June 2022 Board of Health Meeting - Procurement Policy Correspondence

Changes to previous version

Changes in the Procurement Policy include the following:

• The five (5) core functions of the procurement process were consolidated into four (4), with Requisition and Method from the previous version combined under Execution.
• Removed list of all exceptions under the Canadian Free Trade Agreement (CFTA), replace with link and reference to current requirement as per CFTA.  Definitions have been updated to reflect current terms utilized in the Procurement Policy.
• Approval Authorities referenced in the previous Procurement Policy have been removed.  The Policy section of the current Procurement Policy summarizes estimated procurement values and provides guidance regarding the method of procurement that shall be undertaken.
• All dollar thresholds in the Procurement Policy have been updated/increased.
• Definitions, more specifically, Conflict of Interest, Fairness, Non-discrimination, and Settlements, have been updated to provide clarification.
• Roles and responsibilities have been updated to include responsibilities specific to the Director of Corporate Services and the Finance Department.
• The Execution section of the Procurement Policy provides additional guidance on the two types of non-competitive procurement and the circumstances in which either type would be considered acceptable.
• Award/Regret Notification – This chart has been updated to include specific details required to be disclosed on the Health Unit’s website.
• Other procurement circumstances provide guidance on approach to the procurement of real property, banking services, and insurance brokerage services.  Additional guidance has been included regarding use of the Vendor of Record with the Province of Ontario.
• Payments – The frequency of issuance of cheques by the Finance Department as well as the reference to cheque signing authorities have been updated.
• Removal of guidance on Request for Parking tokens and Cash on hand have been removed and will be addressed in a Cash Management Policy.

Purpose and Scope

As a publicly funded organization, the Windsor-Essex County Health Unit (Health Unit) is required to implement a Procurement Policy (the Policy).  The Policy shall support the strategic and operational requirements of the Health Unit; comply with legal and contractual obligations; manage and mitigate risk; create an environment of continuous improvement; yield the best value for money; be undertaken with fairness, honesty, and integrity; avoid the appearance of impropriety; be open and transparent; undertaken in a non-discriminative manner. 

Board Members and Health Unit staff must not:

• Acquire any goods and services for personal use in representation of the Health Unit
• Purchase or offer to purchase, on behalf of the Health Unit, any goods and services, except in a accordance with this Policy
• Knowingly cause, permit or omit anything to be done or communicated to anyone which is likely to cause any potential Supplier to have an unfair advantage or disadvantage in obtaining a Contract for the supply of a good or service to the Health Unit, or any other either jointly or in cooperation with the Health Unit;
• Knowingly cause, permit or omit anything to be done which will jeopardize the legal validity or fairness of a purchase under this policy, or which might subject the Health Unit to any claim, demand, action or proceeding as a result.

The WECHU should look to achieve some/all of the following goals in any procurement process:

• To procure by purchase, rental or lease the required quality and quantity of goods and/or services, including consulting services in an efficient, timely and cost effective manner;
• To consider all costs, including, but not limited to,  taxes, delivery, acquisition, operating, training, maintenance, quality, warranty, payment terms, disposal value and disposal costs, in evaluating bid submissions from qualified, responsive and responsible vendors
• To give full consideration to the annual aggregate value or to consider the total project cost of specific goods and services that will be required by each department and by the Health Unit as a whole prior to determining the appropriate acquisition method;
• When procuring goods, services and facilities, the Health Unit will comply with the requirements of the Ontarians with Disabilities Act 2001, the Accessibility for Ontarians with Disabilities Act, 2005 and its associated standards enacted through regulation, as well as related Health Unit polies and to encourage the procurement of goods and services with due regard for people with disabilities;
• To monitor and report on the economic climate and legislative changes which may have an impact on the Health Unit and to determine the appropriate actions to be taken through purchasing policies and procedures;
• To encourage the procurement of goods and services with due regard to the preservation of the natural environment, Suppliers may be selected  to supply goods made by  methods resulting in the least damage to the environment and supply goods incorporating recycled materials where practicable.
• To investigate the purchase of energy efficient/advanced technology equipment, vehicles, supplies, and appliances wherever possible.

The Procurement Policy applies to all procurements except: i) professional services; ii) employee expenses; iii) governmental charges; iv) settlements; v) low value purchases; vi) other exceptions as defined by the Canadian Free Trade Agreement (CFTA) and other governing legislation or Ministry directives that may be in place from time-to-time.

Policy

The procurement process is broken down into four (4) phases:

Planning Appropriate ness Budget Requirements Procurement value

Execution Method of procurement Evaluation Award/Notification

Contract Management Supplier satisfies all requirements

Payment Payment is authorized in accordance with Contract

When procuring goods or services, Health Unit staff shall adopt the type of procurement available based upon an estimate of the procurement value of the goods or services being considered.  The following are the required approaches based upon the estimated procurement value of the goods or services. 

Estimate Procurement Value ($)	Type of Procurement	Description	Approval
0 - 500*	Not applicable.	Not applicable.	Manager Director (Director, Corporate Services)
500 – 7,500*	Non-competitive procurement	Solicitation of one quotation required (verbal or written)	Manager Directors (Program, HR and Director of Corporate Services)
7,501 – 10,000	Non-competitive procurement Competitive procurement	Solicitation of one quotation required (verbal or written) Solicitation of three (3) quotations (verbal or written) by invitation	CEO Manager Directors (Program, HR and Director of Corporate Services)
10,001 – 100,000	Non-competitive procurement Competitive procurement	Solicitation of one quotation required (written) Solicitation of three (3) quotations (written) by invitation	Board Manager Directors (Program and HR, and Director of Corporate Services) CEO
100,001 and up	Non-competitive procurement Competitive procurement	Solicitation of one quotation required (written) Solicitation for submissions posted publicly on Merx or other public platform	Board Manager Directors (Program and Director of Corporate Services) CEO

*While procurements with estimated procurement values of $7,500 or less can be undertaken in a non-competitive manner, WECHU staff should always consider obtaining a minimum of three (3) quotations from Suppliers to ensure the WECHU is yielding the best value for money and that WECHU staff undertaking procurements are not in conflict (actual or perceived).

