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Doing Business with the Ontario Broader Public Sector: A Guide for Small and Medium Enterprises

Doing Business with the Ontario Broader Public Sector: A Guide for Small and Medium Enterprises

 

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Table of Contents

INTRODUCTION

Are you a small or medium enterprise looking for business opportunities with Ontario's health and education sectors? Are you working for a sole proprietorship, partnership, corporation or any other legal form of business organization with up to 500 employees? Are you planning to start a new business or seeking to expand your current one?

However small your business, or at whatever stage you may be in your operations, this guide is for you. It is a reference for all those seeking general information about purchasing in the broader public sector.

The Ontario Broader Public Sector is the public face of government – the hospitals, schools, other publicly funded organizations – that provide the day-to-day services to the community and the province as a whole. It is always looking for suppliers for just about every category of commodity and service it purchases, from paper clips to advanced diagnostic and therapeutic equipment.

Doing Business with the Ontario Broader Public Sector will assist new and existing businesses in understanding broader public sector purchasing in Ontario, and help these businesses submit a bid that suits the buyer's requirements. It is useful for those needing information to introduce a new product or innovative solution. It is a guide for those exploring other markets and those about to make operational or strategic business decisions.

THE PUBLIC SECTOR AND THE BROADER PUBLIC SECTOR

The Ontario public sector includes government organizations such as ministries, agencies, boards and commissions. Each organization purchases products and services guided by its own rules and regulations.

Organizations in the Ontario broader public sector also do their own purchasing and are accountable for their own operations.

Because the administration and management of, as well as the services provided by, the broader public sector are complex, such organizations are covered under separate policies and guidelines for purchasing.

HOW THE BROADER PUBLIC SECTOR BUYS

Broader public sector organizations buy goods and services directly or as a group, following their own procurement policies and guidelines.

Buyers may integrate their own purchasing activities under a shared services organization,* a group purchasing organization or a regional collaborative, to achieve more efficient and effective service delivery in the process.

*Shared service organizations specialize in supply chain management and back office functions that help achieve efficiencies in operations. Their services can include sourcing, procurement, contract management, warehousing, logistics, accounts payable and payroll. In Ontario shared service organizations are located in cities across the province. They provide collaborative procurement as well as a variety of logistical and operational support for their member organizations and other customers.

Ontario promotes the adoption of supply chain* management leading practices by the broader public sector but it is up to the individual organization to determine what works best for its operations.

*Supply chain is the flow of goods and services, information and money between buyers, vendors and end users.

Broader Public Sector Accountability Act, 2010

Under the Broader Public Sector Accountability Act, 2010 designated broader public sector organizations are bound by expense and procurement rules to ensure open, fair and transparent procurement processes when purchasing goods and services with public funds.

The act:

• bans the practice of hiring external lobbyists using public funds
• establishes consistent procurement practices and expense claim rules for certain broader public sector organizations
• adds accountability measures related to compliance.

It also defines designated broader public sector organizations to include:

• every hospital
• every school board
• every university, college of applied arts and technology and post-secondary institution in Ontario
• every children's aid society
• every community care access corporation
• every corporation controlled by one or more designated public service organizations that does purchasing primarily for said organizations
• every publicly funded organization that receives $10 million or more from the Government of Ontario
• every organization that may be included under this definition.

Broader Public Sector Procurement Directive (BPS Procurement Directive)

The BPS Procurement Directive supports and helps improve supply chain activities at Ontario's broader public sector organizations.

The BPS Procurement Directive requires designated broader public sector organizations to:

• acquire publicly funded goods and services, including construction, consulting services and information technology, through a process that is open, fair and transparent
• establish clear lines of accountability for delegation of authority and procurement approvals.

The BPS Procurement Directive is based on the principles of:

• accountability
• transparency
• value for money
• quality service delivery
• process standardization

It includes a protocol of conduct and compliance measures in the Supply Chain Code of Ethics and Procurement Policies and Procedures.

Supply Chain Code of Ethics

The Supply Chain Code of Ethics establishes a code of conduct that organizations must formally adopt as part of their procurement activities.

