Caroline Wawzonek: Update on the Procurement Review

Check against delivery

Mr. Speaker, later this afternoon, I will table the Report of the Procurement Review Panel, which provides a review of the GNWT’s procurement policies and practices, as well as recommendations on how these can be improved.

Government procurement, especially in the Northwest Territories, is far reaching, and the steps that we take to respond to the panel’s recommendations will support the GNWT’s mandate commitments to:

• Adopt a benefit retention approach to economic development;
• Increase employment in small communities; and,
• Increase economic diversification by supporting growth in non-extractive sectors like manufacturing.

Mr. Speaker, to develop the report, this panel was asked to meet with Indigenous governments, industry, and business communities, as well as NWT residents, to discuss GNWT policies and practices around public procurement and then identify ways in which they can be improved.

They have done that, and they have done it well.  In the interest of openness and accountability, their findings and conclusions were shared publicly on
September 29, 2021.

The panel has provided 50 recommendations for us to consider, highlighting that our government’s procurement processes need to be simpler, more transparent, and easier to navigate for the parties that are accessing them.

The panel’s report shows that our government’s procurement policies and related activities are spread across too many administrative departments and that the responsibility for up to seven key performance functions is unnecessarily confusing to those that these policies are intended to serve. 

In many cases the panel’s recommendations align with work that is already underway to improve our internal procurement processes such as:

• The development of a ‘one stop shop’ website that combines all procurement related information into one spot for contractors;
• The improvement of contract monitoring through the implementation of the first phase of vendor performance management with more work on this initiative in progress. Vendor performance management helps us first monitor and, if necessary, enforce compliance with procurement provisions in contracts; and,
• The GNWT’s regular review of procedures and processes.

Many of the recommendations in the panel’s report will trigger consultation requirements set out in the land claims with our treaty partners and will likely impact or intersect with our commitment to develop an Indigenous Procurement Policy.  Our officials will continue to meet with Indigenous governments to discuss the panel’s report, receive their input and map out next steps.

The panel’s report also includes recommendations to improve information sharing and help suppliers navigate the procurement system and resolve disputes. It recommends streamlining existing rules and oversight to reduce complexity and confusion for suppliers and contracting authorities. These are areas that we can get to work on sooner rather than later.

Mr. Speaker, there is much at stake in this review.

In the words of the panel, “procurement can have significant impacts on individual businesses and sectors of the economy. In some industries within our territory, the GNWT is the largest purchaser of goods and services and, as the panel heard through its engagements, the influence of the GNWT’s procurement practices can be enormous in influencing the success or failure of any given businesses.”

The panel suggests that its findings and recommendations provide the GNWT with an historic opportunity to use its buying power strategically and to leverage its public procurement in support of economic and social objectives.

I agree.  The report identified that a significant proportion of GNWT’s contracts are awarded to NWT-based business. Approximately 75% of all contracts over the last nine years have been awarded to NWT businesses with a value of $2.2 billion.

In our most recent contract report for 2020-2021, the GNWT entered $338 million worth of contracts and change orders. 70% of these were awarded to Northern companies. A share of the remaining contracts received no bids from Northern companies, and a portion required goods and services that are not available in the NWT. This shows that our policies are working, but I believe there is more we can do.

The panel’s report, Mr. Speaker, highlights the potential that exists within our own resources and the economic stimulus that can come from within.

In order to restore and grow the NWT economy, it is essential we limit the migration of dollars out of the territory. While we may never be able to completely eliminate our dependency on outside workers or suppliers, this government is dedicated to working to close any potential loopholes in the system, maximize benefits to Northern companies, and ensure as much of our money as possible stays in the territory.

It will take some heavy lifting and strong decision-making, but these are the types of impacts that must be our goal. 

Thank you, Mr. Speaker.