Definitions

AWARD	When a submission is formally accepted by the Health Unit, bringing an agreement into existence to be evidenced by a Contract or Purchase Order.
BEST VALUE	Approach that aims to deliver products and services with a lower total life cycle cost while maintaining a high standard.
CONFLICT OF INTEREST	A situation in which an employee has, or is perceived to have, personal or private interests that may compete with the interests of the Health Unit or the public interest. Such personal or private interests may make it difficult, or be perceived to make it difficult, for the employee to remain impartial. A conflict exists even if no unethical or improper act results from it. A conflict of interest can either be an apparent (perceived) conflict or an actual conflict.   Apparent (Perceived) Conflict - Exists when an informed and reasonable person could conclude that a conflict of interest exists, whether or not an actual conflict does exist.   Actual Conflict - Exists where a personal or private interest exists and that interest: 1) Is known to the employee; and 2) Has a connection to the employee’s duties that is sufficient to influence the exercise of those duties.
CONTRACT	A purchasing document to evidence an agreement for the purchase of Deliverables.  Standing Offers and Purchase Orders are forms of Contracts.
CONTRACT PRICE	The amount payable by the Health Unit pursuant to Contract / Purchase Order.
DELIVERABLE	The subject matter of a Contract / Purchase Order, including goods, services (including consulting and/or construction), which a Supplier is required to deliver pursuant to the Contract / Purchase Order.
CFTA	Canadian Free Trade Agreement (2017), with all Protocols and Amendments (2019)
FAIRNESS	The Health Unit must avoid situations or circumstances that could give a Supplier an unfair advantage in connection with a Contract / Purchase Order or compromise the ability of a Supplier to perform its obligations under the Contract in the event of an Award.  Examples include:  access to confidential information providing an unfair advantage; lobbying of the Health Unit; personal relationships between key personnel of the Supplier and the Health Unit personnel; pending or current litigation between the Supplier and the Health Unit; or outstanding or unpaid obligations owed by one party to the other.
NON-DISCRIMINATION	At all times, Health Unit staff shall be impartial and not extend preferential treatment to Suppliers when evaluating Submissions and identifying the successful Supplier.
PURCHASE ORDER	A standard Purchasing document issued by the Health Unit to a Supplier to evidence an agreement for the Purchase of Deliverables.
PURCHASE ORDER TERMS AND CONDITIONS	The Purchase Order Terms and Conditions form part of every purchase order.  They take precedent over any and all previous verbal or written arrangements in connection with the subject matter of the Purchase Order.  The Purchase Order Terms and Conditions (Appendix A) will be posted on the Health Unit website.  A reference to those terms in conditions will form part of the Purchase Orders issued by the Health Unit using the following wording:  “The Purchase Order Terms and Conditions posted on the Health Unit’s website shall be incorporated into and form part of this Purchase Order.”
PURCHASING	Purchasing, renting, leasing, or otherwise acquiring Deliverables, including all functions that pertain to the acquisition, including planning, requisition, method of purchasing, contract management and payment.
RFI/I	Request for Information/Interest, a process used to research Purchasing, including which products and services are available, scope out business requirements, and/or estimate purchasing costs, among other things.
RFSQ	Request for supplier qualifications, a process used to gather information on supplier capabilities and qualifications, with the intention of creating a list of pre-qualified Suppliers for subsequent participation in an invitational RFS.
RFQ	Request for quotation, a process used to request Supplier responses to the supply of goods or services based on price and stated delivery requirements.
RFS	Request for submission, a process to request Supplier responses to supply goods or services based on stated delivery requirements, performance specifications, terms and conditions.  The Health Unit’s RFS template is designed to function as either a “RFP” or a “RFT”.
SOLICITATION	Refers to an RFQ and/or RFS
STANDING OFFER	A form of Contract requiring a Supplier to supply Deliverables on an “as required” basis pursuant to prearranged terms and conditions, including pricing over the term of the Standing Offer.  The Health Unit’s Standing Offers include such items as:  dental supplies; office supplies; clinic supplies; and maintenance supplies (building and/or housekeeping).
SUBMISSION	A response to and RFI/I, RFSQ, RFQ or a RFS issued by the Health Unit.
SUPPLIER	A person, corporation or other entity that responds, or intends to respond, to a RFI/I, RFSQ, RFQ or RFS issued by the Health Unit or provides goods or services to the Health Unit including, but not limited to, contractors, consultants, suppliers, service organizations, etc.
TOTAL LIFE CYCLE	An estimate or calculation that considers all direct and indirect Costs / Total LCC costs of a Deliverable over its useful life, from acquisition to disposal, including Contract / Purchase Order Price, implementation fees, upgrades, maintenance contracts, support contracts, license fees and disposal costs.
PROFESSIONAL SERVICES	Services that may, by legislation or regulation, be provided only by any of the following licensed professionals:  medical doctors, dentists, nurses, pharmacists, veterinarians, engineers, land surveyors, architects, accountants, lawyers and notaries.
EMPLOYER EXPENSES	General employer expenses including salaries and benefits; payroll deductions and remittances; training and education, including conferences and memberships; and reimbursable employee expenses.
GOVERNMENTAL CHARGES	Charges to and from other governmental bodies including federal, provincial and municipal.
ON-GOING PERIODIC CHARGES	General ongoing periodic charges such as in relation to mortgages, utilities, gas, communications, and banking.
SETTLEMENTS	Settlements for legal and or insurance and on account of reconciliations with funders.
LOW VALUE	Purchasing valued at less that $500.

