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Feds want to make it easy for small business to compete

Tuesday, October 18, 2021
Kristin Goff
Source :  Vancouver Sun

The federal government, which spends $13 billion a year on everything from pencils to helicopters, is flexing its considerable muscle in a radical change to the way it does business.

After years of study and consultations, on April 1 the government adopted new procurement rules designed to use its clout to get "better value for taxpayers" in part by centralizing much of the government's buying and funnelling more purchasing through pre-approved companies with "standing offers" to supply certain goods and services.

The government's procurement reform is aimed at saving $2.5 billion over five years by streamlining much of the purchasing formerly done by 98 different departments and agencies.

The changes, which also promise a faster, more efficient system and new electronic tools to simplify procurement, aren't all complete.

But the government took a big step April 1 when it listed 10 categories of goods and services --including everything from office supplies and furniture to computers and professional services -- to apply to procurement reform. They represent the biggest spending areas for the federal government.

Any purchase in the specified categories now has to be done through a Public Works and Government Services "standing offer" if one exists for the purchase a department wants to make. There are only a few exceptions to the policy.

Standing offers, which number in the thousands, can vary in scope and length of time for various commodities. They aren't contracts but agreements with a potential supplier to provide goods or services at pre-arranged price, or in some cases, through a bid, when called upon by the government.

Public Works is now in the process of setting up eight to 10 "commodity" councils, including industry and government participants, to work out details of how certain criteria for standing offers and competition for work should be handled. They may also recommend certain measures to ensure the interests of small businesses are supported as changes occur, officials say.

The early days of changes have not gone smoothly, says Garth Whyte, senior vice-president national affairs for the Canadian Federation of Independent Business.

Companies often had difficulty getting information and answers from Public Works on how the new rules would be implemented. They also face "a huge investment in time and money" if they want to try to get a standing offer to do business under the new rules, he said.

For some, the solution has been to subcontract with a larger company. But often the main supplier gets the profit from government business, while the smaller firm gets squeezed, says Whyte.

"Where before, some of these [small] consulting firms could deal directly with a department and establish a relationship that could be useful over time, all of a sudden it is almost the equivalent of having the government shut the front door to their business," says Whyte.

It's a system, Whyte says, which "tends to steer much of the business to larger firms, those who are on standing offers."

Still, he is encouraged by the decision of Public Works Minister Scott Brison to open new Office of Small and Medium Enterprises, to address such concerns.

The new office, opened in late September, has a Web site (www.pwgsc.gc.ca/sme). There is also a toll free number: 1-800-811-1148. Its mandate is to assist small and medium-sized business (those with fewer than 500 employees) to get the information, training and "tools" needed to compete for government business. "It would not be in our interest as a government to create any changes to procurement that reduce the opportunity for small- and medium-sized enterprises." said Brison. "It is in our interest to do everything we can to encourage a greater level of competition and to partner with small and medium sized companies to get better value for Canadian taxpayers."

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