BPS SUPPLY CHAIN SECRETARIAT: Broader Public Sector Procurement Directive & Expenses Directive — February 2011 — Webinar

Presenters

• Jennifer Churchill, Ministry of Finance — Facilitator
• Jim Hadjiyianni, Ministry of Finance — BPS Procurement Directive
• Carol Pauker, Ministry of Government Services — BPS Expenses Directive

Webinar Instructions

To support the webinar presentation:

• Place your phone on mute
• Don't place your line on hold
• Don't have your smart phone near your telephone

Questions are welcome. Please submit them via email throughout the presentation.

• BPSSupplyChain@ontario.ca
• Indicate the nature of question in subject line
• Email address is in the Note Section on left side of screen

Agenda

1. BPS Procurement Directive
2. BPS Expenses Directive
3. Responses to email Questions
4. Conclusion

Focus of Webinar

This webinar will focus on:

1. The key elements of the BPS Accountability Act;
2. The BPS Procurement Directive and Expenses Directive - Both an overview and highlighting the specific requirements;
3. The substantive differences between the BPS Procurement Directive and the Supply Chain Guidelines that was issued in April 2009;
4. Implementation Support; and lastly
5. Application and Scope.

Current Environment

• Fiscal pressures affecting both the government and broader public sector organizations.
• Increased scrutiny regarding how public funds are spent.
• The Broader Public Sector Accountability Act, 2010brings in new rules and consistent accountability standards for the broader public sector, including:
• Ban on using public funds to pay for consultant lobbyists;
• New directives setting out rules for procurement and expenses;
• Requirements specific to hospitals and Local Health IntegrationsNetworks (LHINs), for example, reporting and publicly posting expense information; and
• Bringing hospitals under freedom of information legislation.

BPS Procurement Directive — Context

The broader public sector (BPS) Procurement Directive (Directive) replaces the BPS Supply Chain Guideline issued by the Ministry of Finance in 2009.

Principles:

Accountability	Organizations must be accountable for the results of their procurement decisions and the appropriateness of the processes.
Transparency	Organizations must be transparent to all stakeholders. Wherever possible, stakeholders must have equal access to information on procurement opportunities, processes and results.
Value for Money	Organizations must maximize the value they receive from the use of public funds. A value-for-money approach aims to deliver goods and services at the optimum total lifecycle cost.
Quality Service Delivery	Front-line services provided by Organizations, such as teaching and patient care, must receive the right product, at the right time,in the right place.
Process Standardization	Standardized processes remove inefficiencies and create a level playing field.

BPS Procurement Directive — Overview

The Broader Public Sector Accountability Act, 2010provides the authority for the Management Board of Cabinet to issue directives governing the procurement of goods and services by designated broader public sector organizations.

The Broader Public Sector (BPS) Procurement Directive will:

• provide consistent procurement practices for BPS organizations
• ensure that publicly funded goods and services are acquired by BPS organizations through a process that is open, fair, and transparent
• ensure accountability through each stage of the procurement process
• maximize the value that BPS organizations receive from the use of public funds

BPS Procurement Directive — Requirements

The BPS Procurement Directive has been developed based on the BPS Supply Chain Guideline which was developed in consultation with BPS organizations and was recognized by the Auditor General in his report.

The BPS Procurement Directive substantially aligns with:

• Provincial Trade Agreements
• Management Board of Cabinet (MBC) Procurement Directive
  Requirements:

The Procurement Directive has the following requirements:

• A Supply Chain Code of Ethics
• Procurement Policies and Procedures

Supply Chain Code of Ethics

Goal: An ethical, professional and accountable supply chain

Personal Integrity and Professionalism
All broader public sector (BPS) supply chain participants must act, and be seen to act, with integrity and professionalism. Honesty, care and due diligence must be integral to all supply chain activities within and between BPS organizations, suppliers and other stakeholders. Respect must be demonstrated for each other and for the environment. Confidential information must be safeguarded. Participants must not accept gifts and favours, provide preferential treatment, publicly endorse suppliers or products or engage in any other activity that would create, or appear to create, a conflict of interest.

Accountability & Transparency
Supply chain activities must be open and accountable. In particular, tendering, contracting and purchasing activities must be fair, transparent and conducted with a view to obtaining the best value for public money. All participants must ensure that scarce public sector resources are used in a responsible, efficient and effective manner.