Roles and Responsibilities

The Chief Executive Officer (CEO) shall:

1. Be responsible for the establishment, implementation, monitoring and enforcement of the Procurement Policy.
2. Management of all operations in material compliance with all applicable laws, regulations, orders, judgements and decrees, the Health Unit By-laws, Board resolutions, and all contractual obligations and commitments of the Health Unit.
3. Provide notice to the Board of any material non-compliance with the above listed items forthwith and additionally in the CEO Quarterly Compliance Reporting.
4. On an annual basis, report to the Board of Health details of all contracts awarded in excess of $50,000 including amendments and renewals.  The report shall certify that the procurements were undertaken in compliance with the Purchasing Policy.

The Leadership Team and Management Team (LT and MT) shall: 

1. Abide by and enforce the Procurement Policy.
2. Provide oversight and accountability for all procurement activities in their areas of responsibility.
3. Provide notice of material non-compliance with the Procurement Policy to the director and/or the CEO, as appropriate.

The Director of Corporate Services, in addition to the responsibilities noted above, shall:

1. Provide purchasing advice to the Health Unit Staff on account of their procurement activities;
2. Ensure on-going training and education is administered to the Health Unit Staff with the Procurement Policy;
3. Present the findings of the Procurement audit to the CEO, LT and Board, as appropriate, on an annual basis.

The Finance Department shall:

1. Ensure procurement documentation (i.e. purchase or cheque requisitions) are appropriately supported and approved before processing for order or payment;
2. Complete the necessary follow-up if procurement documentation is incomplete;
3. Specifically, the Manager of Accounting and Financial Reporting shall audit, at least annual, procurements in accordance with Appendix Q, and report the findings of the Procurement Audit to the Director or Corporate Services.

The Health Unit Staff Shall:

1. Abide by the Procurement Policy;
2. Review the Procurement Policy annually and attend all required training.

Procedure

This section describes the four phases of the procurement process in further detail.

Planning:  In the planning phase, the Health Unit shall:

• Ensure that the procurement is appropriate, in that it supports the strategic priorities or operational requirements of the Health Unit.
• Determination if the procurement is or is not budgeted:  A manager, in consultation with their director, shall determine whether the procurement being undertaken is budgeted or unbudgeted.  Currently, the budgeting methodology does not require for each activity to be budgeted.  Therefore, for the purposes of understanding whether a procurement is or is not budgeted, reference should be made to the departmental budget line in totality.  For example, if Environmental Health is required to procure promotional items such as insulated bags, the Manager of that department would review their program supplies account to understand whether there is or is not sufficient dollars to procure these items, given all of the remaining activities to be addressed by the program.  If dollars do not exist, the Manager would consult with their director to understand whether additional funding exists at a corporate level that would permit the purchase. 
• Procurement requirements:  In order to proceed with budgeted or unbudgeted purchasing, it may be necessary to retain further information about the Health Unit’s purchasing needs, the marketplace, or to create a pool of qualified Suppliers (in advance of the specific purchase). The following tools are available to facilitate the gathering of information:
  • RFI/I – In the event of insufficient information to adequately state purchasing objectives or adequately translate such objectives into specifications, if it is unclear generally as to Supplier capacity to deliver on objectives or specifications, or in the event it is unclear as to Supplier interest in a contemplated purchasing opportunity, raising concerns about likely level of Supplier response or questions with respect to the best method of purchasing, an RFI/I shall be used to gather such information.  Refer to Appendix B.
  • RFSQ’s – In the event it is desirable to:  reduce the number of Suppliers  eligible to make a Submission in response to a contemplated RFS to those most qualified; or create a list of Suppliers to be used for one or more future purchases, an RFSQ shall be used.  Refer to Appendix C.
• Calculation of procurement value:  An estimate of the value of a procurement is required to determine the method of procurement.  When calculating the value of the procurement the following considerations must be understood:
  • Subdividing Purchasing:  It is not acceptable to take any action such as subdividing purchases to reduce the estimated Contract price or otherwise avoid or circumvent the application of any requirements.
  • Extensions and Renewals:  If a Contract includes a provision permitting extensions or renewals, the estimated Contract Price shall be based on the total term, including initial term and any possible extension or renewal term.  Extensions or renewals beyond what is provided for in the Contract shall be considered non-competitive Purchasing and appropriate approval authorities shall be required (i.e., approval by the Board).
  • Other incidentals:  If Contract includes a provision for other incidentals including installation, operation, maintenance or manufacture of such goods or travel costs, the Health unit shall consider including those costs in its evaluation.
  • Interim Increases:  In the event that an amount in connection with which an approval authority has been given increases after having been given but before it has been acted upon, then it shall be necessary to seek approval authority for the increased amount.
  • Standing Offers:  In connection with Standing Offers, the estimated total price of the  Deliverables over the course of the specified term of the Standing Offer shall be deemed to be the estimated Contract Price.
  • Taxes and Duties:  Threshold approval authorities for any of the functional roles as outlined in this Purchasing Policy or any other monetary thresholds described in this Purchasing Policy shall be exclusive of taxes and duties.

Execution:  The Purchasing method can broadly be divided into competitive purchasing and non-competitive purchasing.  It is non-competitive Purchasing when the Health Unit purchases from a single Supplier, without considering what any other suppliers in the marketplace may offer.  Non-competitive procurement can be further subdivided into single sourcing and sole sourcing.

