The Northwest Territories government has reduced the spending threshold for goods and services that triggers a formal tender process from $25,000 to $10,000.
The territory announced the change, which it said would be temporary, in a news release on Tuesday. The new $10,000 threshold takes effect on April 1 and will last until at least July 31, 2021. What happens beyond that point has not been decided.
Lowering the threshold is a response to feedback from the NWT’s business community and will allow more northern businesses to bid on government contracts, the territory said.
The change comes after the territory recently embarked on what is billed as a comprehensive review of how GNWT procurement works, a review that remains ongoing.
Caroline Wawzonek, the territory’s finance minister, said the new threshold “is being enacted to ensure that more northern businesses feel they have a fair and equal opportunity to compete for GNWT contracts.”
The practical consequence of the change is that all territorial government purchases above $10,000 will now go through a formal public procurement process like a request for proposal or a tender.
For government purchases of goods and services under $10,000, local businesses registered under the territory’s business incentive policy will be given first priority. Second priority will be given to registered territorial businesses, followed by unregistered local and territorial businesses, and finally businesses based outside the NWT.
The broader review of procurement in the NWT follows criticism from Indigenous governments and businesses, who argue the current process does not sufficiently cater to northern industry and workers.
The review is being led by an independent three-person panel and is expected to take four months to complete.
The NWT government said the temporary change to the threshold will be evaluated and assessed as part of that review.
The procurement process and limits for professional, architectural, and engineering services have not been changed.