Questions and Answers on Accommodation

Q1. Why is the government changing the way it procures accommodation services?

A1. The Government of Canada (GC) is streamlining and transforming the way it procures accommodation services for government employees on authorized business travel. This will provide better value and accountability for Canadian taxpayers.

Public Works and Government Services Canada (PWGSC) is committed to ensuring that procurement is both accountable and cost-effective, supporting the goals of the GC’s new Accountability Act and Action Plan.

The GC spends an estimated $345M on accommodation services every year. The Government is looking at saving 15% annually.

The goal of the procurement transformation is to ensure better value for Canadian taxpayers while making procurement simpler, and ensuring fair, simple and open access for suppliers - both large and small - across Canada.

Q2. How is the government currently procuring accommodation services?

A2. The GC Accommodation Directory is currently open to any property that meets the mandatory requirements. For example, they must be a licensed property, show that they offer clean, safe and comfortable accommodation, and offer the government a rate of less than $200 a night.

Q3. What is going to change?

A3. Through the Government of Canada’s Procurement Transformation initiative to consolidate government business volume and generate substantial savings in select commodities, a new method of supply had been developed for the Accommodation Program and a number of identified urban and airports centres "Select Markets" have been identified where the new method will be applied. These are:

The downtown areas of Calgary, Edmonton, Halifax, Montreal, Ottawa, St. John's, Toronto, Vancouver and Winnipeg, and the airport areas of Montreal, Toronto and Vancouver.

In past years, all suppliers of government accommodation have been sent the same Request for Standing Offer package. For suppliers located outside the Select Markets listed above, the method of supply utilized in the past will not change for the 2007 Accommodation Directory. However, suppliers located within the Select Markets will be sent a different package, with a different method of supply with the goal of consolidating volume. Stipulation of boundaries and definition of each Select Market is contained in the new RFSO.

Q4. What is the difference between the two RFSOs?

A4. The first RFSO for suppliers located outside the identified urban centres and airports will be the traditional package that has been used in past years.

The second RFSO for suppliers located in the identified urban centres and airports will introduce some changes from past practices.

Q5. How will the government get better value for Canadians through the RFSOs?

A5. The government will seek better value for Canadian taxpayers by:

Reducing and standardizing the types of room available to four instead of seven.
Having an annual rate instead of monthly rates.
Introducing volume consolidation for increased competition between hotels in the same category.

Q6. Under the new RFSO, will government employees have a choice in the types of accommodations they can select?

A6. Yes however, the accommodations will be standardized and room types will be reduced from seven to four to provide flexibility to its travelers.

Q7. How much is the government currently spending on Accommodation services?

A7. The total estimated cost for accommodations is $345M annually, including PST, GST or HST, as well as destination marketing fees, state sales and occupancy taxes, if applicable. It is estimated that the select markets represents 85% of the domestic expenditure or $205M.

Q8. How much is the government hoping to save through the new RFSO?

A8. The goal is to achieve savings of 15% annually.

Q9. How will the RFSOs impact small and medium sized enterprises (SMEs)?

A9. SMEs will get the same treatment as other potential suppliers in the select markets, as long as they are fulfilling the mandatory criteria. All SMEs participating must have a rating of three-star and above under the Canada Select or equivalent in the select market RFSO. It should be noted that there is no requirement on the size or capacity of accommodation properties that can bid. A winning GC Standing Offer will most likely result in more business in select markets.

The RFSO will offer a level playing field to both individual properties and corporate owned chain properties. Select markets will likely have individual properties among winning suppliers, which are not corporate owned (chains).

There will be no consolidation of suppliers in non-selected markets ensuring small hotels have an equal opportunity of business.

Q10. Will the RFSO have an environmental element to it?

A10. Yes. The government will continue to promote properties that have an environmental rating such as Green Leaf Eco-Rating Program; and Hotel Association of Canada Green Key Eco-rating Program in the Government of Canada Accommodations Directory.

Q11. Has the government consulted with the suppliers before issuing the RFSOs?

A11. Yes. A letter was posted on MERX – the Government’s electronic tendering service - and was sent to accommodations suppliers located within the identified select markets ahead of time to inform industry of the changes in the method of supply. The letter spoke of the Government of Canada’s transformation agenda and explained the RFSO process.

Bidders conference will also be held to walk the suppliers through the solicitation document and through the bidding process in detail.

Q12. What are the benefits for Government, Businesses and Canadians?

Government:

Consolidate government business volume and generate substantial savings in select commodities including accommodations.
Purchasing will be more efficient for all departments.
Improved ability to account for taxpayers’ dollars spent on Accommodation services.

Businesses:

Fair, simple and open access for suppliers across Canada regardless of size and location.
Winning a competition to supply the government will actually mean winning business.
Opportunities for small and medium enterprises (SMEs) to have a share of the business with the federal government.

Canadians:

Canadians get the assurance that their government is getting the best value on their behalf in an open, fair and transparent way.
The environment – one of Canadians’ key priorities – is a key consideration in doing business with the government.

Q13. When will the RFSO be issued?

A13. The RFSO was published on the Government's Electronic Tendering Service (MERX) and is now closed.