Compliance & Continuous Improvement
All BPS supply chain participants must comply with this Code of Ethics and the laws of Canada and Ontario. Participants should continuously work toimprove supply chain policies and procedures, to improve supply chain knowledgeand skill levels, and to share leading practices.

Purchasing Policies and Procedures — 25 Mandatory Requirements

Approval Authority Levels	1. Segregation of Duties 2. Approval Authority
Procurement Thresholds	3. Competitive Procurement Thresholds
Competitive Procurement	4. Information Gathering 5. Supplier Pre-Qualification
Purchasing	6. Posting Competitive Procurement Documents 7. Timeline for Posting Competitive Procurements
Evaluation	8. Bid Receipt 9. Evaluation Criteria 10. Evaluation Process Disclosure 11. Evaluation Team 12. Evaluation Matrix 13. Winning Bid 14. Non Discrimination
Contract Award	15. Executing the Contract 16. Establishing the Contract 17. Termination Clauses 18. Term of Agreement Modifications 19. Contract Award Notification 20. Vendor Debriefing
Non-Competitive Procurement	21. Non-Competitive Procurement
Procurement Documents and Records Retention	22. Contract Management 23. Procurement Records Retention
Conflict of Interest	24. Conflict of Interest
Dispute Resolution Process	25. Bid Dispute Resolution

New Mandatory Requirements

The BPS Procurement Directive strengthens the current Supply Chain Guideline by introducing mandatory requirements related to:

• competitive acquisition of consulting services regardless of dollar value
• the approval authority framework related to consulting services
• effective management of BPS contracts

Competitive Procurement Thresholds

Goods, Non-Consulting Services and Construction

Total Procurement Value	Means of Procurement
$100,000 or more	Open competitive process

Consulting Services

Total Procurement Value	Means of Procurement
$0 up to but not including $100,000	Invitational or open competitive process
$100,000 or more	Open competitive process

Consulting Services

Prior to commencement, any procurement of consulting services must be approved in accordance with the Procurement Approval Authority Schedule for Consulting Services below.

Procurement Approval Authority Schedule (AAS) for Consulting Services

Procurement Method	Procurement Value	Approval Authority
Invitational Competitive	$0 up to but not including $100,000	Organization's AAS for goods and non-consulting services
Open Competitive	Any value	Organization's AAS for goods and non-consulting services
Non-competitive*	$0 up to but not including $1,000,000	President, CEO or equivalent
	$1,000,000 or more	Board of Directors or equivalent

*Exemption-based only

Comparison Between the Supply Chain Guideline (SCG) and the BPS Procurement Directive

Item	Item Change (BPS Procurement Directive)
Approval Authority Levels	Further clarification that the Board must approve the approval authority schedule (AAS). Addition of AAS specifically for consulting services.
Competitive Procurement Thresholds	BPS organizations must competitively procure consulting servicesirrespective of value. Exemptions must be in accordance with applicable trade agreements. Restrictions on reducing the overall value of procurement to circumvent procurement thresholds.
Timelines for Posting Competitive Procurements	Language added to increase response times to 30 days for more complex procurements.
Evaluation Criteria	Alternative solutions moved from mandatory requirement #13 to #9and further clarification provided.
Executing the Contract	Alternative procurement strategies (non-contract A / B model) recognized.
Contract Management	New mandatory requirement - effective management of procurement and the resulting contract.
Procurement Records Retention	Language added regarding organizations must have a written policy for maintaining suppliers confidential and commercially sensitive information.

For a detailed comparison table between the SCG and the BPS Procurement Directive, please refer to the BPS Supply Chain Secretariat website (www.fin.gov.on.ca/en/bpssupplychain/directive_scg_comparison.html)

Application — A Phase-In Approach

The BPS Procurement Directive will be applied using a "phased-in"approach as outlined below. The "timeline"column provides the date on which the Directive applies, while the "sector"column identifies the BPS groups that are in scope within the prescribed timeline.

