Sole-Source Contracting in Canada

Who knew it was wrong
to award a billion-dollar no-bid public contract
to the organization that hired your mom?
Andrew Coyne, Globe and Mail (paywalled)

The current hoo-haa in Canada over a (now withdrawn) sole-source contract awarded to WE charity has hit even American papers.  And BBC News.

Andrew Coyne (quoted above) is one of Canada’s least-partisan journalists, IMHO. I would just point out that there are two values for the contract:

  • $19.5 million for the management fee (the actual contract awarded to WE, although it now seems this might have been the minimum, with $43 million the maximum possible)
  • $912 million for the grants to be administered (a flow-through value)

If I were using this contract in an experience section, I would state both values really (really) clearly and I wouldn’t round-up the “funds administered” value to $1 billion.

This is not a restraint-in-headline-writing or an ethics-in-governance blog, so I’m just offering two links to the official rules governing sole-source contracting in Canada, for those who want to know.

The Rules

Supply Manual, article 3.15 Non-competitive contracting process

Note this clause:

However, contracts may be entered into without soliciting bids when:

  1. The need is one of pressing emergency in which delay would be injurious to the public interest (GCRs 6.(a));
    Note: A pressing emergency may be an actual or imminent life-threatening situation, a disaster which endangers the quality of life or has resulted in the loss of life, or one that may result in significant loss or damage to Crown property.

And this clause:

The exception should only be invoked where patents, copyright requirements, or technical compatibility factors and technological expertise suggest that only one contractor exists.

The Best Practices

And here’s an excellent post on best practices in issuing sole-source contracts in the federal government.

Canadian Government Executive: Considering a sole-source contract?

One Other Thing

While the opposition refers to a “sole-source contract”, this was a contribution agreement, governed by the rules on transfer payments, not a procurement that required a tendering process. There was nothing inherently wrong in striking a deal with WE without calling for bids.
John Ivison, National Post

I’d never heard of contribution agreements, maybe because no company I worked for was ever trying to get one. Live and learn, I guess, although it will take someone with more patience or time on their hands to sort through the Treasury Board Directive on Transfer Payments or their 131-page document with guidelines governing transfer payments.

And we learn again, if we needed to, that even if you read it in the papers it ain’t necessarily so. Maybe especially when it comes to contracting.