It must be available to all staff as well as suppliers, and all those involved in procurement processes.

Procurement Policies and Procedures

The Procurement Policies and Procedures sets out the 25 mandatory requirements of the BPS Procurement Directive.

The buyer gets maximum value for money for the products or services purchased in order to provide the most effective services.

The vendor gets fair access to information on buying opportunities, processes and results to be able to compete on a level playing field.

LAWS AND TRADE AGREEMENTS

Health care and educational institutions are bound by certain laws and current trade agreements when buying goods and services.

Canadian Law of Competitive Processes and Contract Law

When a health care or educational institution buys a product or service, the law of competitive processes and contract law apply. Proposals should be conducted in a fair and transparent manner without undue advantage to any one party. Both the buyer and the vendor agree to abide by the terms, language and meanings and interpretations of the contract.

Agreement on Internal Trade

Under the Agreement on Internal Trade, all suppliers in Canada have equal access to public sector purchasing through the use of electronic tendering, print advertising or source lists. For the broader public sector, this includes goods and services from $100,000 and construction from $250,000.

Ontario-Quebec Trade and Cooperation Agreement

The 2009 Ontario-Quebec Trade and Cooperation Agreement gives local suppliers from Ontario and Quebec equal access to public sector purchasing in each province. This covers open competitive purchases for goods, services and construction from $100,000.

Privacy legislation

The Ontario Freedom of Information and Protection of Privacy Act and the Municipal Freedom of Information and Protection of Privacy Act apply to some organizations.

If either of the acts applies to an organization, the statutes could affect how an organization conducts a procurement process and how the procurement documents are drafted. The procedures set out in the acts allow a member of the public to obtain copies of certain records that are in the custody or control of an organization. For example, a member of the public could submit an information request for records related to a procurement, such as trade secrets or intellectual property. It is not unusual for notes, emails, memos, letters or other documentation to be the subject of an information request.

Buyers and vendors should seek legal advice regarding the application and scope of the Ontario Freedom of Information and Protection of Privacy Act and the Municipal Freedom of Information and Protection of Privacy Act.

Accessibility legislation

The Accessibility for Ontarians with Disabilities Act, 2005 benefits all Ontarians by developing, implementing and enforcing accessibility standards in order to achieve accessibility for Ontarians with disabilities with respect to goods, services, facilities, accommodation, employment, buildings, structures and premises on or before January 1, 2025. The act provides for the involvement of persons with disabilities, the Government of Ontario, representatives of industries and various sectors of the economy in the development of the accessibility standards.

Buyers and vendors should seek legal advice regarding the application and scope of this act. If this act applies to an organization, it could affect how an organization conducts a procurement process and how the procurement documents are drafted.

BIDDING FOR A BROADER PUBLIC SECTOR CONTRACT

Whether you're a large company or a small or medium enterprise, selling to the broader public sector is very similar to selling to the private sector. The rules may be different, but the same marketing techniques apply.

Here's how you can get started.

Know your market

Who are your potential buyers?

Look up healthcare or educational institutions that may be in need of your product or service. Broader public sector organizations use electronic advertising to post any open competition for goods, services and construction. Some may also advertise in local newspapers.

Others may issue a Request for Proposal to solicit solutions for the delivery of complex goods, services or construction. It is a process that uses predefi ned evaluation criteria in which price is not the only factor.

Some buyers may issue a Request for Tender for goods and services based on stated delivery requirements, performance specifi cations, terms and conditions. A Request for Tender usually focuses the evaluation criteria on price and delivery requirements.

Others may require a Request for Quotation where the buyer specifies the product or service and the criteria is based solely on price.

There are specified circumstances under which a buyer may issue a Request for Proposal, Request for Tender or Request for Quotation. A competitive procurement, however, could also be invitational; in some circumstances, competitive procurements are not required.

To add to a pool of potential vendors, some buyers may do a Request for Supplier Qualifications to help identify qualified suppliers should a need arise in the future. This method may be used by an organization to draw up a Vendor of Record or Preferred Suppliers List. The buyer is able to select from one or more pre-qualified vendors through an open and competitive process, inviting potential suppliers for a certain category of product or service. The terms, conditions and pricing are set out in the original vendor of record agreement.

