Administrative Procedure 515

PROCUREMENT AND CONTRACTS

Background

The purpose of this Administrative Procedure is to ensure that procurement of goods and services provides the best value to the Division and taxpayer and is undertaken in an open, fair, consistent, efficient, ethical and competitive manner while remaining in full compliance with legislation.

Definitions

Alberta Purchasing Connection (APC):
is an online tool created by the Alberta government that lets public- and private-sector users manage, advertise, distribute and download public purchasing opportunities for goods, services and construction in Alberta. With APC, purchasers advertise opportunities for tender and vendors find opportunities to sell their products or services.

Construction Services:
are construction, reconstruction, demolition, repair or renovation of a building, structure or other civil engineering or architectural work and includes site preparation, excavation, the supply of products and materials, the supply of equipment and machinery if they are included in and incidental to the construction, and the installation and repair of fixtures of a building, structure, or other civil engineering or architectural work, but does not include professional consulting services related to the construction contract unless they are included in the procurement.

Consultant:
is a person who or organization that provides services or expert advice in a particular area, such as construction, engineering, auditing, research, or banking, and is not typically considered an employee.

Contract:
is a legally enforceable business agreement between two or more parties with mutual obligations. A contract may: define procurement of goods and services; define funds (revenue or grants) to be received from a third party; include memoranda of understanding (MOU) or letters of understanding (LOU); and/or have a zero, or null, dollar value. A contract is intended to define responsibilities (actions) or deliverables between the parties.

Goods:
are tangible items generally sold or offered for sale in the commercial marketplace.

Personal Services Contract:
is a legal agreement, in which the skills or talents of an individual are material such as, professional services, between an individual employee and an employer that clarifies the terms and conditions of employment. Payments to the individual are handled through Payroll and are typically not included in the Classified Handbook (Appendix 440-A) or Teachers’ Collective Agreement.

Preferred Vendor:
is a vendor that has been qualified through an open, fair and transparent process and is deemed to represent the best value to the Division and taxpayer. A thorough bid process or negotiation is conducted and proposals are solicited from numerous vendors.

Procurement:
is the act of finding, acquiring, buying goods, services or works from an external source, often via a tendering or competitive bidding process. The process is used to ensure the Division receives goods, services or works for the best possible price, when aspects such as quality, quantity, time and location are compared. The Division has defined processes intended to promote fair and open competition while minimizing risk, such as exposure to fraud and collusion.

Purchase Order:
is a buyer-generated document that authorizes a purchase transaction.

Request for Proposal (RFP):
is an official tender process where documents with a statement of work are posted on Alberta Purchasing Connection (APC).

Services:
are activities provided by other people.

Single Source:
occurs when a contract for supplies, equipment, services and consulting services is awarded without competition. This may occur when competition for procurement is not feasible because of the nature of a commodity, a particular specification or urgency.

Sole Source:
occurs when there is only one person or company that can provide the contractual services needed, so any attempt to obtain bids would only result in that person or company bidding on it.

Procedures

1. This Administrative Procedure applies to all individuals who are involved in the procurement process.
2. Individuals who are involved in the procurement process shall be aware of and refer to all relevant Division Administrative Procedures and processes as well as external legislative requirements.
3. This Administrative Procedure applies to the procurement of all goods and services acquired with any Division administered funds—operating, capital, school generated.
4. Items purchased in the name of a school or the Board shall become the property of the Division.
5. Notwithstanding this Administrative Procedure, staff shall bring any procurement to the attention of the Secretary-Treasurer if that matter has an unusually high-risk factor, exposure to liability, impact on public profile or future operations, if it brings the activities of the Division under scrutiny or disrepute, or if it involves controversial matters.
   
   Authority and Accountability
6. Procurement guidelines are established by the Secretary-Treasurer.
7. Procurement authority and limits are delegated to staff as per Administrative Procedure 514: Signing Authority.
8. The Division shall abide by provincial and federal legislation, including the Agreement on Internal Trade and the New West Partnership Trade Agreement.
9. Where the Division uses a third party to conduct procurements on its behalf, the third party shall ensure such procurements are conducted in accordance with provincial and federal legislation, including the Agreement on Internal Trade and the New West Partnership Trade Agreement.
   
