Planning

Although all phases of the procurement cycle must be effectively managed the planning phase is the most critical. Planning identifies the need and describes the project or activities required in order to proceed to procurement. It ensures full understanding of the:

  • Rationale for contracting;
  • Requirements; and
  • Measurements that will be used for future decision making.

Implementation of the contract is easier when the procurement is well planned. Planning includes being able to understand and describe the:

  • Opportunity or problem that needs to be fixed; and
  • Services and/or goods that need to be delivered.

Only when these requirements are clear – can the Contract Manager establish the team and resources for the procurement. Procurement Planning is outlined in CPPM 6.3.1.

Collaborative planning can be used to gather input and better understand community needs and priorities prior to initiating the solicitation process or contract award.

Service provider participation in planning forums and processes is an effective way to coordinate and improve services. Collaborative planning with service providers can with developing the contract terms by identifying:

  • The characteristics of the population to be served;
  • The outcomes of the service; and
  • How success can be measured.

Ministry Actions to Collaborative Planning

If the ministry identifies a project that would benefit from collaborative planning, staff may take a number of steps to get the process going, including:

  • Consulting a cross-section of service providers and being open to new service providers and new solutions
  • Engaging service providers early. To determine service provider or community interest, possibly use a Request for Expressions of Interest (RFEI)
  • Identifying stakeholders with an interest in collaborative planning and exploring the community’s needs; this may be useful for program or service design in particular, and may include a broader selection than just service providers
  • When gathering information, consider using community consultation, including town halls, teleconferences, ministry and other websites, and/or use a Request for Information (RFI); this may be done to understand pricing, community and/or needs and consider potential cost restrictions
  • Clearly establishing and sharing the purpose, intent and approach to the planning with participants, and describing the frequency and scope for discussion, time frames and participation requirements, responsibilities, and how input will be used
  • Allocating adequate resources to achieve the goals (e.g., staff and financial)
  • Woring together and respecting the expertise and involvement of all parties

Service Provider Initiated Collaborative Planning

Service providers may approach the ministry to initiate collaboration. This may happen inside or outside of a contracting relationship. Such conversations may trigger planning for a new service, a new or modified contract, a solicitation, or may result in no action.

If a service provider would like to contact the ministry to initiate collaboration and they:

  • Have a contract – they should talk to the Contract Manager
  • Do not have a contract  – they should contact the Program Director or Manager

Service providers should note that sharing a service need with the ministry and participating in subsequent service planning does not guarantee their receiving a contract.

(see Terms of Participation – Confidentiality and Conflict of Interest)

It is best practice to advertise contracting opportunities. Government uses advertising to:

  • Meet legislative requirements;
  • Build capacity to deliver service in the community;
  • Be fair, open and transparent; and/or
  • Get the best price, service provider, and/or solution.

Advertising may be done through different venues, such as:

  • Trade journals; or
  • Pre-qualified lists; or
  • Most commonly BC Bid®.

Contract Managers may wish to connect with the community for suggested venues to market opportunities. This approach may be especially useful when the ministry wants to target service providers that may be in a position to provide culturally appropriate programs and services.

The provincial government created the BC Bid® site to advertise its contract opportunities.  Service providers use it to search for and respond to opportunities at no cost!  Service providers may also sign up for e-Service to receive targeted e-mail notifications when new opportunities are posted.


What May Trigger the Solicitation Process?

  • A service is required or new service is being developed
  • The service cannot be delivered internally by the ministry
  • The service is expected to have better outcomes if delivered by a service provider (e.g. Aboriginal youth services delivered through an Aboriginal agency);
  • A contract has ended and the service is still required
  • The contract service deliverables have substantially changed
  • In order to obtain more economical, efficient, or effective service

What May Not Trigger the Solicitation Process?

  • There are exceptional conditions, such as contracting with another government agency, that meet the direct-award exemptions as outlined in CPPM 6.3.3a
  • The original solicitation included an Option to Renew as part of the original process
  • A service innovation is proposed for an existing contract that potentially improves the quality, efficiency or effectiveness of the services, but does not significantly change the intended outcomes of the service or the value
  • A Corporate Supply Arrangement (CSA) is in place for those specified services

(see Terms of Participation – Confidentiality and Conflict of Interest)


The Canada Revenue Agency (CRA) has a guide to identifying employee/employer relationships. Government policy states in CPPM 6.3.1.7 that a contract must not result in the establishment of an employer/employee relationship.

Every service provider engaged by the government must be independent and operating at arm's length from government. Ministries cannot use long-term contracts instead of hiring employees. If administrative resources are needed for a maximum of 30 days, a Corporate Supply Arrangement is available for this purpose.

The avoidance of employer/employee relationships is important due to the significant labour relations implications, potential government liability, and possible consequences for both the employer and employee under the Income Tax Act, Canada Pension Plan, Employment Insurance, and the Workers Compensation Act. If audited, CRA may determine that a service provider is actually an employee and require expensive back payments from both the ministry and the service provider.


Could a Service Provider be an Employee?

Yes - having a signed contract does not prevent an employee/employer relationship. This must be avoided! Service providers must have the autonomy to:

  • Determine how and when work is done
  • Determine the method and amount of pay
  • Work for other payers

(see Terms of Participation – Confidentiality and Conflict of Interest)


Where there is a potential conflict of interest, ministry staff must notify their supervisor or manager, who will determe the best approach to the situation. This may be an actual conflict or just the perception of one. Conflict of Interest is outlined in the Standards of Conduct for Public Service Employees.


