Purchasing policy increases spending limits, local preference
to break ties
The five year update to New Tecumseth's Procurement of Goods and
Services bylaw raises the dollar limits that can be spent by municipal
departments without triggering the approvals chain including increasing
the minimum ceiling from $250 to $1,000.
Other categories whose levels have been increased include:
$1,000 to $5,000, (up from $250 to $2,500) which requires
three quotations "where possible and practicable", no purchase order
$5,000 to $20,000, (up from $2,500 to $15,000) in
consultation with department head, three quotations, and no report to
CAO or council necessary unless a contract/agreement is to be executed;
over $20,000 to $75,000 (up from $15,000 to $50,000) "where
goods/services are included in the approved budget" tenders should be
advertised, report to CAO/delegate for approval.
All other cases, tenders to be advertised, a report to
council by the issuing department head, in consultatation with
Purchasing, for council consideration and approval.
As part of this update, spurred by complaints from Trillium Ford
Lincoln, which last spring lost out on a vehicle tender to a Brantford
dealership over a difference in price of $586.47 including HST, the
prospect of including a "local preference" clause was reviewed, but
ultimately rejected because of broad based legislation that discourages
such trade restrictions.
"The basic principle of public procurement is being fair with open
competition. If a municipality practices local preference, this
principle is jeopardized. Fairness in public procurement is not limited
to those individuals or businesses submitting bids or proposals, it is
also extended to the taxpayers that are being served by their municipal
government. It is the responsibility of municipal staff to acquire
goods and services in the best interest of all taxpayers, not just
those individual suppliers even though they may also be taxpayers,"
according to Lori Archibald, New Tecumseth's Senior Buyer, in her
report to council.
"In addition, due to the geography and the Town's surroundings, many
local businesses do a
great deal of work outside of our borders. Not only is it sound
practice to comply with public
purchasing principles, it is also a reasonable approach to keeping an
open competition process
available to local businesses who may bid on contracts in other
jurisdictions. By advocating
local preference policies, a municipality not only limits its own level
of competitive bids received, but it may also limit its local
businesses from being awarded contracts outside of the area, if other
municipalities react and reciprocate with similar policies to limit
dealing within their boundaries. Allowing local preference to become a
factor in determining the award of a contract has been legally regarded
as a very restrictive trade practice. Not only is a municipality
limiting the amount of competition, and therefore its choices with
regard to value, quality, etc., but it would also be contravening
various pieces of legislation. Furthermore, the Municipality has to be
accountable for its use of the public's funds and such a practice could
easily be viewed as inappropriate and having to pay more with access to
a smaller pool of vendors. If a local preference provision was adopted,
this would certainly limit our ability to obtain competitive bids. The
bids obtained through the process could potentially reflect a higher
cost. Local Preference provisions are essentially a tax to support
One concession to "local preference" is using it as consideration in
the case of a "tie" between competing bids.
"If a competitive market exists and two or more compliant bids are
received and are identical in price, quality, service and delivery,
then location of a business will be given consideration."