Doing Business on The Hill

PWGSC is committed to providing its services in a manner that meets the highest ethical standards. Part of this commitment is ensuring that its procurement processes are open, fair and transparent, and provide best value for money. PWGSC’s competitive bidding process is specifically designed to provide the best value to the Crown by ensuring the best price for a quality product. PWGSC is delivering on this commitment in the important projects it is carrying out to restore the Parliament Buildings.

• 2010 Spring Report of the Auditor General of Canada
• Awards
• Separation of responsibility
• Pre-qualification
• Amendments to solicitations
• Invitation to Tender or Request for Proposal
• Bid Openings
• Insurance for the Crown and Taxpayers
• Fairness Monitor

All major contracts related to the restoration of the Parliament Buildings have been and will continue to be awarded through an open and transparent procurement process. In fact, most major construction contracts have been awarded through a two-stage competitive process, which is used for technically complex projects such as the restoration of the Parliament Buildings—the first being a pre-qualification stage and the second an invitation to submit a bid.

2010 Spring Report of the Auditor General of Canada

In the 2010 Spring Report of the Auditor General of Canada, the Auditor General gave Public Works high marks for project management and project delivery. This audit examined some of the project management activities for the West Block and Library of Parliament and after an exhaustive examination, she made no recommendations for improvement. In June, Ms. Fraser told the Standing Committee on Public Accounts: “As we mentioned in the report, we didn’t have major concerns around the project management. In fact, the report was actually quite positive about project management.”

One of PWGSC’s great accomplishments on the Hill was the rehabilitation of the Library of Parliament. This building was also recognized in the AG Report and with many awards. “Between 2002 and 2006, the Library of Parliament was the first Parliament building in over 40 years to undergo a major rehabilitation. The result has been recognized with numerous awards for outstanding work. (…) We found that, where possible, expertise gained in the renovation, rehabilitation, and upgrade of the Library of Parliament is being used in planning the West Block project.”

Awards

In addition to the Library of Parliament which is universally recognized as a major success and has been awarded several prizes, PWGSC’s work on the Hill was recognized for other important projects, namely the Long-Term Vision and Plan for the Parliamentary Precinct which received an award-winning urban plan, the West Block Southeast Tower which received the 2010 award for Preservation of a Heritage Building by the Canadian Association of Heritage Professionals, and the 125 Sparks street (a Library of Parliament relocation project) recognized by the Ontario Association of Architects and the City of Ottawa Architectural Conservation Awards.

Separation of responsibility

During the procurement process there is a clear separation of roles and responsibilities between project and contracting authorities. This separation provides an essential check in the system, removing the potential for a conflict of interest. The project authority managing the delivery of the project is responsible for developing the technical details of the contract documents and the evaluation criteria. The project authority therefore has a project and requirement development and implementation responsibility.

The contracting authority is completely independent from the project delivery side and is responsible for the development of the contract documents and the review of evaluation criteria, as well as approving and managing the procurement process. The contracting authority has an independent review, approval and oversight role.

In practical terms, architectural and engineering professionals who are responsible for managing the delivery of the project are the ones who develop the technical criteria contained in the procurement documents. These technical criteria are then reviewed and approved by the separate contracting authority that is responsible for ensuring that the criteria are fair, open and transparent. The contracting authority is also responsible for providing oversight of the entire procurement process.

For example, all requested modifications to solicitations are assessed on technical merit by the project authority and are reviewed and approved by the contracting authority based on the four tests mentioned below. This review and approval process occurs at arm’s length from the project delivery team to avoid any perceived conflict of interest and to ensure that an independent body is responsible for ensuring that the process remains fair, open and transparent.

This critical separation of responsibility also exists in the evaluation of industry submissions. Technical experts—leveraging expertise from both the private and public sectors—evaluate industry submissions based on the objective, pre-determined and transparent criteria. As the approval authority, the contracting authority is again responsible for providing an oversight function in reviewing, the recommendations made by the project authority.

Pre-qualification

In a two-stage competitive process such as the one used for most major construction contracts on the Hill, the first step or pre-qualification stage is open to the entire industry. As part of this process PWGSC submits a letter of interest to industry. This is essentially a technical project overview and serves as a call letter to industry to express an interest in the upcoming project and to present their portfolios.

The objective of pre-qualifing bidders is to help ensure that companies who submit bids fully understand the requirements being requested by the Government, and to demonstrate that they have the required expertise and experience to successfully deliver the project. The objective is not to limit competition to the largest firms or to those perceived as the best firms. Rather, the objective is to establish as large a pool as possible of firms who have a record of having successfully completed similar projects.