   Procurement Principles
10. Procurement shall be conducted with the objective of obtaining the best value for the Division and taxpayer taking into consideration such criteria as price, total cost of ownership, product or service quality, bid compliancy, supplier qualifications, experience and reputation.
11. Procurement shall be conducted in an open, fair, non-discriminatory and transparent manner, and where legislation, Division policy, or procedure dictate, follow a competitive procurement process.
12. Individuals participating in procurements on behalf of the Division shall conduct themselves in an ethical manner, ensuring compliance with Division Administrative Procedures, in particular, the Administrative Procedure 511: Public Sector Purchasing Code of Ethics.
13. Division staff cannot sell products, equipment or services—other than by employment contract—to the Division either as an individual, in a partnership, or as a corporation without approval from the Superintendent.
    
    Procurement Process
14. The nature and the dollar value of the procurement drive different procurement methodologies and competition requirements. All procurement will be conducted as per the Procurement Methodology and Competition Matrix (Appendix 515-A). Detailed procedures for procuring goods, services and construction services are included in the Procurement Manual.
15. In applying the limits outlined in the Signing Authority Matrix (Appendix 514-A), the total value is calculated based on the value of the purchase—over the term of the contract, excluding extensions—after taxes and freight, and valued in Canadian dollars.
16. Division staff shall not reduce the overall value of procurement by dividing a single procurement into multiple procurements to circumvent competitive procurement thresholds.
    
    Procurement Exceptions
17. All building operation and maintenance for the Division is the responsibility of the Director of Facility Services. Procurements for operation and maintenance services shall be in accordance with the requirements of Administrative Procedure 542: Facility Services - Services Provided.
18. The Division requires that all equipment procured for use in schools or departments requiring lines for gas, water, drains or special electrical connections be approved by the Director of Facility Services prior to procurement. Procurements that may have an impact on the building or health and safety shall comply with Administrative Procedure 548: Purchase/Connection of Equipment.
19. Information technology equipment procurements are the responsibility of the Director of Information Technologies. Procurements of information technology shall be in accordance with Administrative Procedure 140: Responsible Use and Security of Learning Technology.
20. Software procurements are the responsibility of the Director of Information Technologies. Procurements of software shall be in accordance with Administrative Procedure 191: Computer Software. 
21. The Associate Superintendent of Human Resources shall provide guidance in determining whether a contract is considered consultant services or an employment contract. Employment contracts and Personal Services Contracts are outside the scope of this Administrative Procedure. 
    
    Vendors
22. In selecting vendors, consideration shall be given to:
    1. reputation and experience;
    2. the ability to deliver or perform within the time specified in a safe and healthy manner;
    3. the ability to provide after-sales maintenance and service; and
    4. past experience on previous orders.
23. In considering qualification of vendors, the following criteria shall be met, where applicable:
    1. current business licence;
    2. minimum of $2-million liability insurance; and
    3. WCB coverage.
24. There is an expectation that, where practical, the Division takes advantage of using established preferred vendors for their purchases.
    
    Sole or Single Source
25. The Division will employ an open, competitive process when required, and whenever possible, to increase the chances of achieving the greatest value for money. However, certain purchases may qualify for Single Source or Sole Source procurement. These purchases are treated as an exception to the competitive procurement requirements of this policy.
26. In the event the Division does not employ a competitive procurement process, a signed Sole Source Justification and Approval Form (Form 515-2) must be completed by the requester, stipulating the reason for the single source or sole-source procurement.
27. Exceptions to competitive bidding requirements shall not be for the purpose of avoiding competition or in order to discriminate against or favour specific suppliers. The Division requires competitive bidding of all purchases where practical and advantageous, however the following sets out when a Sole or Single Source purchase can be made:
    1. original manufacturer or provider; no other local distributors exist;
    2. parts or equipment not interchangeable with similar parts of another manufacturer;
    3. only local distributor for the original manufacturer or provider;
    4. only known item or services matching the requested needs or performing the intended task;
    5. only one firm is capable and available to do the work;
    6. sole provider of a licensed or patented good or service;
    7. sole provider of items compatible with existing equipment, inventory, systems, programs or services;
    8. sole provider of goods or services established as standard;
    9. sole provider of factory-authorized warranty service;
    10. used item representing good value and advantage;
    11. due to safety concerns;
    12. where an unforeseeable situation of urgency exists;
    13. due to the nature of the work, it is not in the public interest to discuss requirements with another vendor; and
    14. the contract or purchase order is less than $20,000.
        
