A Brief Look at Trade Agreement Obligations
There appears to be some confusion amongst colleagues and clients about trade agreement obligations for disclosure of RFx weighted criteria. This is largely a concern on the demand side for the public sector, although the private sector responds to bid documents from the supply side. This article will try and provide clarity on the issue.
One policy out in the municipal sector, says that they will include the criteria but not the weighting in RFx documents. Another City posted their RFx with no reference to the weighting on the criteria, under the evaluation process. I inquired as to why and was advised “we get better proposals and then decide which one to go with.” Really? Really! This inconsistency is confusing for potential bidders and may be in violation of several trade agreements.
The respective spending thresholds give us some guidance. Under the CFTA for goods and services >$105,700; and on construction >$264,000, the evaluation criteria and weighting must be stated. This is covered under the CFTA Article 509.7
Under the NWPTA, the reference to criteria and weighting is silent. No mention of criteria at all. The spending thresholds for the NWPTA is >$75,000 for goods and services; and >$200,000 for construction.
If a city wanted to award a 3-year service agreement for landscaping services, they have some options to consider. If the city has a social procurement policy, the options could be expanded. First issue, what is the total value of the 3-year contract?
Option 1.
If the contract is worth ≤ $2900 per month, they would need to comply with NWPTA, and no weighting of criteria is mandated. If the estimate is inadequate, they may inadvertently reach the CFTA threshold. Unsuccessful proponents could make a serious challenge on the contract award and the evaluation process. The ceiling on $2900 per month over 3-years is $104,400, which is less than the $105,700 limit.
Option 2.
If the contract was ≥ $2937 per month, they would need to comply with CFTA and all its requirements. The ceiling for the contracted value would be $105,732 over the 3-year contract. The total value of the contract determines which trade agreement applies, not annualized values.
Option 3.
If the city wanted to negotiate with a social enterprise, they would be exempt from all trade agreements obligations. Spending thresholds do not apply. The NWPTA and the CFTA have exceptions when dealing with people facing barriers to employment, as an example:
NWPTA Part V C. GOVERNMENT PROCUREMENT
2. Procurements:
(a) from philanthropic institutions, prison labour or persons with disabilities
CFTA 504 s. 11 (v)
Non-Application
- This chapter does not apply to…
(i) procurement of goods and services…
(v) from philanthropic institutions, non-profit organizations, prison labour or natural persons with disabilities
Summarily, the CFTA is clear that criteria and weighting must be made public prior to the release of an RFx. The NWPTA does not state that specifically, however, best practices in public sector procurement would be to disclose the criteria and weighting. This ensures the process is fair, open and transparent which leads to better value for money. The evaluation process, including the criteria and the respective weighting should be fully disclosed before approaching the market. This disclosure of the process does not require additional work for the procurement team.
With the potential for trade agreement challenges and loss of stakeholder confidence if not disclosed, perhaps you won’t mind weighting after all.