With the objective of creating as large a pool as possible it is common for PWGSC to request further information from proponent firms who are assessed as having provided incomplete or unclear information in their initial responses to the Letter of Interest for Qualification.

PWGSC balances the need for competency and competition in the public bidding process, and invites all firms who demonstrate that they have the requisite expertise and experience to submit a bid for the project. The objective of this balancing act is to create the maximum value for taxpayers’ money.

The pre-qualification process also provides an open and transparent opportunity for industry to request adjustments to the criteria or standards being requested by the Government.

Amendments to solicitations

It is common during the pre-qualification phase for interaction to occur through official channels between PWGSC and industry. Industry may request amendments to criteria, extensions to deadlines, and the Government of Canada may request additional documentation or information from industry.

For example, it is quite common for the Government of Canada to amend criteria in its solicitations to industry. Prior to submitting a letter of interest to industry, the government sometimes consults with industry in major acquisition projects. Therefore, the pre-qualification period represents an official, open, fair and transparent opportunity to hear from industry on its ability to respond to the government’s requirements.

PWGSC is committed to ensuring that the criteria and requirements are clear and fair and promote transparent and open competition. Therefore, when reasonable requests are made by industry to improve or further clarify criteria in a way that promotes fair and open competition without negatively impacting the Government of Canada’s ability to achieve its project objectives, PWGSC has a responsibility to listen and make adjustments.

PWGSC’s response to requests from industry is based on four tests.

1. Fair & reasonable: Is the request fair and reasonable and would approving it impact the Government’s ability to achieve its project objectives?
2. Policy framework and past practice: Is the request supported by PWGSC’s policy framework and have similar requests been approved in the past?
3. Competition: Would approving the request reduce or increase competition?
4. Legal perspective: Would approving the request increase or reduce the department’s legal risks?

Any changes to criteria are communicated openly and are applied evenly to all competitors.

Invitation to Tender or Request for Proposal

Once a list of pre-qualified firms is established, an invitation to submit a bid either through an Invitation to Tender (ITT) or a Request for Proposal (RFP) process is extended to the firms.

In solicitations where complete drawings and specifications are available for bidders to provide firm price bids, an Invitation to Tender process will be used. The tenders received from bidders are opened publicly, and the selection of a successful bidder is based on lowest-price compliant bid.

The ITT process for pre-qualified firms is made on the clear understanding that the project will be awarded to the lowest-price compliant bid. Therefore, if the firm who submits the lowest price bid stands behind its price and has also met the other prerequisites such as providing bid and performance security, Government of Canada policy dictates that the contract is awarded to this firm.

In other solicitations, such as in the procurement of construction management services where the contract documents are performance based rather than on detailed specifications, PWGSC will issue a Request for Proposals to the pre-qualified bidders. In this process, the bids will consist of both a technical proposal and a price proposal. Technical proposals will be evaluated and scored in accordance with the criteria stipulated in the RFP. When the evaluation is completed and the scores and responsiveness of each technical proposal is confirmed, the price proposals of the responsive bidders will be opened. The selection of a successful bidder in an RFP process is based on a best value approach that takes into consideration the quality of the technical proposal as well as the price proposal.

During either the ITT or RFP processes there is an opportunity for industry to request clarification on the contract documents. Depending on the number or complexity of clarifications, PWGSC may extend the date for the bid closing if it is felt that insufficient time has been allotted for firms to submit responsive bids or if more time is needed following clarifications. This is standard process. Time extensions as well as questions and responses are sent to all competitors fairly and transparently.

Bid Openings

To ensure that the submission and opening of bids is managed with absolute fairness, openness and transparency, neither the project nor contracting authority is involved in the receipt and opening of bids. A separate section of PWGSC called the Bid Receiving Unit is responsible for managing the receipt and opening of all bids. Tenders received in response to an ITT will be opened publicly by the Bid Receiving Unit as soon as the deadline for submission is reached.

Insurance for the Crown and Taxpayers

Prior to awarding a major construction contract on Parliament Hill, PWGSC requires the firm to provide contract security through such financial instruments as performance bonds, and labour and material bonds. This ensures that the contractual requirements will be carried out for the original contract price even if the firm who won the contract is unable to deliver the project according to the contractual terms. In short, it is a form of project insurance that safeguards the taxpayer from incurring additional costs for a contractor who is unable to perform the work.

Fairness Monitor

The Parliamentary Precinct Branch engages the PWGSC Fairness Monitoring Program for procurement activities related to the restoration of Parliament Hill. Information relating to this Program and Fairness Monitor reports are available at the following address: Fairness Monitoring (FM) Program.