Gwich’in firm questions GNWT’s procurement approach

Gwich’in leaders and a Fort McPherson business say the GNWT is “overlooking” treaty agreements and Indigenous-run companies when awarding contracts on settlement land.

In May, the NWT’s Department of Infrastructure posted a tender seeking a contractor to acquire gravel from a quarry and stockpile it at two locations along the Dempster Highway.

Two companies placed bids on the contract – LJ’s Contracting and Ramida Enterprises.

LJ’s Contracting, a registered Gwich’in company, has been operating in the Fort McPherson area since 1992. The company said the work would cost $1.5 million, adjusted to $1.3 million through the NWT government’s business incentive policy, which is designed to make the selection of local firms more attractive to the GNWT.

Ramida Enterprises, an excavation company with 30 years of experience based in Sooke, BC, placed a bid of $860,000.

Ramida was awarded the tender.

Rebecca Blake of LJ’s Contracting said the decision arrived with no further explanation.

She said LJ’s Contracting would have preferred the GNWT negotiate a lower bid with the company rather than take a cheaper option with a southern firm.

“We’re in a time of reconciliation and I think that, as a territorial government trying to bridge those gaps between their own Aboriginal organizations and their people, they should be dealing with leadership on a lot of the work that’s been within our region,” she said.

“Putting it out on public tender is just, it makes no sense. It has no common courtesy.”

A contract agreed directly through an Indigenous government rather than issued via public tender is normally known as a negotiated contract.

Nihtat Gwich’in President Kelly McLeod has been pushing for more negotiated contracts to be awarded to Gwich’in companies.

“The Gwich’in accounts for less than 10 percent of the procurement that the GNWT team put forward in our settlement land,” McLeod told Cabin Radio.

In the past, McLeod said, the GNWT would show Gwich’in businesses its capital plans before putting anything out to the open market, allowing local businesses to hire, train and prepare for contracts on settlement land. He said that system has since changed, adding that a recent two-year negotiation between the Gwich’in Tribal Council and GNWT – for a process to give Gwich’in businesses preference regarding contracts on their land – ended without an agreement.

“We’re not trying to take the whole pie, but we want to ensure that our people have their fair share of it,” said McLeod.

“The GNWT has flat-out come back and said no, they will not sign off an agreement that gives us preference. Which is wrong, because they have those commitments and obligations today.”

‘Duty to manage spending’

Vince McKay is the NWT’s infrastructure minister.

Speaking with Cabin Radio in May, McKay said negotiated contracts would be used “to keep the benefits in a region … when the capacity is not there,” but not in other circumstances where the open market can sustain bidding.

Referring to a separate contract process involving two northern firms – to which McLeod had also objected – McKay said: “They put it out through a public process [and] that allows businesses in the area to bid on it in an open, transparent process, and an opportunity for local businesses to have that opportunity to bid on it and and get those jobs.”

“If it’s a fair-sized contract where it might attract a business from down south, it’s something we may want to negotiate in order to keep that money in the North and keep the employment in the North,” he said.

“Where it’s something not as exciting of a contract, if you will – I mean, there’s an opportunity for bidding amongst the qualified businesses within the area – should we be going directly for negotiated contracts with Indigenous governments? I would say no. I mean, there’s an opportunity for us to utilize our public dollars in a positive way, and that’s to employ people in the area, which I think most times is done for this.”

The GNWT’s procurement guidelines list six principles.

In short, they are to:

• honour treaty commitments;
• balance openness and value for money with treaty obligations and trade agreements;
• enhance opportunities for Indigenous businesses with “equitable access” to procurement;
• build employment and capacity in the NWT;
• make it easier to do business with the GNWT; and
• “balance risks appropriately.”

In a Thursday statement about the quarry contract, the Department of Infrastructure said the territory had a “legal obligation to treat each bidder fairly and to award the contract to the lowest responsive and responsible bidder after application of the BIP.”

The department sought to highlight the distinction between a request for proposals – which it characterized as asking businesses to provide both a solution and a price for that solution – and a tender, where the department said the solution is already determined and the GNWT just needs a price.

The department did not specify whether Ramida had made any local hiring commitment in winning the tender, and noted that BIP does not necessarily require such a commitment to be made.

“While GNWT procurements are subject to the Business Incentive Policy, the GNWT must also balance the interest of supporting businesses in the territory with the duty to manage spending and deliver value for residents of the NWT,” the department continued.

“The prices paid for contracted goods and services directly impacts budgets and the level of services that can be provided for communities and residents.”

The department also noted work is under way to develop an Indigenous procurement policy “that will enhance opportunities for NWT Indigenous businesses in the GNWT procurement process.”

‘Who is everybody?’

Ramida Enterprises, the BC-based firm that won the bid, said it will look to hire locally – and is contemplating more of a presence in the North.

Project manager Scott Milne told Cabin Radio the company has been working in the Northwest Territories for around a decade, mostly hauling fuel in the winter months.

Milne said he could not disclose how the firm came up with its $860,000 bid for the gravel tender.

“We have looked at projects for a number of years, probably three plus years, but we’ve been just very busy and it just hasn’t really worked out. This year, we just had a little bit less on our plate. We were available to go up there. We’ve been toying with the idea of setting up shop up there anyway,” said Milne.

Milne said the company plans to bring up its own equipment to Fort McPherson, and mobilization and demobilization of that equipment will cost an estimated 10 percent of its budget.

Along with equipment, Milne said Ramida will bring “key guys” from BC to complete the work but is looking to hire locals for the job, too.

“It’ll depend on who is available,” said Milne, who did not provide an estimated ratio of local employees to travelling workers.

Blake questioned the way the GNWT’s business incentive policy works in situations like this.

To qualify for BIP-adjusted prices on bids, she said, LJ’s Contracting must list local employment, buy road signs from local suppliers, list grocery suppliers and more.

“Yet they, as a government, can take our tax dollars and go to the southernmost part of the country and get a company to come up and crush their material, give them that million dollars and tell them, OK, go home,” said Blake.

“We often get told it’s got to go out for public procurement, everybody’s got to get a fair opportunity. Well, we continue to ask, who is everybody?” said McLeod.

“Because through our land claim, which is a Gwich’in comprehensive land claim, there’s commitments in there from the territorial and federal government that aren’t being met.”