The Health Unit may conduct a single source non-competitive procurement, provided that they do so not for the purposes of avoiding competition between suppliers or to discriminate against suppliers:

• Where an unforeseeable situation or urgency exists and the goods or services cannot be obtained in time by means of open procurement procedures.  Failure to plan and allow sufficient time for a competitive procurement process does not constitute an unforeseeable situation of urgency;
• Where goods or services regarding matters of a confidential or privileged nature are to be purchased and the disclosure of those matters through and open tendering process could reasonably be expected to compromise government confidentiality, cause economic disruption or otherwise be contrary to the public interest;
• Where construction materials are to be purchased and it can be demonstrated that transportation costs or technical consideration impose geographic limits on the available supply base, specifically in the case of sand, stone, gravel, asphalt, compound and pre-mixed concrete for use in the construction or repair of roads;
• Where compliance with the opening tendering provisions would interfere with the entities’ ability to maintain security or order or protect human, animal or plant life or health; and
• In the absence of a receipt of any bids in response to a call for proposals or tenders.

The Health Unit may conduct a sole-source non-competitive procurement, where only one supplier is able to meet the requirements of a procurement, provided that they do not do so for the purpose of avoiding competition between suppliers or to discriminate against suppliers:

• To ensure compatibility with existing products, to recognize exclusive rights, such as exclusive licenses, copyright and patent rights, or to maintain specialized products that must be maintained by the manufacturer or its representatives;
• Where there is an absence of competition for technical reasons and the goods or services can be supplied only by a particular supplier and no alternative or substitute exists;
• For the procurement of goods or services the supply of which is controlled by a supplier that is a statutory monopoly;
• For the purchase of goods on a commodity market;
• For work to be performed on or about a leased building or portions thereof that may be performed only by the lessor;
• For work to be performed on property by a contractor according to provisions of a warranty or guarantee held in respect of the property or the original work;
• For a contract to be awarded to a winner of a design contest;
• For the procurement of a prototype of a first good or service to be developed in the course of and for a particular contract for research, experiment, study or original development, but not for any subsequent purchases;
• For the purchase of goods under exceptionally advantageous circumstances such as bankruptcy or receivership, but not for routine purchases;
• For the procurement of original works of art;
• For the procurement of subscriptions to newspapers, magazines or other periodicals; and
• For the procurement of real property.

Competitive Purchasing is when the Health Unit selects from among multiple offers from different Suppliers.  Competitive Purchasing can further be divided into open and invitational Purchasing.  It is open Purchasing when the supply opportunity is advertised publicly, such as on MERX, making it available to all qualified Suppliers.  It is invitational Purchasing when only selected Suppliers are invited to make Submissions.

Non-competitive procurement for purchase values ranging from $500 to $7,500, the following steps  will be undertaken:

• Health Unit staff can solicit a quotation from one Supplier for the procurement.  The manner through which quotations are solicited, should be in writing, to ensure that specifications are clearly laid out.  The RFQ template (Appendix D) may be used but is not required.
• Once the quotation is received from the Supplier, Health Unit staff must review to ensure that the quotation aligns with the specifications.
• Health Unit staff must then complete a Purchase Requisition Form (Appendix E) and append the quotation to the form.  All fields in the form are required to be filled, including the name of the Supplier and all relevant contact information, the date, the program code and expense code, the quantity, description and price (per unit and aggregated), the sub-total, tax and after tax amounts.  Health Unit staff must identify themselves as the initiator of the purchase (signature, title, date).
• Forward the Purchase requisition form to the individual recommending the Purchase for approval, typically the Manager and/or Director.  The individual recommending the Purchase would reconcile the quotation to the Purchase requisition form and confirm there is sufficient budget dollars to satisfy the Purchase.  Furthermore, the individual recommending the Purchase must verify that the program code and account number are accurate and identified appropriately. 
• Forward the Purchase requisition form to the approver (Director).  The approver would confirm that the quotation reconciles to the Purchase Requisition form and flag any issues that he/she may be aware of for discussion with the individual recommending the Purchase before allowing it to proceed.    All procurement shall be reviewed by the Director of Corporate Services for reasonableness and appropriateness.

Non-competitive procurement for purchase values ranging from $7,501 and above, the following steps will be undertaken:

• Non-competitive procurements will involve Manager, the Director, the Director of Corporate Services and the CEO.  The Manager and/or Director will provide justification for pursuit of this type of procurement to both the CEO and the Director of Corporate Services.  The circumstances associated with the procurement will be reviewed by the Director of Corporate Services, who will confirm the method of procurement.  For procurements $7,501 to $10,000, the Director shall discuss the procurement with the CEO, and if determined appropriate, the CEO shall approve.  For procurements $10,001 and above, the Director of Corporate Services will draft a resolution discussing the nature and rationale for such a procurement for review by the  Board Executive and approval by the full Board of Health.  To support the resolution, Health Unit staff would have undertaken the enclosed process to support the procurement value in the Board resolution:
  • The Manager and/or Director shall solicit a quotation from one Supplier for the procurement.  A quotation should be solicited in writing, ensuring that specifications are clearly and consistently laid out. 
  • Once the quotation is received from the Supplier, the Manager and/or Director must review to ensure that the quotation aligns with their specifications.
  • Provision of qualitative information in support of pursuing a non-competitive procurement. 
• Once approval from the Board is received, the Manager and/or Director must then complete a Purchase Requisition Form (Appendix E) and append the quotation to the form.  Reference should be made in the description field of the Purchase Requisition of the Board’s approval, including the date of the meeting.  All fields in the form are required to be filled, including the name of the Supplier and all relevant contact information, the date, the program code and expense code, the quantity, description and price (per unit and aggregated), the sub-total, tax and after tax amounts.  The Manager or Director must identify themselves as the initiator of the Purchase (signature, title, date).
• The Purchase requisition form must be forwarded to the individual recommending the Purchase for approval; in this circumstance, the Director.  The individual recommending the Purchase would reconcile the quotation to the Purchase requisition form and confirm there is sufficient budget dollars to satisfy the Purchase.  Furthermore, the individual recommending the Purchase must verify that the program code and account number are appropriate.
• Forward the Purchase Requisition Form to the approver.  The approver would confirm that the quotation reconciles to the Purchase Requisition form and flag any issues that he/she may be aware of for discussion with the individual recommending the Purchase before allowing it to proceed.  For this type of procurement, the approver is the Director of Corporate Services.