        Co-operative Procurements
28. Where appropriate, the Division may leverage working collaboratively with other boards and, where applicable, other public sector agencies, to develop co-operatives and shared services in order to aggregate demand to achieve economies of scale.
29. Where the Division is involved in such activities, procurements are to be made according to the procedures of the co-operative group, which may not be identical to that of the Division but shall be consistent with this Administrative Procedure.
30. Where appropriate, the Division may also leverage its internal buying power by aggregating similar purchases across various departments, schools, etc. in order to achieve economies of scale and create contracts offering greater benefits accessible to the entire Division.
    
    Personal Purchases
31. Division procurement resources shall not be used for any personal or non-Division business-related acquisition of goods or services.
32. Suppliers may elect to extend pricing options to Division staff for their personal purchases of certain goods and services. While staff may take advantage of this option, they shall not use any Division resources for these purchases or support.
    
    Contracts
33. Contracts shall be executed under the legal name of The Board of Trustees of Elk Island Public Schools Regional Division No. 14. A site reference may be added, if required.
34. No person shall enter into any contract unless:
    1. The contract has been negotiated, reviewed, and approved in accordance with this Administrative Procedure.
    2. The individual has contract signing authority in accordance with Administrative Procedure 514: Signing Authority.
35. Prior to entering into any contractual arrangements, signing authorities shall ensure all of the following criteria have been met:
    1. The contract is in the best interests of the Division.
    2. The contract has been reviewed from both a financial and a resource perspective.
    3. The contract is operationally feasible.
    4. The appropriate reviews of the contract have occurred.
    5. The contract is in accordance with any legislative or regulatory requirements, such as policies, guidelines, collective agreements or other obligations of the Division. 
    6. Appropriate consultation has occurred with Division departments or schools that have an interest in the contract. 
    7. Provision has been made for adequate indemnity, insurance and risk management plans, and other appropriate protections.   
36. Contractual obligations shall not commence until the contract has been reviewed, approved and signed by the appropriate signing authority(ies), and all pre-commencement obligations have been satisfied.
37. Contracts shall be issued under the appropriate standard Division contract, where they exist.
    1. Terms and conditions on the standard Division contract forms may not be modified without express agreement of Purchasing and Contract Services who may consult with legal, if required.
    2. Where vendors require use of their contracts or where a standard Division contract does not exist, a different form of contract, approved by Purchasing and Contract Services, may be used.
38. The following contracts, regardless of value, shall be reviewed by Purchasing and Contract Services: 
    1. contracts containing activities that could result in significant direct or indirect physical harm or other injury to a person, property or environment, or impact negatively on the Division’s reputation;
    2. consultant contracts;
    3. contracts in a form other than the standard Division contract; or
    4. contracts with terms longer than three years.
39. All contracts shall be summarized using the Contract Summary (Form 515-1), including a brief description of the contract and signature indicating the appropriate reviews have been completed. The Contract Summary (Form 515-1) shall be presented to the signing authority for execution.
40. All contracts shall be signed by the appropriate authority as outlined in Administrative Procedure 514: Signing Authority and include the printed name of the contract signing authority as well as the date signed.
41. Once a contract has been approved and appropriately signed, Division staff administering the contractual arrangement shall ensure the Division and other contracting parties meet their respective obligations under the contract.
42. All changes to a contract shall be in writing and signed by the appropriate authority as outlined in Administrative Procedure 514: Signing Authority.
43. All executed original copies of contracts and the associated Contract Summary (Form 515-1), regardless of dollar value, shall be sent to the Purchasing and Contract Services for filing in the contract depository.

References

Section 20, 60, 61, 80, 113, 116, 121 School Act
Freedom of Information and Protection of Privacy Act
School Buildings and Tendering Regulation 383/88
Agreement on Internal Trade; Annex 502.4
Trade, Investment, and Labour Mobility Agreement
New West Partnership Trade Agreement

Appendix 515-A: Procurement Methodology and Competition Matrix (PMCM)

Last Updated: September 2019