FAQ For Vendors
What changes were made to the Government Contract Regulations that came into effect on April 1, 2016?
Changes to the limits for sole source procurement of construction, goods and services were made as well as a change to the definition of what professional services are.
- An increase from $5,000 to under $25,000 for the procurement of untendered general goods and services
- An increase from $25,000 to under $50,000 for the procurement of untendered professional services*
- A further increase from $25,000 to under $100,000 if the professional services procured are for architectural or engineering services.
*professional services are further defined to include those professions which have NWT legislation associated with their organizations.
Changes to BIP, effective April 1, 2016 include:
- Clause 8.(a) $5,000 or less was revised to read: Page 2 of 6 Contracts less than $25,000 Whenever possible, goods, services and construction valued at less than $25,000 should be purchased directly from BIP Businesses in the Local Community, but no bid adjustment will be applied.
Sole sourcing the procurement of goods and services simply means entering into a contract directly with a business or contractor without going through a competitive process like tendering or request for proposal (RFP).
The GNWT implemented the change primarily to support Local and Northern businesses. These changes mirror modern management practices in other jurisdictions and make it possible for the GNWT to focus on higher value and more complex procurements and Standing Offer Agreements (SOAs).
How do the changes affect the way government departments purchase or procure goods and services under $25,000?
Goods under $25,000 or services under $10,000 may be purchased directly by departmental staff from a supplier without having to go to a formal tender, but only in the recommended order of preference outlined below. If the services are over $10,000 to $25,000, a service contract must be issued by Procurement Shared Services (PSS) and not by a department directly. Order of preference: 1. Locally, from a BIP‐registered vendor; if none available to supply the goods or service, then 2. Regionally, from a BIP‐registered vendor; if none available to supply the goods or service, then 3. In the NWT (northern), from a BIP‐reg Page 3 of 6 4. In the NWT (northern), from a non BIP‐registered vendor; if none available to supply the goods or service, then 5. From a southern vendor. This order of preference applies to contracts for professional, architectural and engineering services valued at under $25,000 as well.
For under $25,000, sole sourcing is only one of many methods the government may use to procure goods and services and to achieve best value. Other methods include the use of SOAs, and requests for quotations, tenders or proposals. It is recommended that departments obtain two quotes as a minimum to ensure that they are getting the best value for the GNWT.
The Department of Industry, Tourism and Investment's (ITI) website has the BIP registry. For goods, the vendor MUST be registered for the relevant commodity group. For services, the vendor is NOT REQUIRED to have identified what services they are registered for; if the vendor shows up on the BIP registry, they are included for all service categories.
It is recommended that SOAs be used whenever possible, if they are available. If no SOAs are available for the goods and services required, the department should follow the order of procurement set out in Q6 or go out to a public procurement process. Page 4 of 6
Can a department purchase from a southern vendor if they offer a greater cost savings thana BIP‐registered northern vendor?
It is recommended that a SOA be used first, if available. If no SOA is in place, then the department can procure the goods or services from a Local or NWT BIP‐registered vendor first or go out to a public procurement process. Department cannot consider a southern vendor for a sole source under $25,000 if there is a BIP‐registered business available to provide the goods and services; otherwise, a formal competitive process must be initiated through PSS. This ensures that the GNWT supports BIP‐registered companies wherever possible.
If an air charter is valued at less than $10,000, this service may be contracted following the process outlined in Q6. The department should use the Air Charter Contract Form from PSS containing all the required clauses that protect the GNWT, which needs to be signed by both parties. For air charters valued at $10,000 or more, PSS will manage these procurements.
Professional services that may be sole sourced are now defined as only those professions established or regulated by Act of the Northwest Territories with no exceptions. The sole source limit has increased from $25,000 to $50,000 for listed professional services. All sole source contracts over $25,000 must be handled by PSS.
How do the sole source changes affect how a department can procure architectural and engineering contracts over $25,000?
Sole source limits increased from $25,000 to $100,000 for architectural and engineering services. All sole source contracts valued at more than $25,000 must be handled through PSS unless handled by project officers from the Department of Infrastructure and the NWT Housing Corporation as a project. Page 5 of 6
Yes. The changes to sole source limits do not apply to leases, or to products listed under the NWT Manufactured Products Policy. Sole sources for these goods and services must be managed by PSS unless handled by project officers from the Department of Infrastructure and the NWT Housing Corporation as a project.
Credit card limits can now be increased to $10,000; however, it is up to each department to determine if they want to increase credit card limits.
Staff must be knowledgeable on spending/contract authority. This includes, but is not limited to, adhering to the following principles:
- Take reasonable steps to obtain the best value for government money, including necessary documentation that shows that they followed the appropriate procurement process
- Understand and comply with the BIP
- Understand and comply with the NWT Manufactured Products Policy
- Understand and comply with the Financial Administration Manual
- Do not split procurement requirements to circumvent limits (contract splitting)
- Never sign a “vendor’s” contract. As a rule, only GNWT‐issued contracts should be signed by both parties.
- Ensure that vendors providing services have the proper insurance requirements
- Obtain a letter of good standing from the Workers Safety and Compensation Committee, when applicable, before a service contract Page 6 of 6 begins and obtain a final clearance letter before approving a final service contract payment
- Be responsible for the safety of contractors or services when they operate on GNWT property
- Maintain a file of the sole source contract for audit purposes.