Timeline	Sector
April 1, 2011	Hospitals School boards Colleges Universities Community Care Access Corporations Children's Aid Societies
January 1, 2012	Publicly funded organizations that received public funds of 10 million dollars or more in the previous fiscal year of the Government of Ontario

Compliance & Reporting

Of the designated BPS organizations, only hospitals are requiredto prepare attestations regarding their compliance with specific aspects ofthe legislation.

Other designated broader public sector organizations are currently not required to report. However, the legislation provides the power to make regulations requiring these organizations to provide attestations of compliance with the requirements of the Act.

Ministries may choose to provide policy direction on reporting. Your ministry will communicate their expectations.eporting

Implementation Support

To support implementation of both the BPS Procurement and Expenses Directives, the Ministry of Finance website offers:

• The directives in English and French, available in HTML and in PDF format.
• FAQs on the directives.
• Registration for participation in webinars — open to BPS organizations.
  

To support implementation of the BPS Procurement Directive:

• The BPS Procurement Directive Implementation Guidebook is beingdeveloped.
• A BPS Procurement Directive toolkit and training materials are being developed. The toolkit will include checklists, templates and process maps.
• Training on the toolkit (available in-person and through webcast), targeted to your procurement professionals, is scheduled for March 2011.
  

Please visit the Ministry of Finance website for more information at: www.fin.gov.on.ca/en/bpssupplychain/index.html

Publicly Funded Organizations That Are Not Designated BPS Organizations

The Act

Section 13 of the Broader Public Sector Accountability Act, 2010, (Bill 122) states that MBC may make guidelines with respect to the procurement of goodsand services by publicly funded organizations that are not designated BPS organizations.

Guideline — consultation and process

Ministry of Finance (MOF) will consult with line ministries on the need for guidelines for publicly funded organizations that are not designated BPS organizations.

MOF will hold consultations sessions with publicly funded organizations in order to:

• better understand current procurement practices of the sector
• share information and review supply chain leading practices thatmay benefit non-designated BPS organizations
• receive feedback to support development of a Best Practice Procurement Guide

Overview — BPS Expenses Directive — Purpose

The BPS Expenses Directive improves accountability and transparency in the BPS by:

• requiring designated BPS organizations to establish expense rules, and
• setting out requirements for what needs to be included in each organization's expense rules.

The requirements in the directive contribute to greater alignment with the high standards expected in ministries and agencies of the Government of Ontario.

BPS organizations must be in compliance by April 1, 2011, when the directive-making sections of the Act are proclaimed.

Overview — BPS Expenses Directive — Application

The directive applies to any person in a designated BPS organization making an expense claim, including:

• appointees,
• board members,
• elected officials (e.g. school trustees),
• employees, and
• consultants and contractors engaged by the organization providing consulting or other services.

The directive serves as a guideline to all other publicly fundedorganizations as defined under the Broader Public Sector Accountability Act.

Overview — BPS Expenses Directive — Requirements

The directive sets out 8 requirements that must be included in the expense rules for an organization:

1. An accountability framework
2. Prohibition on reimbursement of meal and hospitality expenses for consultants and other contractors
3. Rules specific to serving alcohol
4. Rules for hospitality events where hospitality is defined as the provision of food, beverage, accommodation, transportation and other amenities paid out of public funds to people who are notengaged to work for:
   
   • designated BPS organizations (i.e. those covered by the directive), or
   • any of the Ontario government ministries, agencies and public entities covered by the OPS Travel, Meal and Hospitality Expenses Directive.
5. Good record keeping practices
6. Rules for individuals making claims (e.g. all appropriate approvals should be obtained before incurring the expense, original itemized receipts are required, etc.)
7. Rules for individuals approving claims (e.g. cannot approve their own claims, provide approval only for expenses incurred in the performance or organization business, etc.)
8. Posting the rules on the organization's public website

Guidance on the development of expense rules is provided throughan appendix. To promote alignment with rules for government ministries, the information in the appendix reflects the general requirements of the Ontario Public Service (OPS) Travel, Meal and Hospitality Expenses Directive. This alignment will serve to provide the public with a consistent expectation of behaviournot only
across the OPS but also the BPS.

Questions

Questions are welcome. Please submit them via email throughoutthe presentation.

• BPSSupplyChain@ontario.ca
• Indicate the nature of question in subject line
• Email address is in the Note Section on left side of screen