New Westminster is increasing the value of sole source contracts that city staff can approve before getting council’s approval.
Staff recently presented council with a report on two proposed changes to the City of New Westminster’s procurement policy, which was last updated in November 2013. One of the changes is to increase the thresholds for sole sourcing.
Currently, the purchasing manager can approve sole source or single source purchases of up to $50,000 and the chief administrative officer or director of finance can approve sole source purchases of $50,000 to $150,000. Council approves sole source purchases of more than $150,000.
Staff proposed the following changes to the procurement policy’s authority levels for sole source purchases: purchasing manager – up to $75,000; chief administrative office/director of finance – over $75,000 and up to $300,000; chief administrative officer – over $300,000 up to $500,000; and city council – over $500,000.
Patrick Shannon, the city’s manager of purchasing, said the city endeavours not to have sole sourcing, but it does occur for a number of reasons.
“There's not one specific reason that requires sole sourcing, but they all have in common is that they are proceeding with the sole source because there's a cost or schedule benefit to do this,” he said. “When requesting to do as sole source, they are required to complete a form, which is then reviewed and approved by different people within the city.”
Shehzad Somji, the city’s director of finance, said the change in thresholds for sole source approvals would ensure teams can “mobilize quickly” if emergency work is required.
“There's not a large number of sole sources that we try to do, and we do try to minimize them all the time,” he said. “But unfortunately, there is work that needs to happen.”
Somji cited an example of work being done in New Westminster by Metro Vancouver that ties into city services. Instead of going out and finding its own vendor or contractor to do the work, he said the city could sole source that work to the contractor Metro Vancouver already has in place, as they would know exactly what work needs to be done.
“It’s just expedited and done quickly,” he said of the benefit.
Somji said about 20 sole source documents were completed and approved at the various threshold levels in 2023. “It’s just trying to expedite the process and make it a little bit more efficient.”
Shannon said the amounts recommended by staff reflect “the current state” rather than amounts approved when the policy was adopted in 2013.
“Back in 2013 a project that would have cost $75,000 is much higher than that today,” he said. “We also have supply chain disruptions and other events that are impacting costs.”
Shannon said a report about all contracts of $50,000 or more are included in quarterly financial updates to council.
Coun. Ruby Campbell asked how the proposed sole sourcing thresholds compare to other municipalities in the region.
Shannon said a couple have lower limits, but the majority of cities, including Port Coquitlam, having higher thresholds than those recommended in New Westminster. In some cities, he said the purchasing manager has the sole authority for approving sole source contacts, as long as certain criteria are met.
Council voted 4-2 in a support of a motion direction staff to proceed with the modified sole source approval amounts and increasing the amount to $500,000 before council approval. Mayor Patrick Johnstone and councillors Ruby Campbell, Tasha Henderson and Nadine Nakagawa supported the staff recommendation, which was opposed by councillors Daniel Fontaine and Paul Minhas.
Fontaine questioned why the amounts that can be approved by the chief financial officer and chief administrative officer went up by a larger amount than the purchasing manager.
Shannon said the recommended levels create discussion among staff and ensure that sole sourcing is the right decision.
“I feel confident up to $75,000. Once it exceeds $75,000, I would like to discuss that with someone else. So again, is to get more than one person making these decisions,” he said. “By the time it gets up to the CAO, we've done a very, very thorough review and have this justification to bring that forward.”
Fontaine said he could not support the increased thresholds for staff approval of sole source contracts. He expressed concern about the methodology used to produce the recommended amounts and questioned the need for allowing the chief administrative officer to approve $500,000 soul sourced contracts.
As part of the same report, council voted 6-0 in support of a recommendation directing staff to proceed with modifying the requirements to the public procurement process for construction projects over $200,000 to align with the New West Partnership Trade Agreement (NWPTA). The NWPTA is an accord between the governments of British Columbia, Alberta, Saskatchewan, and Manitoba that creates a barrier-free, interprovincial market.