Example

A ministry employee:

  • Provides preferential treatment to a service provider, in which the employee – or relative or friend of the employee – has an interest – financial or otherwise
  • Allows a potential service provider to participate in the development of a Request for Proposals and subsequently submit a proposal to the solicitation; this is different from asking the service provider for information that is used by the employee to develop the Request for Proposals
  • Benefits from, or is reasonably perceived by the public to have benefited from, the use of information acquired solely by reason of the employee's employment
  • Requests or accepts from a potential or current service provider a personal gift or benefit – either direcly or indirectly – that arises out of their employment in the public service, other than:
    • The exchange of hospitality between persons doing business together
    • Tokens exchanged as part of protocol
    • The normal presentation of gifts to persons participating in public functions
    • The normal exchange of gifts between friends

Further examples and information are provided in the Standards of Conduct for Public Service Employees Engaged in Government Procurement Processes.


Although conflict of interest can occur at any point in the procurement cycle, it should especially be considered by members of the evaluation committee during a solicitation, and by the Expense Authority and negotiator(s) prior to negotiations and contract signing.

(see Terms of Participation – Confidentiality and Conflict of Interest)

The following are a few of the tools that can be used in planning:

Business Case

A business case provides justification for undertaking a project, program initiative – or service. The business case documents the requirements, allowing a decision to be made about whether to proceed or not proceed by the program director or delegate. A business case consists of the following items:

  • Need for service;
  • Risks associated with the service and acquiring the service
  • Feasibility to perform the services internally or externally
  • Alternative solutions to provide the service
  • Marketplace capabilities
  • Cost/benefit of each alternative solution
  • The sourcing plan to acquire the service
  • The implementation approach to acquire the service
  • The monitoring plan
  • The budget for the services

Cost/Benefit Justification

A cost/benefit justification compares the costs versus the savings from the program and operational improvements. A cost/benefit justification includes the following:

  • List of possible alternatives
  • Comparison of the cost to contract out to the cost of providing services in-house, if the resources are available
  • A comparison of the costs versus the potential benefits

Example:

For service contracts greater than $100,000, the ministry must ensure that a cost/benefit justification exists for the contract before taking steps to find a service provider.
CPPM 6.3.1.5


The cost/benefit justification may be a stand-alone document or an integral portion of a more comprehensive document, such as a business case. The Program Director/Manager is accountable.

Contract Approvals

Ministry staff must ensure approvals are in place prior to advertising for an opportunity or awarding a contract. This may take the form of an approved business case or cost/benefit justification.

The Contract Administrator facilitates the contract approval process for the Contract Manager. Approvals are based on the ministry’s signing authority matrix.

Once internal approvals are in place, the contract can be sent to the service provider for signature. Once the service provider signs and returns the contract, the Ministry Expense Authority may then sign.

Subcontractors

Subcontractors may be required to deliver services as a means to reduce overall contract costs or expand the type or volume of work beyond the primary service provider's ability. Service providers require the ministry's prior written permission in order to subcontract any of the work assigned under a contract.

Subcontractors are identified in the Ministry Service Agreement in Schedule C. The Contract Manager needs to be confident that the proposed subcontractors can provide the defined level of service and timelines – before approval will be provided. It may be necessary to check the proposed subcontractor's references, qualifications – and/or work history prior to approving.

Where subcontractors are used, the primary service provider remains legally responsible for all work outlined in the contract. The contract relationship remains between the ministry and the primary service provider. The primary service provider is responsible for all interactions with the subcontractor and is responsible for payment to the subcontractor.

Multi-year Contracts

Longer terms are sometimes considered to develop expertise, provide continuity of service for clients, reduce administration, or for several other reasons. Where a longer term is warranted, the inclusion of an Option to Renew in the contract allows the opportunity to extend the contract without the need for an additional procurement.

The Ministry of Finance (i.e. Treasury Board Staff) has a current restriction on contract terms to a maximum of one year. This is in order to limit government's exposure to financial risk associated with ministries expanding the scope of their programs and committing government to new long term contractual obligations.

The Ministry of Children and Family Development has obtained an exception to this restriction, as outlined in the minister's budget letters, due to its operational requirements. Multi-year communication materials and tools have been developed to support and provide clarity to MCFD staff involved in procurement and contract management. These include guidelines, worksheets and questions and answers (access for ministry staff only).  These tools can be found under Practice Advisories (access for ministry staff only)

Contact MCFPGPB@gov.bc.ca for additional guidelines on multi-year contracting.

(see Terms of Participation – Confidentiality and Conflict of Interest)

As part of continuous improvement, the Procurement and Contract Management Branch issues practice advisories to address current issues related to procurement and contract management. The practice advisories (access for Ministry Staff only) are meant to raise awareness and assist and support staff in establishing, creating and managing ministry contracts.

(see Terms of Participation – Confidentiality and Conflict of Interest)

 

Terms of Participation – Confidentiality and Conflict of Interest

MCFD has created a standard template/form  related to Confidentiality and Conflict of Interest (access for ministry staff only). 

This form is to be signed by external/non government participants who will be participating on evaluation committees. This form can be found on the under Procurement Templates (access for ministry staff only).

This form is not intended to be signed by ministry staff as BC Public Service Employees are already bound by the Standards of Conduct for Public Service Employees and the Standards of Conduct for Public Service Employees Engaged in Government Procurement Processes.

This form should be completed and signed prior to commencing work, when/if an external participant is invited to assist in the evaluation of proposals received for a solicitation. This may include, but is not limited to, development of a related procurement process and participation as a subject matter expert, community representative or evaluator.