A Request for Information is a way to gather general supplier, service or product information. Suppliers are given a general description of a problem or need with a request to provide advice or an alternative solution. In some instances, the buyer may agree to try out a new product for a specified period of time, usually in cases where the need is for an innovative technological solution. This allows a supplier to demonstrate a product in actual use but does not pre-qualify the supplier nor influence its chances in a future competition.^*

*The Broader Public Sector Accountability Act, 2010 mandates open, fair and transparent procurement processes when purchasing goods and services with public funds.

If you have an innovative solution

If you have an innovative solution that addresses a particular business need, you may:

• approach one or more buyers to make them aware of your product.
• if appropriate, initiate a non-solicited proposal*
  

  *A non-solicited proposal may require the vendor to directly contact the organization or the organization’s Purchasing Department, if there is one. This may mean a phone call, proposal letter, or person-to-person meeting. Whichever method you choose, be clear about your objective and what the organization can expect from using your product or innovative solution. Be aware that buyers will make the final determination on how your product or innovative solution matches their requirements. The information you provide will help buyers develop a procurement strategy for the product or innovative solution that meets their business need, cost and product life cycle considerations.

• identify and mark any trade secrets or proprietary intellectual property in any presentation and promotional materials or proposals, and ask the buyer to sign a non-disclosure agreement. This will ensure confidentiality and protection of intellectual property. It is also advisable to indicate in your proposal which part is a trade secret and cannot be disclosed under the Ontario Freedom of Information and Protection of Privacy Act or the Municipal Freedom of Information and Privacy Act.

Be aware that buyers will make the final determination on how your product meets their expectations. The information you provide through the Request for Information process will help buyers develop a procurement strategy for the product or solution that best meets their business need, cost and product life cycle considerations.

List of health care and educational institutions

Here is a list of health care and educational institutions that may be in the market for a new product, stocking up inventory or improving current service standards.

MINISTRY OF EDUCATION

School Boards

MINISTRY OF TRAINING, COLLEGES AND UNIVERSITIES

Ontario Universities

Ontario Colleges

MINISTRY OF HEALTH AND LONG-TERM CARE

Hospitals (Classified by Local Health Integration Networks and Region)

Ontario Hospital Association

Community Care Access Corporation (Classified by Local Health Integration Networks)

Long-Term Care Home (Classified by Local Health Integration Networks)

The Ontario government provides opportunities for innovative companies to develop cutting-edge technologies that will strengthen Ontario's economic advantage and provide high-value jobs for the future.

This list of programs and initiatives may provide an opportunity to promote your product.

MINISTRY OF ECONOMIC DEVELOPMENT AND INNOVATION

The Health Technology Exchange – HTX.ca

Ontario Emerging Technologies Fund

Ontario Innovation Agenda

Innovation Demonstration Fund

Ontario Institute for Cancer Research

Get your market to know you

Make yourself known to potential buyers. Participate in trade shows and exhibits. Visit broader public sector websites or electronic tendering sites to find out what the market needs. Make personal contacts so you can introduce your company and your products.

Know your competition

What makes your product or service different? Get available information on past purchases of related products, quantities, buyers and successful vendors. For example, public tendering websites include a section on successful vendors. The Daily Commercial News, Ontario’s only daily construction newspaper, carries tenders and subtrades information for general and trade contractors, builders and developers.

Know the rules and requirements

Follow the rules in the competitive documents, from timelines to technology, as stated, to ensure your bid is compliant with what the buyer requires.

Understand the evaluation criteria which will be used by the buyer to decide which bid should be selected. In evaluating bids, the buyer may take into account not only the submitted price but also quality, quantity, transition costs, delivery, servicing, innovation, environmental considerations and other criteria directly related to the purchase.

Know your business

What are your capabilities? These can include your ability to comply with procurement requirements such as:

• financial capacity, especially if there are start-up costs
• expertise and experience
• track record
• meet deadlines.

