PGRP Tendering

Res #: 34-03A
Number: 34
Year: 2003
Midterm: No
Expired: Yes
Responses Received: No
Departments: Prairie Farm Rehabilitation Administration

Resolution No. 34-03A

WHEREAS, the Prairie Grain Roads Program (PGRP) provides two-thirds assistance only to the extent of the lowest bid; and

WHEREAS, a few contractors are very inept and have great difficulty in following engineering directives and plans, constructing a road to standard specifications and in finding a balance to running their financial affairs; and

WHEREAS, such a contract results in very high hidden costs and inefficiencies that are very difficult to quantify and impose tremendous complications to matters as simple as paying the contractor; and

WHEREAS, such a contractor may leave a trail of unpaid bills and substandard construction work even when the municipality conducts itself accordingly to the legislation related to the situation; and

WHEREAS, by virtue of history council knows, at the time of contract award, that difficulties most probably lie ahead in relation to the bidder; and

WHEREAS, such a contractor is not saving any money for the taxpayer at large, but rather costing more despite the lower bid; and

WHEREAS, such a contractor may obtain a Bid Bond and Performance Bond from a relatively unknown insurance company further complicating the matter and influencing the PGRP;

THEREFORE BE IT RESOLVED, that the PGRP program implement a policy that provides for flexibility to permit a Council to select a higher bidder when justified, no matter how much discrepancy in tender, and paying the two-thirds assistance on the full amount.

Response from the Honourable Lyle Vanclief, Minister Responsible for the PFRA:

As municipalities are aware, the PGRP may provide funding of up to two-thirds of the total eligible cost of approved municipal road construction costs. This funding is provided by the Government of Canada, through the Prairie Farm Rehabilitation Administration (PFRA), Agriculture and Agri-Food Canada. A requirement of the PGRP funding is that all approved projects must be awarded following a public tendering process. While the Government of Canada is not the contracting authority for these works and has no involvement in the tendering or contract award process, there is still a significant financial contribution from the Government. That being the case, we must adhere to the intent of the Treasury Board of Canada's Contracting Policy.

This policy directs that contracting must stand the test of public scrutiny in matters of prudence and probity, facilitate access, encourage competition and reflect fairness in the spending of public funds. I note that the PGRP Tendering Policy provides some flexibility in allowing the contracting authority to award construction projects to someone other than the lowest bidder but bases the maximum contribution from the PGRP on the amount of the lowest valid tender. This policy allows some flexibility to the contracting authority yet ensures that PGRP funds are expended in accordance with Treasury Board requirements.

This PGRP policy also protects the Government of Canada from involvement in potential legal action, and significant additional costs, in the event that a law suit is brought against a contracting authority for not accepting the lowest valid tender. I have asked officials in the PFRA, if requested by municipalities with approved PGRP projects, to assist in reviewing tender packages prior to advertising and to make recommendations on wording that may attract contractors more suitable to performing the work of the contract.

As I indicated in my speech to your March convention, I appreciate the interest and involvement of your association in the many agricultural issues facing Saskatchewan producers in this era of unprecedented change, challenge and opportunity. In addition, I also wish to thank the Saskatchewan Association of Rural Municipalities for its valuable contribution and continued involvement with the program as members of the PGRP Agreement Management Committee in Saskatchewan.