City councillors passed a change in purchasing policy to encourage foster Indigenous participation in the provision of goods and services to the City of Campbell River.
But there was some nervousness about certain aspects of the measure.
“Yes, I’m strongly in favor of the policy change, it was my motion to pursue this set change,” Coun. Susan Sinnott said at the April 25 Committee of the Whole meeting. “And because I represent a number of people in town who have actually engaged with First Nations through joint ventures and other things, it’s actually bringing our business community closer to newer indigenous business operators, as well as giving our Indigenous operators the chance to develop and grow even further.”
A competitive process is the city’s preferred method of procurement, a report prepared for council by Clinton crook, city purchasing & risk management officer, says, “however, including a set-aside procurement clause allows for opportunities identified by the project manager or city staff to be set-aside from the normal competitive procurement process. These opportunities are reserved for Indigenous businesses, such that only Indigenous businesses are permitted to participate in the procurement process, which includes direct awards.”
National trade agreements permit exemptions for Indigenous procurement and council decided in January during a presentation about the city’s purchasing procedures, that it wanted a set-aside clause incorporated with the Council Purchasing Policy for Indigenous procurement. A motion to that effect was passed.
An underlying objective in the Purchasing Policy is ensuring the city gets “best value.” To ensure that the city is still getting best value when a noncompetitive procurement process is being utilized (which includes Indigenous set-aside clauses), the city has incorporated the following language into the policy as it relates to Indigenous procurement:
Contracts awarded to an Indigenous business under those programs shall:
(a) be awarded at market competitive rates;
(b) meet city expectations with respect to safety and performance standards of the work;
(c) meet all technical qualifications; and
(d) take into account operational factors including, but not limited to, supply, competitive market impacts, program costs and efficiencies.
To be considered an Indigenous business, a proponent would be required to submit supporting documentation showing that at least 50.1 per cent of the organization is owned or controlled by Indigenous people, and if there are six or more full-time staff, at least one third of the employees must be Indigenous.
Incorporating this into council policy will encourage Indigenous entrepreneurship, business, and economic development, by providing Indigenous vendors with more opportunities to participate in the economy.
But there is potential downside to the policy too, Crook told council.
“There are cons with it though, there may be a limited number of suppliers available and limited competition could lead to higher pricing,” he said. “And it may be perceived as preferred treatment for indigenous owned businesses over non-Indigenous businesses.”
This can be mitigated by properly communicating the intentions and criteria that apply to the Indigenous Procurement clause, as well as exemptions that exist in the trade agreements, and how market competitive rates and providing best value to the city will still be expected for any award issued.
Coun. Ron Kerr asked if the policy was going to be monitored. Cook said it could and how often would be up to council.
Kerr was concerned about the nebulous nature of social procurement.
“It’s just a little bit too loosey-goosey to me as a business person,” Kerr said. “I certainly I support going ahead but I would like to see the program monitored.”
Coun. Doug Chapman raised the point that given that many First Nations enterprises are owned by the Nations and some are funded by federal government money, “How do we prevent anyone using taxpayers’ might to compete with private business?”
Crook said the rules require them to be 50.1 per cent Indigenous-owned and if more than six employees, one-third must be Indigenous. Those rules still apply.
Mayor Kermit Dahl said he agrees with everything that was said but he thought the concept could have been incorporated with a simple amendment to the bidding process where there was weight given to First Nation bidders.
“I don’t think that we needed to have a set-aside policy for that. We just needed to consider social procurement and give them an opportunity that non-Indigenous local suppliers wouldn’t have had,” he said.
The motion to adopt the the Indigenous Procurement amendments to the Council Purchasing Policy was passed with none opposed.
@AlstrT
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