ARCHIVED - Report on Government Contracting by Departments and Agencies for Calendar Year 1995
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Report on Government Contracting by Departments and Agencies for Calendar Year 1995
August 22, 1997
Table of Contents
Synopsis of 1995 Contracting Data
World Trade-Organization - Agreement on Government Procurement
Appendix 1 - Annual Contracting Activity Report - Calendar Year 1995 (Downloadable only)
Appendix 2 - Overview of Government Contracting Activity
Report on Government Contracting by Departments and Agencies for Calendar Year
1995
Background
1. The Treasury Board's "Report on Government Contracting by Departments and Agencies for Calendar Year 1995" enables the Secretariat to assess, to some extent, whether departments and agencies are complying with contracting policies, especially the requirement for competitive contracting. The report also provides the Board with advice on this assessment and on the total contracting activity throughout the government.
2. Most contracts that 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 the 1995 calendar year 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 a 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 to 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 to 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;
(d) only one person is capable of performing the contract; or
(e) printing and related services costing less than $100,000 and procured from CCG Inc.
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 1995 Contracting Data
6. In calendar year 1995, the total value of contracts awarded and amended was $9.4 billion. Of this amount, for contracts below $25,000, $955 million was committed to contracts and $41 million to amendments and, for contracts valued at $25,000 and above, $7.2 billion was committed to contracts and $1.2 billion to amendments.
7. Of the 30,673 contracts awarded in 1995 valued at $25,000 and above, the proportion of competitive contracts plus Advance Contract Award Notices (ACANs) (minus amendments), was 66% by number and 65% by value. ACANs are contracts awarded without competition after notice of the proposed award has been placed on the Open Bidding Service (OBS) or in the Government Business Opportunities (GBO). ACANs are deemed competitive under the Treasury Board policy, provided no challenge to the non-competitive award is received. For Fiscal Year 1994-95, of the contracts valued at $25,000 and above, the proportion of competitive contracts and ACANs was 66% by number and 60% by value. Although, it is difficult to compare the 1995 calendar year with the 1994-95 Fiscal Year, the data indicates that there has been a slight improvement in the competitive process.
8. It should be noted that the data for 1995 is not directly comparable with those of earlier years because of the change from a fiscal year reporting to a calendar year reporting. Furthermore, the dollar threshold over which competitive solicitations had been required by the Government Contracts Regulations was $30,000, but a recent Governor in Council decision reduced the threshold to $25,000.
9. Departments were not asked to provide contract amendment data for 1995. What is available, therefore, is a limited database on contracting amendments consisting of information on positive value amendments processed in 1995 (regardless of the date of award of the original contract), for contracts issued by the former Supply and Services Canada.
10. Under the limited database currently available for amendments, the number of amendments for contracts valued at $25,000 and above was 4,201 representing $1.2 billion. For contracts valued at $25,000 and above, amendments represented 14% of the total number and 14% of the total value committed by Public Works and Government Services Canada.
11. Under the Government Contracts Regulations, contracts below $25,000 are not required to be competitively let, although competition is used in many cases to effect costs savings. During the 1995 calendar year, $996 million was committed to contracts below $25,000. Also, during this year, contract amendments represented only 4.1% of the total value of contracts less than $25,000, which is commendable.
Agreement on Internal Trade
12. 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.
World Trade-Organization - Agreement on Government Procurement
13. The World Trade Organization - Agreement on Government Procurement (WTO-AGP) is a multilateral agreement which aims to secure greater international competition for government procurement. The WTO-AGP came into effect on January 1, 1996. Member countries include Canada, the European Union, the United States, Japan, Korea, Israel, Norway, and Switzerland. The WTO-AGP replaces the General Agreement on Tariffs and Trade (GATT) Government Procurement Code by extending the previous coverage of goods to include services and construction. The national treatment and non-discrimination provisions and procurement procedures of the WTO-AGP are similar to those of NAFTA.
Enquiries
14. Enquiries concerning this report may be addressed to the Contract, Project and Risk Management Division, Treasury Board Secretariat, 140 O'Connor Street, 10th Floor East Tower, Ottawa, Ontario K1A 0R5, Telephone (613) 957-3789, Fax (613) 952-1381.
Appendix 1 - Annual Contracting Activity Report - Calendar Year 1995
Appendix 2 - Overview of Government Contracting Activity