PREPARING A PROPOSAL

In an open competitive process, broader public sector organizations develop competitive procurement documents, which can be a Request for Proposal or Request for Tender. As part of an open competitive process, buyers provide competitive documents that explain clearly the organization's requirements.

The main elements of a typical Request for Proposal or Request for Tender are included in this sample.

Sample Request for Proposal

Description of goods, services or construction required
The organization must include a description of the needed goods, services or construction required in generic or functional terms. For purchasing information technology, the organization may express its requirements specific to its corporate or organization IT standards.
Evaluation criteria
The evaluation criteria will be used by the organization to decide which bid to select. It would have been developed, reviewed and approved before the competitive process began. It spells out those criteria that are considered mandatory and any technical standards that have to be met. The evaluation criteria cannot be changed once the competitive process has begun.
Contact information
The name of the person to be contacted is included in the competitive document, together with the person's address and telephone number. All communication during the blackout period, which begins when procurement documents are issued and ends when the agreement is signed with the successful vendor, must be done only with the contact person or the bidder can be disqualified.
Conflict of interest
The organization must require any individual involved in the competitive process to declare all actual or potential conflict of interest. This applies to all employees, advisors, external consultants or suppliers. Evaluation team members must not engage in activities that may create or appear to create an unfair advantage towards any vendor.
Deadline
The date and time limit to submit bids, and the address where the bid is to be sent, are part of the competitive document. Bids received after the closing date and time must be returned unopened.
Questions on the competitive document
Questions about the competitive document are to be submitted no less than seven days before the closing date. Sometimes, questions are considered within 7 days of the closing date and, if necessary, the closing date is extended, taking into account the project schedule. The objective is to ensure that all bidders receive as much relevant information as possible.
Opening of bids
The buyer must indicate on the competitive document bid opening information, such as where the bids will be opened and who can attend.
Submission rules
The submission rules and other information such as bid format, language, executive summary if required, number of copies, attendance at a bidders' conference, and any additional rules must be followed in order to be considered a compliant bid.
Copy of the contract
The winning bidder receives a formal contract award letter once the competitive process is completed and a vendor is chosen. The formal contract is the agreement between the buyer and the successful vendor and must be signed by both parties before the provision of goods, services or construction.
Use of subcontractors
The organization may ask for a list of any subcontractors the supplier may use to complete the procurement.
When bids cannot be withdrawn
Bids cannot be withdrawn, typically 120 days from the closing date of the competitive process.
Ontario's trade agreements
The organization must comply with Ontario's trade agreements for goods, services and construction valued at $100,000 or more. Under the Agreement on Internal Trade, all Canadian suppliers must have access to procurement opportunities meeting this threshold through electronic tendering systems, advertisements in daily newspapers, or the use of source lists. Under the Ontario-Quebec Trade and Cooperation Agreement, Quebec suppliers must have access to procurement opportunities exceeding $100,000 through the use of electronic tendering systems.
Disclosing confidential information
Under the Freedom of Information and Protection of Privacy Act, the public has a right to access records within any public organization's custody, including any confidential information related to a purchase, unless exceptions to disclose apply to all or part of the request.

BID TO WIN

While the requirements may be straightforward, how you write your proposal and provide information will determine how successful you will be.

Read the document carefully

Understand the document. Ask questions of the contact person if there are things you don't understand. Do not make assumptions about the buyer or the requirements even if you have done business with the organization in the past.

Follow instructions

Provide information the document asks for in the format, language, order and number of copies specified. Fill in all mandatory requirements. Answer each point directly, providing sufficient technical, product or staffing information. Do not forget to sign the bid document to make it a legally binding offer.

Provide details where asked

When you get to the section about specific requirements, start with a short introduction that includes an overview of the present situation, why the proposed work is needed and the benefits to the organization. Describe what you plan to do and how the project will be completed, along with back-up plans should problems arise.

Include specific tasks, a schedule for delivery and installation (if required), principal staff needed to do the project, as well as hours or days of work. This is a good opportunity to introduce your team. Name each team member, list their education and work experience, and make sure their individual qualifications complement what the project needs. If you decide to hire a subcontractor or sub-consultant, include their information as well.