Competitive procurement:  A competitive procurement is when the Health Unit selects from among multiple offers from different Suppliers.  Competitive procurement can further be subdivided into open and invitational Purchasing.

For invitational purchases, typically purchases valued between $7,501- $100,000, the Health Unit invites Suppliers to make quotations.  The Health Unit should ensure that its process around invitational competitive Purchasing is defensible.  When undertaking invitational competitive Purchasing, selection of Suppliers invited to respond must be defensible on the basis of merit.  For greater clarity, Health Unit staff responsible for issuing invitations shall not choose invitees based on personal reasons – to do so is acting in Conflict of Interest and is subject to discipline as such. 

The following steps will be undertaken:

• Health Unit staff shall solicit a minimum of three quotations from Suppliers for the procurement.  Quotations should be solicited in writing, ensuring that specifications are clearly and consistently laid out for all Suppliers.  For procurements $7,501 to $10,000, a written solicitation is appropriate (i.e., email).  For procurements $10,001 to $100,000, Health Unit staff shall communicate in writing.  The solicitation shall be made using the RFQ template (Appendix D).  Note:  The RFQ template is a good guideline to ensure that Health Unit specifications for those lower dollar procurements ($7,501 to $10,000) are of sufficient detail.
• Once Submissions have been received from the Suppliers, Health Unit staff would review the Submissions and determine the successful Supplier.  Given the nature of these procurements, the successful Supplier would be the Supplier with the lowest value bid that meets all of the Health Unit’s stated requirements.  For example, if the lowest bid Supplier is not able to deliver the product until after the Health Unit’s stated deadline requirements, the next lowest Supplier who meets all the requirements may be awarded the Contract.  Health Unit staff should consult with the Manager and/or Director if other criteria are used to evaluate a successful Supplier.  Those considerations/conclusions should be documented in the procurement documentation.  At all times, Health Unit staff shall be impartial and not extend preferential treatment to Suppliers when evaluating Submissions and identifying the successful Supplier (Health Unit Code of Conduct).
• Health Unit staff must then complete a Purchase Requisition Form (Appendix E) and append the successful Submission to the form.  All fields in the form are required to be filled, including the name of the Supplier and all relevant contact information, the date, the program code and expense code, the quantity, description and price (per unit and aggregated), the sub-total, tax and after tax amounts.  Health Unit staff must identify themselves as the initiator of the Purchase (name, title, date).
• Forward the Purchase requisition form to the individual recommending the Purchase for approval, typically the Manager and/or Director.  The individual recommending the Purchase would reconcile the quotation to the Purchase requisition form and confirm there is sufficient budget dollars to satisfy the Purchase.  Furthermore, the individual recommending the Purchase must verify that the program code and account number are accurate for the program of purchase.
• Forward the Purchase Requisition Form to the approver (Director).  The approver would confirm that the quotation reconciles to the Purchase Requisition Form and flag any issues that he/she may be aware of for discussion with the individual recommending the Purchase before allowing it to proceed. 
• Forward the Purchase Requisition Form to the Director of Corporate Services for additional review and approval, assessing the reasonableness and appropriateness of the procurement. 

For open purchasing, typically those purchases valued at $100,001 and greater, the procurement is advertised publicly, such as on MERX, Biddingo and the Health Unit Website, making it available for all qualified Suppliers.  The following steps will be undertaken:

• The Director will identify a “Procurement Lead”.  This individual will be responsible for:  understanding the procurement requirements, completing or facilitating completion of the RFS document (Appendix F), be involved with communications between the Health Unit and Suppliers (i.e. amendments, questions, awarding of Contract, debriefing), the evaluation of Submissions (both compliance and quality), monitoring of Supplier performance, and confirmation of completion of work.
• The Director, in consultation with the Procurement Lead, will identify the Evaluation Team.  All Evaluation Teams shall consist of the Procurement Lead, the Director of Corporate Services, and one other Health Unit staff (typically a content expert). 
• The Procurement Lead, in consultation with the Director and the Evaluation Team, will compile the RFS (Appendix F).  Enclosed within the RFS are timelines that both the Health Unit and Suppliers must abide by.  In the event a circumstance arises that compromises the Health Unit’s ability to comply or changes the requirements of the procurement, the Procurement Lead, in consultation with the Evaluation Team, must revisit the terms and issue an Addendum (Appendix G).
• The Procurement Lead, in consultation with the Evaluation Team, will compile the Evaluation Team Handbook (Appendix H), setting out the guidelines for the Evaluation Team’s approach to evaluating the individual Suppliers.  The Evaluation Team Handbook will also include a scoring tool to be populated when the Evaluation Team convenes.  This tool should be circulated to the Evaluation Team for review and approval prior to the closing date of the RFS.
• Any questions that arise in advance of the closing of the RFS but before the query deadline will be addressed by the Procurement Lead in consultation with the Evaluation Team using the Responses to Supplier Questions Template (Appendix I).  At this juncture, the Director of Corporate Services may, with the consent of the CEO, consult with legal counsel for clarification.  Approved query responses will be posted as Addendums to the public website for all proponents to view.   
• In the event RFS responses are required in “hard copy”, the Procurement Lead shall contact the Manager of IT/Facilities and provide the appropriate instructions on how documents will arrive and the expectations for those documents to be date stamped.  The Manager of IT will direct reception on the appropriate treatment of the responses from the Suppliers.
• Upon closing the RFS, the Procurement Lead will review the Submissions to ensure that Submissions are in compliance with the time stipulated by the RFS.  If received after the closing time, the Submission will not be opened and will be rejected.  The Procurement Lead will use the Late Supplier Notification Template to communicate with those suppliers that submit late (Appendix J).  If received before the closing time, the Submission will be accepted, opened, copied and distributed to the Evaluation Team.  Similar procedures should be followed if the Supplier responses are received digitally.
• The Evaluation Team will review the Supplier responses separately, first, for compliance with the requirements of the RFS, and secondly, for quality of the response.  These criteria should be clearly laid out in the Evaluation Team Handbook (Appendix H).
• The Evaluation Team will meet to review the Submissions collectively.  The first component of the discussion will be to examine compliance of the Suppliers with the RFS requirements.  If matters of non-compliance are identified, the Evaluation Team will conclude on whether the non-compliance will/will not result in the exclusion of the Supplier from the remainder of the process.  This determination can be risky.  If the Health Unit fails to disqualify a Supplier when it should, other Suppliers may have a claim against the Health Unit.  However, if the Health Unit incorrectly disqualifies a Supplier, then that Supplier may have a claim against the Health Unit.  If there is any doubt as to the correct approach, legal counsel should be consulted.  The second part of the process is the evaluation of the quality of the Submissions with reference to the scoring tool prepared.  The Evaluation Team will share rankings and discuss their justification for how they scored.  An average of the Evaluation Team’s score will be the overall ranking of the Supplier in that specific category. 
• Providing the RFS allows (which the template is designed to do), after compiling overall rankings, if it is determined that two or more Suppliers’ overall scores are within 10% or less, it is recommended that those Suppliers be invited for an interview (either in person or using electronic media).  The interview will be no more than 1 hour in length allowing 10 minutes for set up, 15 minutes for presentation and 30 minutes for questions from the Evaluation Team.  The majority of the questions shall be prepared in advance based upon the Supplier’s Submission.  Some flexibility should be given if content presented during the course of the Supplier’s presentation requires additional clarification.  Once all interviews are concluded, the Evaluation Team will meet to rank the Suppliers’ interview.  At this juncture, the overall ranking of the Suppliers will be updated to reflect interview scores.
• At the conclusion of the Evaluation Process, the Procurement Lead will calculate the overall score by Supplier and collectively conclude on the successful Supplier.  
• The Procurement Lead will use the Award Letter Template and Regret Letter Template as applicable and follow the policies set out in the applicable template (Appendices K and L respectively).  Furthermore, the Procurement Lead will post the Supplier name and if price was the only evaluation criterion, then also post the price on the Health Unit’s website. 
• After formal notification of the Award, the Procurement Lead will:
  • Ensure the RFS Exhibit B – Contract form is appropriately completed and signed by the CEO of the Health Unit as well as a signing officer of the Supplier with the authority to bind the corporation.   Two hard copies of the Contract should be exchanged for signature, one copy for each respective party to the Contract.
  • Obtain the WSIB Clearance Certificate or Equivalent from the Supplier.
  • Obtain a Certificate of Insurance from the Supplier.
  • Establish a planning meeting (either in person or via teleconference) to confirm logistics and kick off the assignment.

Debriefing.  Debriefing shall only be offered if the solicitation contemplates debriefing or the Director of Corporate Services authorizes it.  The Debriefing Handbook shall be used for debriefings and the policies in that Handbook shall be followed (Appendix M).

In a competitive Purchase (invitational or open) the following should be noted:

Supplier Communications in Context of Competitive Purchasing.

For solicitations valued at $100,001 or Greater:

• Meetings.  Supplier meetings for Purchasing valued at $100,001 and greater shall be managed as follows:
  • When meetings are part of the procurement requirements, there shall be a sign in process.
  • Any other requirements set out in the RFS, such as number of attendees from a bidder, shall be enforced.
  • Minutes of the Supplier meeting shall be recorded in the form of the Supplier Meeting Minutes Template (Appendix N) and posted on the Health Unit Website as soon as possible but in any event not later than four days prior to Closing.
  • If no meetings are contemplated by the RFS, then none shall be held.
• Supplier Questions.  Supplier questions for Purchasing valued at $100,001 and greater shall be managed as contemplated by the RFS, using the Responses to Information and Clarification Requests and Questions Template.

No other Supplier communications shall be had.

For solicitations valued at less than $100,000:  Supplier meetings and questions for purchasing valued at less than $100,000 shall be managed informally, having regard to the requirement that Health Unit staff shall be fair and impartial and not extend preferential treatment to any Supplier.

Amendments to Competitive Purchasing Solicitations.  Amendments to competitive Purchasing solicitations valued at:

• $100,001 or greater, shall be managed using the Addendum Template (Appendix G) and following the policies set out in that template; and
• Less than $100,000, shall be managed informally, having regard to the requirement that Health Unit staff shall be fair and impartial and not extend preferential treatment to any Supplier.

In either circumstance, it may be necessary to give Suppliers an extension to allow adequate time to modify and re-submit their proposals.

Termination of Competitive Purchasing Solicitations.  Termination of competitive purchasing solicitations valued at:

• $100,001 or greater, shall be managed using the Termination Template (Appendix O) and following the policies set out in that template; and
• Less than $100,000, shall be managed informally, having regard to the requirement that Health Unit staff shall be fair and impartial and not extend preferential treatment to any Supplier.

Closing Procedures in Context of Competitive Purchasing.  The closing date and time in the context of competitive purchasing are of critical importance, as submissions received after that time shall not be opened or considered.  To manage Closing:

• For solicitations valued at $100,001 or greater:
  • Submissions shall be date and time stamped immediately upon receipt and kept secure.
  • Suppliers whose submissions are late shall be notified with the Late Supplier Notification Template (Appendix J).
• For solicitations valued at less than $100,000, shall be managed informally, having regard to the requirement that Health Unit staff shall be fair and impartial and not extend preferential treatment to any Supplier.

