February Procurement Overview

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Hester Grant
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1 February 2017 Procurement Overview

2 The Strategic Procurement objective TCHC Strategic Procurement team is committed to open, fair and transparent procurement practices to achieve best value for money in the stewardship of public funds. Governed by the Procurement Policy and procedures set out by the City of Toronto and aligned to Ontario Broader Public Sector Procurement Directives. Strategic Procurement ensures TCHC vendor awards and contracts are defensible and meet audit standards. 2

3 The Procurement team manages the following processes Vendor selection: Industry standard sourcing methodology Vendor award approvals: Governed by the designated signing authority limits Contract Signing: By management, as approved by the board PO authorization and issuance: With segregation of duty from the business unit requestor New vendors: Set-up or inactivation 3

4 TCHC engages vendors to participate in our opportunities through the following: Request for Proposal (RFP) Used for more complex deliverables where bidder ranking is assessed based on high score and where bidder responses may help inform the development of final specifications or performance terms. This format allows negotiation of the contract with the selected bidder. Request for Quotation (RFQ) Used to procure simple goods and services where bidder ranking is typically assessed based on lowest price. Request for Vendor Qualification (RFVQ) Used to prequalify vendors in the first stage of a two-stage open competition. Proponents who meet the requirements of the RFVQ become roster members and are eligible and invited to respond to a subsequent solicitation. 4

5 The anticipated cost or budget amount determines the Sourcing rules of engagement. Up to $10,000 $10,000 - $74,999 $75,000 - $99,999 $100,000 - $749,999 $750,000 + Roster exists One written quote from a prequalified vendor Informal invitation * 3 quotes (min) by rotation. Formal invitation to all members of the roster. Formal invitation to all members of the roster. Public RFP No roster exists One written quote from a qualified vendor Informal invitation * 3 quotes (min) from qualified vendors Formal Invitation * 3 quotes (min) from qualified vendors Public RFP Public RFP 5

6 Procurement thresholds details These thresholds represent the minimum requirement and are exclusive of taxes Business units may reduce the thresholds based on individual business needs Thresholds may NOT be increased Project budgets may not be split to lower threshold approvals Direct award (sole source) greater than $9,999 requires appropriate justification and approval Limited competition of any value where the requirement is a Public RFP requires justification and approval 6

7 Electronic platforms for posting RFx documents RFP documents are posted on our Toronto Community Housing website, BravoSolution Ontario Tenders Portal and on Biddingo. By TCHC posting on the above platforms, the audit requirement of being open, fair, and transparent is met. Only documents found on the above platforms are to be considered the official documents. The onus is on the vendor to check any of the above-mentioned platforms to verify they have received all relevant information. 7

Vendor award approval process Informals (spends under

confirms details PO created and sent to vendor Formals

Orders > $250K Vendor Award Committee Chair Sr Dir.

8 Vendor award approval process Informals (spends under $75,000) Purchase request raised by BU Purchasing team confirms details PO created and sent to vendor Formals (spends >$75K) Evaluation Committee Direct Awards Change Orders > $250K Vendor Award Committee Chair Sr Dir. Procurement Rep. from Finance Rep. from Legal CEO/BAS/ BIFAC/ Board as per DSA 8

9 Vendor Award Committee (VAC) VAC responsibilities: Review reports to ensure procurement policy and procedures have been followed Reviews and identifies risks for TCHC Endorses the recommendation for contract award from the Evaluation committee Forwards the report for additional approvals based on award value (CEO, BAS, BIFAC, Board) VAC meets every Friday; reports are to be submitted by noon on Tuesdays. 9

10 Exceptions: although the majority of spend is awarded through competitive bidding, our policy provides for alternatives to best respond to business needs Direct awards P-card Employee expenses Post-purchase approval process These spends follow specific approval processes and are reported to board. 10

11 Direct Award (Sole Source) 1. A direct award is a contract for the purchase of goods or services over $9,999 that has not gone through a competitive process Top justifications used are: To ensure compatibility with goods/services previously acquired Absence of competition Work performed under warranty or guarantee 2. Acceptable justifications for a direct award are approved by the ELT, set out in the Procurement Procedures and documented in the VAC report. 3. The Business Unit prepares the direct award report for the VAC with award recommendation. 11

12 Conflicts of interest 1. TCHC s Conflict of Interest Policy pertains to any potential, implied or real conflict. 2. Conflict of Interest Declaration Forms must be signed: When participating on an evaluation team. After a contract is awarded, by anyone directly involved in managing the contract, including frontline staff receiving the services. If or when a conflict arises on an existing contract. 3. Managers/supervisors must review any completed Conflict of Interest Declaration Forms and escalate as appropriate. 4. Undeclared conflicts of interest may result in the cancellation of the project. 12

13 2016 procurement highlights 447 RFx s issued in ,586 vendor bids were submitted 490 VACs processed and approved Established a roster rotation for Informal market calls Introduced CCDC Construction Contracts for Stipulated Sum general contractor relationships 13

14 2016 notable enhancements to better serve tenants Introduction of Bid Award Sub-Committee (BAS) resulting in weekly vendor approvals up to $5M Introduction of Sourcing Managers to collaborate with business units regarding sourcing strategies, scope development and establishing scoring criteria Establish internal Service Level Agreements (SLAs) to assist with more accurate capital planning: 35 days average to complete an RFQ 65 days average to complete an RFP 7 days to execute an agreement post award approval Creation of new external webpage (under the Doing business section) allowing potential vendors to identify area(s) of expertise (87 new vendors registered) 14

15 2017 roadmap Continue transformational efforts to build and align team to meet organizational needs Welcome IT-Procurement into centralized team Introduce proactive roster management Facilitate the Integrated Housing Management System (IHMS) strategic initiative Build the Vendor Management Program and transition procurement from sourcing to category management Build additional score cards to capture vendor performance beyond construction 15

16 Sylvia Kobal Sr. Director, Procurement Thank you

Effective Date: January, 2007 Last Reviewed Date: September, 2016 Last Revised Date: October, 2016 Next Review Date: April 2018

Effective Date: January, 2007 Last Reviewed Date: September, 2016 Last Revised Date: October, 2016 Next Review Date: April 2018 Section: Finance and Administration Number: 12.20.PP.v7 Subject: Goods and Services Procurement (including consulting services) Policy and Procedure Associated Document Form Number: 12.20.F Effective Date: