Supply Chain Management Procurement Standards
1 INTRODUCTION
Atlantic Lottery Corporation ("ALC") conducts all procurement functions in an open and competitive environment while maintaining fair and equitable opportunities for Suppliers to compete for ALC business, except where it is appropriate to use an Alternative Procurement Practice ("APP").
2 PURPOSE
The intent of the Supply Chain Management Procurement Standard ("Standard") is to ensure that:
- ALC’s procurement practices are conducted in a transparent, fair and consistent manner, except where it is appropriate to use an APP.
- Bidders have reasonable notice, and an opportunity to submit proposals in response to ALC’s procurement initiatives.
- ALC will abide by the Atlantic Procurement Agreement (“APA”) and, where applicable, the Agreement on Internal Trade (“AIT”).
- ALC is accountable to our Stakeholders and Shareholders in all procurement processes and decisions.
- Where APPs are undertaken, they shall be consistent with the exceptions outlined in Section 9.
3 SCOPE
This Standard applies to all employees at ALC, the Board of Directors and consultants retained to assist ALC.
4 RESPONSIBILITIES
The Relative Business Customers are responsible for developing the requirements and specifications of the goods or services.
Supply Chain Management personnel is responsible for:
- Providing professional procurement advice and services to Business Customers.
- Preparing the procurement documentation
- Monitoring compliance with this Standard.
- Notifying Business Customers, in advance if possible, of non-compliance; and
- Informing Business Customers whenever non-compliance with this Standard has occurred.
Supply Chain Management has the authority to reject the proposed procurement action of a Business Customer, if it is inconsistent with this Standard. Alternatively, Supply Chain Management may refer the matter to ALC's executive team for a decision whether deviation from this Standard will be permitted.
ALC's executive team has the authority to require that Directors not award contracts or submit recommendations to the Board of Directors for approval where such action is considered necessary and in the best interests of ALC. However, neither ALC's executive team nor the Board of Directors can make decisions that are inconsistent with the terms and conditions of a procurement process. 5 METHODS OF PROCUREMENT
5.1 Request for Information (RFI)
ALC will issue an RFI when there is uncertainty on availability of goods or services to satisfy a particular need. The RFI process will not typically result in a direct purchase but may lead to an RFP or an RFQ.
5.2 Request for Supplier Qualifications (RFSQ)
ALC will issue an RFSQ in order to gather information on supplier capabilities and qualifications, with the intention of creating a list of pre-qualified suppliers. This procurement method may; be used either to identify qualified candidates in advance of expected future competitions which will narrow the fields for an immediate need. An RFSQ should specifically define the type of materials or services included as part of the process. The RFSQ should also clearly indicate the time duration, the list of pre-qualified suppliers shall remain valid, the methods by which suppliers can be placed upon a list and at what specific intervals opportunities for being qualified will arise. The RFSQ should also indicate that suppliers who do not participate in the pre-qualification process or who do not appear on the list may be excluded from future opportunities for the listed goods or services.
An RFSQ can also be used to pre-qualify suppliers or those interested in supplying materials or services in the future - if, as and when requested. Qualified suppliers will be placed on a supplier roster and, the process to award contracts pursuant to this supply roster will be made in accordance with this Standard, including the threshold amounts indicated below. From time to time, ALC may conduct a further RFSQ in order to add additional suppliers to the supplier roster.
For greater clarity, ALC can issue an RFSQ for consulting services as required on a one by one basis.
5.3 Request for Proposal (RFP)
ALC will issue an RFP in situations where there is a general understanding of what is required and the supplier's expertise is needed to develop or perfect the desired end product or service based on information provided by ALC. The intent is to find the best solution or to explore available options. The RFP process helps to ensure that all possible suppliers have an equal opportunity to satisfy ALC requirements. The RFP will include evaluation criteria as predetermined by an evaluation committee, corporate sponsor and steering committee (where applicable).
5.4 Request for Quotation (RFQ)
ALC will issue an RFQ when the good or service required is well defines and is readily available. The primary deciding factor in an RFQ process is pricing, the requirement for additional evaluation criteria is not required.
5.5 Procurement Card
Procurement cards will be issued by Finance to approved individuals to acquire low value items that are within prescribed dollar value limits and merchant code restrictions.
5.6 Direct Orders
Direct Orders will be issued by Business Customers to Suppliers who do not accept VISA for the one-time procurement of goods or services under a limit of $5000. This will allow for faster processing of orders, quicker payments to our suppliers and less administrative work for ALC.
5.7 Purchase Orders
A Purchase Order is created and provided to the supplier to facilitate payment of invoices. The Purchase Order may exist as the contractual arrangement between ALC and the supplier or may be issued to support a tendering or quote process.
5.8 Threshold Amounts
Under Threshold
- Goods up to $10,000 – at least one quote required
- Services up to $50,000 – at least one quote required
- Construction up to $100,000 – at least one quote required.
Over Threshold
- Goods over $10,000 – must be procured through a tendering process, except where circumstances warrant the use of an APP*
- Services over $50,000 – must be procured through a tendering process, except where circumstances warrant the use of an APP*
- Construction over $100,000.00 - must be procured through a public tendering process, except where circumstances warrant the use of an APP*
* - A public tendering process may either be open tendering or invitational tendering in the event that a roster of pre-qualified suppliers exists. 5.9 Under Threshold Change Orders and Contract Amendments
Change Orders on existing purchase orders for amounts that are Under Threshold that result in purchase amounts Over Threshold must be approved by the Divisional Vice President. 5.10 Publicly Advertised Tenders
All publicly advertised tenders will be made available on ALC’s website and each Atlantic Province’s provincial website - under the category of tender opportunities and/or notices. All publicly advertised tenders must be advertised for a minimum of 15 calendar days.
5.11 Approvals
Approval of award-recommendation documents that result in purchase amounts Over Threshold must be evidenced by signature from the Business Owner of the originating department. In addition, required approvals for all Over Threshold amounts will be consistent with the ALC Signing Authority Approval Standard.
6 BID EVALUATION AND AWARD
6.1 Bid Evaluation
Bids must only be evaluated against criteria listed in the bid request document which may include for example price, quality, delivery, and service. The capacity of the bidder to meet the mandatory requirements and criteria stated in the bid request documents is a critical issue. The bid request documents must clearly identify the requirements of the procurement, the evaluation method, evaluation criteria and the weights assigned to each criterion. In addition, the evaluation method, evaluation criteria and the weights assigned to each criterion must be consistently followed throughout the process up to the award of the contract.
6.2 Award Information
All contract awards resulting from a public procurement process will be publicly posted on ALC’s website at www.alc.ca.
6.3 Public Bid Openings
Where Over Threshold competitive bids are obtained by ALC then all proposals shall be publicly opened. The time and place of all public openings shall be made available to all bidders. Members of the public may attend bid openings or may receive the information released during the public opening after the bid opening. Other than information released during the public opening, all bid submissions remain confidential and are subject to evaluation in private after opening and before award of contract.
7 SUPPLIER RELATIONS
7.1 Unsolicited Proposals
An unsolicited proposal is a written proposal submitted to ALC for the purpose of providing goods or services that are not in response to a competitive request. Only under certain circumstances will ALC accept and evaluate unsolicited proposals as a means of recognizing unique and innovative ideas such as major improvements to operations or significant enhancements to the Atlantic Canadian gaming marketplace.
Unsolicited proposals are not for the procurement of routine goods and services, cannot resemble an upcoming competitive procurement nor are they only conceptual in nature. In order to be considered, an unsolicited proposal must demonstrate that ALC will receive the best possible value, that the proposal is truly innovative and uniquely developed by the proponent, that the goods and services are not readily available from another source and that the proposal contains sufficient information to ascertain the value delivered which may justify ALC forgoing a competitive bid process.
The award of a contract in response to an unsolicited proposal is considered by ALC to be an APP and as such, is bound by the documentation and approval requirements defined in section 9 of this Standard.
7.2 Unsolicited Ideas
ALC will accept and encourages unsolicited ideas about new products, games, advertising or marketing concepts and improvements provided that it is made known to the Supplier that there is no commitment to enter into a procurement transaction from ALC. ALC may enter into a confidentiality agreement with the Supplier to receive further details. At all times, it should be made known to the supplier that based on the information received, that there is no commitment to enter into a procurement transaction with ALC and that ALC reserves the right to use the non-proprietary information received for a competitive bidding process.
7.3 Pre-Procurement Process Supplier Contact
ALC may invite potential suppliers to meet in order to discuss possible purchases being considered by ALC. The purpose of these meetings will be to determine whether the requirements of the purchase under consideration are commercially reasonable or whether they reflect current or future capabilities within the supplier community. Whenever appropriate, ALC may undertake these meetings as commercially confidential. In a commercially confidential meeting, the supplier must sign a declaration that it will not disclose, without ALC’s written consent, confidential information about a potential purchase under consideration by ALC. Failure to honour that declaration could result in ALC disqualifying the supplier from future contracts with ALC.
ALC may also circulate draft procurement documents, such as RFSQs, RFPs, RFQs, etc. to the supplier community for preliminary comments about the terms and conditions, technical specifications and scope of work contained within the documents.
7.4 Supplier Due Diligence & NSAGD requirements
In order to do business with ALC, suppliers may be subject to undergo a Supplier Due Diligence including applicable regulatory approval processes.
This process may include, but is not limited to, a risk assessment, a full due diligence process or meeting regulatory approvals requirements. There may be circumstances where a company's risk profile/characteristics or the nature of the goods and services supplied do not necessitate a full due diligence process investigation. Suppliers supplying gaming related goods and services will be subject to a full due diligence process and will be charged on a cost recovery basis. ALC reserves the right not to deal with a supplier where it believes in its sole discretion that the supplier and its key personnel may cause embarrassment to ALC or, cause ALC to conclude that the supplier and its key personnel are unwilling or unable to adhere to a high standard of corporate or ethical behavior.
Upon becoming an approved supplier it is the responsibility of the supplier to advise ALC of any changes that relate to the Supplier Due Diligence and/or regulatory approvals.
7.5 Supplier Management
ALC will utilize a supplier management program with certain suppliers who supply goods and services of a large and/or strategic value to monitor and evaluate supplier performance and manage relationships.
8 GENERAL
8.1 Conflict of Interest
ALC will not use outside business interests of employees in the purchase of goods or services.
Full disclosure is required from employees who participate in a procurement process concerning any outside interests that may put themselves into a conflicted situation, real or perceived. If there is determined to be a real or perceived conflict of interest, that employee will not participate in the procurement process.
All suppliers must provide a declaration with their bids stating that they are not in a real of perceived conflict of interest with ALC. Where a supplier believes that a real or perceived conflict of interest may exist, it is required to disclose the nature of the real or perceived conflict of interest in its bid. ALC, in its sole discretion, will determine whether a conflict does exist and, if it does exist, whether it warrants disqualification of the supplier.
8.2 Environmental Considerations
ALC is committed to the use of environmentally friendly or "green" products. In order to increase the development and awareness of environmentally friendly products, Supply Chain Management will review tender specifications and bid responses for goods and services to ensure that wherever possible these specifications are considered.
9 ALTERNATIVE PROCUREMENT PRACTICES
9.1 Definition and Application
Alternative Procurement Practices (“APP”) are procurement transactions Over Threshold that are conducted outside of the traditional competitive bidding method of procurement. APPs must not be used to avoid competition. Nor can they be used as a means to replace the need to properly plan for a competitive procurement nor can they be used to discriminate against a supplier.
APPs may only be used in circumstances such as those described below:
Where an unforeseeable situation of urgency exists and the goods, services or construction cannot be obtained in time by means of open procurement procedures;
Where goods or consulting services regarding matters of a confidential or privileged nature are to be purchased and the disclosure of those matters through an open tendering process could reasonably be expected to compromise government confidentiality, cause economic disruption or otherwise be contrary to the public interest;
Where a contract is to be awarded under a cooperation agreement that is financed, in whole or in part, by an international cooperation organization, only to the extent that the agreement between ALC and the organization includes rules for awarding contracts that differ from the obligations set out in this Standard;
Where construction materials are to be purchased and it can be demonstrated that transportation costs or technical considerations impose geographic limits on the available supply base, specifically in the case of sand, stone, gravel, asphalt compound and pre-mixed concrete for use in the construction or repair of roads;
Where compliance with the open tendering provisions would interfere with ALC’s ability to maintain security or order or to protect human, animal or plant life or health;
In the absence of a receipt of any bids in response to a call for tenders made in accordance with the procedures set out in this Standard;
To ensure compatibility with existing products, to recognize exclusive rights, such as exclusive licenses, copyright and patent rights, or to maintain specialized products that must be maintained by the manufacturer or its representative;
Where there is an absence of competition for technical reasons and the goods or services can be supplied only by a particular supplier and no alternative or substitute exists;
For the procurement of goods or services the supply of which is controlled by a supplier that is a statutory monopoly;
For the purchase of goods on a commodity market;
For work to be performed on or about a leased building or portions thereof that may be performed only by the lessor;
For work to be performed on property by a contractor according to provisions of a warranty or guarantee held in respect of the property or the original work;
For a contract to be awarded to the winner of a design contest;
For the procurement of a prototype or a first good or service to be developed in the course of and for a particular contract for research, experiment, study or original development, but not for any subsequent purchases;
For the purchase of goods under exceptionally advantageous circumstances such as bankruptcy or receivership, but not for routine purchases;
For the procurement of original works of art;
For the procurement of subscriptions to newspapers, magazines or other periodicals;
For the procurement of real property;
Procurement of goods intended for resale to the public;
Procurement of goods, services or construction:
Purchased on behalf of an entity not covered by this Standard; or
Purchased by entities which operate sporting or convention facilities in order to comply with a commercial agreement with an entity not covered by this Standard that contains provisions incompatible with this Standard;
For the procurement from philanthropic institutions, prison labour or persons with disabilities;
For the procurement contracts with a public body or a non-profit organization;
For the procurement of:
Goods purchased for representational or promotional purposes;
Services or construction purchased for representational or promotional purposes outside Canada;
For the procurement of any goods the interprovincial movement of which is restricted by laws not inconsistent with this Agreement;
For unsolicited proposals;
For contracts for professional services such as: physicians, dentists, nurses, pharmacists, veterinarians, engineers, architects, land surveyors, accountants, lawyers and notaries; and
Exemptions from Article 508 of the AIT, as and when applicable.
9.2 Approvals
Approval on all APP transactions up to $1 million must be given in writing by the Vice President of the originating department, Manager of Corporate Services, Legal Counsel, the Vice President, Finance and Risk Management and the President and CEO. All approvals must be consistent with the guidelines established in the ALC Signing Authority Approval Standard. In addition to the above approvals, if the value of the contract exceeds $1 million, approval from the Board of Directors is necessary.
9.3 Documentation
In order to support the approval process, documentation accompanying all applications for approval must include a description of which of the above circumstances apply to the transaction, the selection criteria used to evaluate potential suppliers including validation that consistent metrics were used for evaluation throughout the process, all market research and evaluation of potential alternate suppliers considered in the process and a recommendation including supporting rationale for the decision.
All approvals and supporting documentation will be retained by Supply Chain Management in accordance with the Contract Documentation and Retention Standard, and will be retained for the life of the contract or seven years, whichever is greater. 9.4 Reporting
A quarterly report of all APP transactions will be submitted to the Board of Directors.
10 DOCUMENTATION AND RETENTION
ALC must retain the procurement documents, as well as any other pertinent information related to the purchase of goods or services for reporting and auditing purposes. These documents may also be used as support in the event of a bid protest or dispute in respect of the competitive process.
11 CONFIDENTIALITY
All information, such as bid information, will be treated in a secure and confidential manner. However, bidders should be notified that ALC may be required to disclose information provided by a bidder in accordance with Access to Information Legislation in all four Atlantic Provinces or in accordance with an Order from a Court of competent jurisdiction.
12 REVIEW AND AUTHORITY
This standard will be reviewed it its entirety on an annual basis. The review will involve Procurement, Internal Audit and Legal. Changes to the standard will require ALC Executive Team and Board of Directors approval.
13 INQUIRIES
For further information, please contact Supply Chain Management at Atlantic Lottery.
14 COMPLIANCE WITH THIS STANDARD
Compliance with this standard is mandatory for all ALC employees, the Board of Directors and any consultants retained to assist ALC. All procurement activities will be subject to audit for compliance by the Internal Audit Department.
15 BUYING GROUPS
ALC may join with other purchasers in the provinces covered under the APA to acquire goods or services in order to achieve maximum efficiencies and economies of scales. However, ALC should ensure that the selection of suppliers is conducted following an open and competitive procurement process, except where it is appropriate to use an APP. ALC may also participate as a member of a Buying Group with other commissions, agencies or corporations whose mandate is similar to ALC’s, whether or not the other members of the Buying Group are located in the provinces covered by the APA. ALC should ensure that the Buying Group has selected suppliers following an open and competitive procurement process, except where it is appropriate to use an APP.