Evaluation of Submissions in Context of Competitive Purchasing.  Submissions for purchasing valued at:

• $100,001 and greater, shall be evaluated as contemplated by the RFS, using the Submission Evaluation Handbook and following the policies set out in that Handbook.  The Purchase Lead shall:
  • Create an Evaluation Team Handbook using the Evaluation Team Handbook Template (Appendix H).
  • Distribute the Evaluation Team Handbook to the Evaluation Team.
• Less than $100,000, shall be managed informally, having regard to the requirement that Health Unit staff shall be fair and impartial and not extend preferential treatment to any Supplier.

Award/Regret Notification.  For competitive Purchasing notification of Award or regret, shall be undertaken as follows:

Contract / PO Price	Form	Posting
$100,001 and greater	Use Award Letter Template and Regret Letter Template as applicable and follow the policies set out in the applicable template.	Post Supplier name and if price was the only evaluation criterion, then also post price on Health Unit Website The posting shall include: A description of goods or services procured; The name and address of the procuring entity; The name and address of the successful supplier; The value of the successful submission; The date of the award.
$10,000 - $100,000	Use Award Letter Template and Regret Letter Template as applicable and follow the policies set out in the applicable template.	No requirement
$500 - $9,999	Manage informally. If Deliverables are other than goods or consulting services, then consider request for evidence of WSIB or explanation if not applicable and standard insurance coverage.	No requirement

Other procurement circumstances

Banking services:  The Health Unit shall periodically, but not longer than ten (10) years, complete an open competitive procurement to secure the services of a financial institution in which the money or other financial instruments of the Health Unit shall be placed for safekeeping.

Insurance broker:  The Health Unit shall periodically, but not longer than ten (10) years, complete an open competitive procurement to secure insurance brokerage services that will facilitate the Health Unit to secure insurance coverage that is consistent with the sector norms for like organizations and other such services as determined from time to time by the CEO. 

Vendor of Record and Procurement through a Buying Group

A Vendor of Record (“VOR”) arrangement is a list of vendors resulting from a procurement process that meets the requirements of the government procurement directive.  This type of arrangement allows for one or more vendors to offer specific goods or services to buyers.  This arrangement is valid for a specified period of time under defined terms and conditions and is typically established through a request for proposal process through an electronic tendering system.  The Health Unit would qualify to use the Ontario VOR arrangements depending upon the nature of the arrangement.  Certain arrangements can allow the Health Unit to access pricing.  Certain of the arrangements allows the Health Unit to access vendors however it must enter into its own agreement based upon its procurement levels. In this instance the VOR listing would be used a pre-qualification listing for which the Health Unit would base their procurements upon.

Procurement through a Buying Group is permitted under the CFTA.  A Buying Group is defined as “a group of two or more members that combines the purchasing requirements and activities of the members of the group into one joint procurement process.  Buying groups include cooperative arrangements in which individual members administer the procurement function for specific contracts for the group and more formal corporate arrangement in which the buying group administers procurement for group members.  Buying groups may consist of a variety of entities, including any combination of procuring entities, private sector entities, or not-for-profit organizations.” [CFTA Article 520 – Government Procurement – Specific Definitions].  Depending on the nature and circumstances surrounding a procurement, there may be an opportunity for the Health Unit to leverage off of, or participate in, a Buying Group.  

A buying group shall publish a notice of each procurement, listing the participating procuring entities and outlining the potential for other procuring entities to participate after the procurement is put in place.

Contract/PO Management and Fulfillment

In order to ensure the Health Unit Purchasing expectations are met, it is critical that Contracts be pro-actively managed by the Health Unit.

Management goals – Contracts/PO’s shall be managed responsibly and effectively to:

• Ensure Deliverables delivered.
• Ensure timelines met.
• Ensure specifications met.
• Ensure performance evaluations conducted on a fair and timely basis.
• Identify performance issues on a timely basis.
• Resolve performance issues on a timely basis.
• Contribute to the process of continuous quality improvement.
• Maintain productive working relationships with Suppliers.
• Reduce the potential for disputes and legal action.
• Ensure accepted Deliverables are properly reflected in the Health Unit asset inventories as appropriate.

For procurements valued $500 to $25,000, the initiator of the Purchase, in conjunction with their Manager, are responsible for managing the Contract management goals.  If during the course of the Contract performance and quality issues are identified, the Manager shall consult with the Director of Corporate Services on how best to rectify deficiencies (i.e. return of goods; credit; etc.). 

For procurements valued $25,000 and greater, the Procurement Lead will be responsible for monitoring Supplier performance.  Having regard to the Contract management goals, the Procurement Lead shall monitor Supplier performance:

• As reasonably required, having regard to the value of the Purchase and associated risk if performance is not satisfactory;
• Upon completion of milestones related to the Purchase; and
• Prior to any payment being made to the Supplier.

The Procurement Lead shall report to the Director of Corporate Services upon becoming aware of any circumstances that have occurred or risks which look reasonably likely to occur, and are reasonably likely to have a material adverse impact.  Material adverse impacts are those that threaten the delay of purchase milestones by more than 10%; threaten to increase the cost by more than 10%; or threaten to create hazardous or dangerous conditions to health or safety either in the short, mid or long-terms.

Payment

As an organization funded by taxpayers with a mission to work with the community to promote, protect and improve health and well-being for all, it is critical that the Health Unit be a responsible steward of all funds entrusted to it and that payments made to Suppliers are appropriate and managed within the system that ensures the Health Unit’s responsible management of funds.  

To achieve this, the individuals involved with the procurement process must:

• Abide by the procurement policies, including ensuring that appropriate steps are taken to procure products or services and obtain appropriate approvals throughout the process;
• Monitor and/or review to ensure that the Supplier is abiding by the terms of the Contract.  This includes following up to ensure that the Supplier is abiding by timelines for delivery and reviewing the products and or services to ensure they meet the procurement specifications. 
• Communicate to the Finance Department that there were deficiencies with Deliverables and whether to proceed with payment or defer until deficiencies are rectified (e.g. through provision of appropriate product; provision of discount; etc.).

In summary, payment can be made in the following manner:

• Payment by corporate credit card – Payment of any procurement on the corporate credit card will be undertaken by the Corporate Services Division, more specifically the Finance Department and/or the Executive Assistants to the Leadership Team.  Payment must be supported as directed by the procurement method as discussed above.  On a monthly basis, all Purchases are reconciled by the Administrative Assistant to the Director of Corporate Services and subject to review and approval for payment, by the Director of Corporate Services and the CEO.  Payments on account of the corporate credit card are completed monthly by Pre-Authorized Payment (“PAP”) or more frequently using Electronic Funds Transfer (“EFT”).  These payments must be supported by a Corporate Card Payment Requisition signed by the Director of Corporate Services and the CEO.
• Payment by Cheque:
  • Payment by cheque or EFT supported by cheque requisition – These procurements must be supported by a cheque requisition signed by the appropriate signing authorities as well as the invoice.  All cheque requisitions must include the following sign offs:
    • Signature and title of the Initiator of the Purchase, as well as the date of completion of the cheque requisition by the Initiator.
    • Signature and title of the Recommender (typically the Manager or the Director) as well as the date of their review of the cheque requisition and support (i.e. invoice).
    • Signature and title of the Approver (typically the Director), as well as the date of their review of the cheque requisition and support (i.e. invoice).
  • Payment by cheque, supported by purchase requisition – These procurements must be supported by a purchase requisition signed by the appropriate signing authorities as well as the invoice in support.  If Health Unit staff, other than the Finance Department, receive invoices directly for items that have been procured through a purchase requisition, they should forward the invoice to the Finance Department for payment.  Finance will append the invoices to the approved purchase requisition.
  • Dollar variances in purchase requisitions – Each Manager(s) should make every effort to ensure that pricing information, as well as product codes, should be reflective of latest available information.  In the event that actual pricing differs from pricing on the requisition, the Finance Department will identify the variance on the pink copy of the purchase requisition form and return it to the Manager for review and to ensure that internal financial tracking is appropriately updated.  The pink copy of the purchase requisition will be returned, upon receipt of the final invoice for goods received or services rendered by the Finance Department.
  • Payments by cheque are issued by the Finance Department a minimum of twice monthly.
  • Cheques are signed by any two signing authorities, the Director of Corporate Services, the CEO, and Chair, Vice-Chair and Treasurer.  The Director of Corporate Services and CEO are responsible for ensuring that all documentation is reviewed and approved by all parties and that the expenses are appropriate, in that they help to achieve the Health Unit’s own objectives. 

Approach to procurements that fall under exceptions, excluding salaries

Authorization of these transactions typically occurs through contractual obligation.  The CEO is permitted to bind the Health Unit.  Review of contractual obligations will typically involve the relevant Manager and Director, and the Director of Corporate Services from a financial perspective.  Additional review may be required by legal counsel. 

In terms of billing, the following process has been established:

• The invoice or other supporting document (i.e. Contract, Oral Health Department DDS Time Sheet; Tobacco Test Shopper Time Sheets) submitted by Supplier to the Health Unit. 
• The Manager will review the invoice or supporting document for accuracy, completeness and achievement of all procurement management goals (refer to the definition in the Contract/PO Management and Fulfillment section of the policy).

• The Manager will complete a Cheque Requisition Form (Appendix P) and append the invoice or supporting documentation.  All fields prompted in the form are required to be filled, including the name of the Supplier and all relevant contact information, the date, the program code and expense code, the quantity, description and price (per unit and aggregated), the sub-total, tax and after tax amounts.  The Manager must identify themselves as the initiator of the Purchase (signature, title, date).
• Forward the Cheque Requisition Form to the individual with direct authority to recommend the Purchases, typically the Director.  The Director will review and confirm that the invoice or supporting documentation reconciles to the Cheque Requisition Form and flag any issues that he/she may be aware of before proceeding with payment.  The Director must identify themselves as the recommender of the Purchase (signature, title, date).
• Forward the Cheque Requisition Form to the approver.  For purchases of $0 to $10,000 the approver will be the Director of Corporate Services.  For purchases of $10,001 and above, the approver will be both the Director of Corporate Services and the CEO.  The approver will include their signature, as well as the date of their review of the Cheque Requisition form, invoice or other supporting documentation.

Delivery of goods

Goods can be ordered by Health Unit staff at the department level or by the Accounts Payable Clerk in the Finance Department.  When goods are ordered, it is imperative that Health Unit staff ask the following questions of the Suppliers:

• What is the size of the delivery (number of boxes; size of.)?
• How will it be delivered (individual boxes; skid; etc.)?
• When will the delivery arrive (date and approximate time)?

If Health Unit staff determine that the delivery is a significant volume (i.e. 100 boxes of product “x”), it is imperative that a ticket be logged with Facilities Department to advise them of the size of the order and the delivery date.  It is also imperative to advise the Facilities Department whether the goods are required to be maintained on site or in off-site storage.  The Health Unit needs to appropriately plan for large orders given the lack of on-site storage space. 

Review

The Procurement Policy shall be reviewed at a minimum of every two (2) years.  Revisions to the Procurement Policy shall be approved by the Board.

Retention

All procurement activities governed by Procurement Policy applies shall be documented and retained in accordance with the Health Unit’s Record Retention Policy. 

Audit

All procurement activities governed by the Procurement Policy shall be audited in accordance with the Audit Guidelines included in Appendix Q. Audit procedures shall be completed on a quarterly basis, with findings reported to the Board quarterly.

Compliance

Failure to comply with this Policy and any associated Procedures may result in appropriate disciplinary measures.  Please see WECHU’s Discipline Policy.

Related Documents

Canadian Free Trade Agreement https://www.cfta-alec.ca/canadian-free-trade-agreement/