Procurement process options coming back to City Council table

Prince George City Council will discuss options for procurement in response to US tariffs at tomorrow’s (Monday) meeting.

City Council originally discussed the matter at a meeting on March 10th.

At that meeting, Director of Finance and IT Services Kris Dalio warned against passing sweeping resolutions in regards to tariffs.

“I’m going to take some time and be really clear on this, what we can do should be very carefully measured on what we should do,” he said at that meeting.

“Restrictive bidding practices do lead to higher prices and poorer quality goods being procured. There’s examples of goods that we heavily rely on within the organization such as Microsoft for our technology, the bulk of our mobile equipment is manufactured in the United States, there’s parts that we sometimes need to maintain existing infrastructure that we can only get from the United States, so there would be large cost and or efficiency consequences if we move away from goods such as those.”

Council passed three resolutions during that meeting as well.

One of which was asking for staff to return a report with options on the next steps regarding the City’s procurement practices and other decisions related to the tariffs. Another was to have a report returned with options of adopting social procurement practices that complement the City’s current procurement criteria.

The report, to be presented to City Council at tomorrow’s meeting, provides three options.

Option 1: Amend administrative procedures to put criteria around informal solicitation preference to Canadian suppliers where practicable when the purchase is below trade agreement thresholds. 

“It is Administration’s recommendation that any preferences to local suppliers, or exclusion of US suppliers, only be done outside of the formal procurement practices to avoid costly legal challenges and potential losses,” the report states.

“This is a low-risk option that should help shift more purchases to Canadian suppliers while not exposing the City to legal challenge.”

The ‘where practicable’ clause included in this option is to address operational challenges where a Canadian alternative may not be available.

For instance, the report states that Fire services has almost no products, equipment, gear or apparatus that can be sourced or manufactured exclusively from Canada.

Option 2: Direct Administration to obtain legal advice for establishing policy that would restrict US suppliers from bidding on formal procurement. 

“Any changes regarding excluding US suppliers from formal procurements above threshold is still subject to significant legal risk and should be done so with careful consideration and legal advice,” the report states.

“With municipalities being exempt from the Canada-United States-Mexico Agreement (CUSMA), the remaining hurdle to exclude US suppliers is the various aspects of law (Community Charter/Local Government Act, contract and administrative) that apply to formal procurement.”

According to the report, this includes considerations such as:

• Ensuring our changes are not viewed as an attempt to influence international dispute matters that are outside of our scope (municipal boundaries) and that discriminating against a group of suppliers genuinely responds to tariffs in a way that benefits the well-being of our community. Parameters and reasons for changes need to be well articulated.
• That we are fully transparent at the start of our procurement process in a legal and defendable manner of our exclusionary preference.
• That our definition of the excluded suppliers is clear, easy to interpret and resistant to legal challenges.
• Any challenges to the legislation the provincial government may make in response to tariffs.

City Administration does not recommend the second option.

Option 3: Continue to operate as normal.

“Given the legal complexities, as well as financial and operational impacts of excluding US suppliers in a political landscape that is changing daily, there is merit in being still for a while until more certain outcomes of the tariff war arise,” the report states.

“This is the option that Administration is recommending.”

Other options to be discussed tomorrow includes the replacement of the skylight at the Prince George Public Library’s Bob Harkins Branch, as well as several quarterly reports.

The full agenda for tomorrow’s meeting can be found here.