Do not include your price in this section.

Give an accurate quote

Provide a detailed breakdown of your price in the financial section. The document will specify what cost items will be included in the financial evaluation.

Review your bid

When you have finished, review the document to make sure you have covered all the sections, especially those that carry the most points during the evaluation and all mandatory requirements. Check if your bid is compliant with any regulatory and other applicable requirements.

You might also consider adding complementary information, such as:

• an executive summary and a table of contents with page numbers if your proposal is long
• awards your company may have won, or a breakdown of successful projects
• your company's logo or company name on each page.

HOW DO YOU KNOW IF YOUR BID WAS SUCCESSFUL?

If you are the winning bidder, you will receive a formal contract award letter at the end of the competitive process. The notice of the award will also be advertised and posted on the electronic tendering site. In accordance with the Freedom of Information and Privacy Act, the name of the successful vendor and the accepted bid price can also be provided upon request.

The buyer may also choose to write to the unsuccessful bidders to inform them of the decision and, for bids at $100,000 or greater, to let them know they are entitled to a debriefing.

Each bidder is entitled to an individual debriefing from the buyer. It typically covers the strengths and weaknesses of the bid and how to improve future bids. Vendors may address specific questions and issues as they see appropriate while, at the same time, being open to feedback from the buyer.

For the successful vendor, a dispute resolution process should be built into the contract to manage disputes throughout the life of the contract. For contracts with international suppliers, arbitration is held in Canada.

FICTION AND FACT

The broader public sector has complicated rules on purchasing.

The BPS Procurement Directive standardizes the approach and processes to doing business with the broader public sector, making them easier for suppliers, especially small and medium enterprises. The government recognizes the contribution of small and medium enterprises to the Ontario economy while protecting the public interest.

Small and medium enterprises cannot compete with large and multinational corporations.

The broader public sector does not discriminate when awarding contracts. There are many opportunities for companies of all sizes to participate in open competition for products, services and construction required by health care and educational institutions in Ontario.

Vendors may submit individual bids or come together as a group to submit a proposal. Conversely, a buyer may award multiple contracts for a single competition.

If I have a Vendor of Record arrangement or register with electronic portals^*, the contracts will come rolling in.

Having a Vendor of Record arrangement or registering with electronic portals is a step in the right direction but does not guarantee contracts. You still have to market your company aggressively to the organizations that buy your products and services. Know your market, and get them to know you.

*There are internet-based electronic portals that provide information on bid opportunities in Ontario.

The lowest bid always wins the contract.

While price is a factor, it is not the only factor when purchasing. The greatest value for money is increasingly a major consideration when assessing an innovative solution and long-term benefits of a product or service.

Buyers will make the final determination on how your product meets their expectations. The information you provide through the Request for Information process, for example, will help buyers develop a procurement strategy for the product or solution that best meets their business need, cost and product life cycle considerations.

DISCLAIMER

The Ministry of Finance has developed this guide to help small and medium enterprises seeking information about how to do business with the broader public sector in Ontario. This guide summarizes and deals with complex matters. It does not include all details, and does not take into account specific facts and circumstances. The guide also refers to or reflects laws and practices which are subject to change. For these reasons, the guide, as well as any links or information from other sources referred to, should not be relied upon, including as a substitute for specialized legal or professional advice in connection with any particular matter. Although the guide has been carefully prepared, the Ministry does not accept any responsibility for its contents or for any consequences, including direct or indirect liability, arising from its use.

For more information:

Email: BPSSupplyChain@ontario.ca

BPS Supply Chain Secretariat
Ministry of Finance
Treasury Board Offi ce
777 Bay St. 8th Floor
Toronto, ON
M5G 2C8

Doing Business with the Ontario Broader Public Sector
A guide for small and medium enterprises
Produced by the BPS Supply Chain Secretariat
Ministry of Finance

ISBN 978-1-4606-0633-9
Updated January 2013

Disponible en francais