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Economy

GNWT launches long-awaited procurement review


Following criticism from Indigenous governments and businesses, the NWT government on Wednesday formally launched a review of the way it handles procurement.

The review had been promised since Caroline Cochrane’s government issued its initial four-year list of priorities, but has now been moved up from 2022 to 2021.

In September last year, promising to treat the matter with urgency, finance minister Caroline Wawzonek said procurement was a “really big deal” where the territory needed “to be doing better and differently.”

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The review will be led by an independent three-person panel and will take four months to complete.

Much of that time will be spent hearing from Indigenous governments and businesses. There are also four public engagement sessions scheduled between February and April.

A 34-page discussion paper published on Wednesday highlights some of the areas to be reviewed.

The business incentive policy, or BIP – which hands preferential treatment to northern businesses based on certain criteria – will be studied, as will whether the NWT should follow the Yukon in developing a procurement policy specific to Indigenous businesses and governments.

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“We are paying attention to what’s coming out of Yukon and understanding that process,” said Leslie Anderson, one of the three panel members, who has previously managed procurement for both the Yukon and British Columbia.

“We’re not prejudging anything that’s going to be an outcome,” she said.

Anderson will sit on the panel alongside longtime NWT public servant Peter Vician and Darrell Beaulieu, the president and chief executive of Denendeh Investments.

Minister Wawzonek echoed Anderson’s sentiment throughout a news conference on Wednesday morning, stating she would wait to see what NWT residents and businesses recommended.

“I’m going to refrain from making any assumptions or guesses about where this might need,” Wawzonek said.

“I very much want to hear from Indigenous governments and Indigenous businesses about what they want, what they think would be effective, and how they see this working.”

Formal recommendations on changes to procurement are due to be delivered to the NWT government in the summer.

Contract concern

In 2020, both the Tłı̨chǫ Government and Yellowknives Dene First Nation publicly expressed frustration with the NWT’s procurement system.

The Tłı̨chǫ Government accused the territory of showing “complete disrespect” by publicly tendering work on the Rae access road without offering a direct negotiated contract with the Tłı̨chǫ.

The NWT government subsequently appeared to climb down by promising to directly negotiate future infrastructure contracts in the region with Tłı̨chǫ businesses.

At the same time, the Yellowknives Dene First Nation briefly withdrew support for the proposed Slave Geological Province highway after one of its businesses, Det’on Cho Environmental, was overlooked for related contracts.

By October, the two governments said they had resolved their differences.

On Wednesday, Wawzonek told reporters the territory “can’t afford” to keep having such disputes and urgency was required in finding a solution.

She said she believed four months to be enough time to adequately consult while ensuring momentum was maintained.

“This was originally slated for 2022 as a completion date. Looking at the economy and with the onset of Covid-19, it became apparent that we wanted to try to accelerate that,” Wawzonek said.

“We have pushed an aggressive timeline but talked along the way about not wanting to do something quickly and then lose the quality of the outcome we’re producing. I think we’ve struck a balance.”

P3s will be scrutinized

The main issue raised by the Tłı̨chǫ Government last year – direct negotiated contracts, a way of awarding contracts to one party without going through a competitive process – will be among the topics reviewed.

The Tłı̨chǫ Government said in July that awarding contracts to “outsiders” was “denying our people, who have been hurt by the pandemic, the best opportunity to rebuild their economic lives.”

Wawzonek said on Wednesday she was “alive to the fact there are a lot of concerns” regarding direct negotiated contracts, and that her government would “try to make sure we’re doing that in a way that is supportive of NWT businesses, broadly speaking.”

The issue of public-private partnerships – or P3s – will also be examined.

P3s are considered for projects costing more than $50 million and have been deployed for major infrastructure work like the new Stanton Territorial Hospital. Their use has in the past led to questions over who ultimately carries responsibility for the finished product and how costs are managed.

“There are some questions here around how and to what extent we want to continue to use P3s,” Wawzonek acknowledged, saying the review would look at Indigenous participation in P3s and how the process might be improved.

The extent to which the territory is able to actually change its procurement policy may be constrained by broader free trade agreements.

For example, the NWT has a legal obligation to give national Canadian businesses a level playing field when competing for its contracts.

The territory has already negotiated an exception to that rule – in the form of the business incentive policy, which allows the NWT to favour Indigenous or regional economic development – but any sweeping changes to procurement may require an application for new exceptions.

“We certainly are constrained by what’s in the free trade agreements,” said Wawzonek, “but I don’t think it should be a constraint on the conversation.

“The conversation should be about what is working and not working.

“The solutions might ultimately be constrained but exceptions are in existence There’s a lot of latitude.”

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