Public Works is seeking bids to replace an expiring professional services supply arrangement for positions ranging from system administrators to business analysts.
The contract will bundle IT services that used to be done by three companies; currently, Modis Canada Inc., S.i. Systems Ltd. and Veritaaq Technology House Inc. provide these services for about $66.6 million combined.
What worries local providers is the size of the arrangement. The government is limiting the procurement to Tier-2 vendors, which are companies capable of fulfilling contracts worth more than $2 million.
Public Works argues smaller vendors can participate by subcontracting from Tier-2 vendors, but local SMEs maintain the contract is part of an ongoing trend of consolidating services and shutting out the smallest companies.
Jeff Lynt, chair of the Canadian Business Information Technology Network (CABiNET), which represents local independent IT service providers, says the best hope smaller Tier-1 companies have of participating in contracts such as this is to receive set-asides from Tier-2 firms.
But such a proposition is tricky, he says. “We want direct contact with government agencies. And it’s not beneficial to the taxpayer to have more middlemen in the process; it costs more.”
Mr. Lynt says the government could have chosen to break up the contract into several pieces, a situation that is common in supply arrangements.
This tender is part of a trend of the government bundling together services that, especially in this case, have no expressed justification for the bundling, he says. Mr. Lynt asks why the government is shutting out loyal suppliers.
“The (small) companies have been doing this type of work for years and years and years. They’ve been providing good resources to the government and providing good rates and proper expertise.”
In 2009, a parliamentary committee recommended that a business case must be submitted by any department or agency putting a bundled contract out to tender.
The standing committee on government operations and estimates wrote the report based on months of committee meetings, listening to the concerns of small and medium-sized enterprises.
After the report was released, the Canadian Federation of Independent Business gave praise, saying the aim was to have Public Works consider what it is like to be on the other side of the contract.
“(Businesses) don’t want to get a bid simply because they felt they had to be awarded the contract. They want to get it for the merits of the contract, but you have to make sure it is accessible to them,” said Corinne Pohlmann, CFIB’s vice-president of national affairs, in a 2009 OBJ interview.
PUBLIC WORKS RESPONDS
For its part, Public Works says it has restricted the solicitation to Tier-2 vendors under supply arrangement rules, which state that only Tier-2 qualified vendors can participate if the value of the estimated requirement is greater than $2 million.
Splitting up the contract into individual service classes would violate Treasury Board policy, Public Works says. The department adds that for any firm that wants to qualify for Tier-2 status, the Task-Based Informatics Professional Services list will refresh in the fall and companies can apply then.