Enquiries
16. Enquiries concerning this report may be addressed to the Contract, Project and Risk Management Division, Treasury Board Secretariat, 140 O'Connor Street, 10th floor, Ottawa, Ontario K1A 0R5, telephone (613) 957-2432, fax (613) 952-1381.
Appendix A - Total Government Contracting Activity in Excess of the Thresholds
