Ontario Water News

Let Them In: Small Businesses and Municipal Procurement

Jeff Leal, Ontario’s Minister Responsible for Small Business, recently announced that the government is providing small businesses with better access to government support and procurement opportunities. Ontario will designate 33 percent of its procurement spending to small- and medium-sized businesses by 2020.

Many companies often cite procurement as a challenge. In a May 2017 report examining an innovative City of Guelph procurement project, the Brookfield Institute cites a few reasons for these complaints:

  • Many small companies do not subscribe to Request for Proposals (RFP) opportunity web services and, therefore, are not aware of opportunities.
  • RFP responses are onerous and small companies are short on resources.
  • Companies may not know whether a request fits with their product or expertise and have difficulty connecting directly with the proponent to inquire.

This latest Ontario announcement is one of many procurement projects Ontario has launched to address small business challenges. The Ministry of Government and Consumer Services created the Innovation Procurement Initiative in 2014 to address procurement related gaps and barriers to innovation development and adoption in Ontario’s broader public sector (BPS). In 2016, the Initiative released the Interim BPS Primer on Innovation Procurement, a guide to support municipalities in planning, designing, and implementing innovation procurement.

Ontario also launched the Green Focus on Innovation and Technology (GreenFIT) Program to help vendors test solutions that contribute to the greening of the public sector. The Small Business Innovation Challenge is another Ontario initiative that uses public sector challenges as a platform for inspiring small- and medium-sized enterprises (SMEs) to develop and test innovative technology solutions.

Although these initiatives provide incentives to public sector entities to adopt innovative solutions, municipalities still need help with the procurement aspect of this process and with understanding how this links to long-term value.

WaterTAP has been working to understand both municipal procurement and its link to value. In collaboration with Consulting Engineers of Ontario and the Ontario Coalition for Sustainable Infrastructure, we’ve held two stakeholder workshops, through which we have developed a set of criteria for sustainable municipal infrastructure procurement:

  1. Identify desired outcomes first – Municipalities undertaking infrastructure projects should strive to improve environmental, social, and economic performance outcomes. These outcomes should be weighted according to municipal project priorities.
  2. Account for life-cycle monetary costs and economic benefits – Procurement of sustainable municipal infrastructure must account for elements such as timeframe, materials, capital, and life-cycle costs, adaptability of infrastructure, geographic scope, and anticipated benefits to ensure desired economic outcomes for the community.
  3. Account for social and environmental benefits – Municipalities should consider how a procured project or service will impact quality of life and economic outcomes within the community, and consider ecosystem impacts.
  4. Explicitly consider the type of procurement model that should be applied to the project – The chosen procurement model (e.g., public-private partnership, qualifications-based selection, price-based selection) should depend on the context of the project (e.g., size, complexity, capacity, location, and innovation requirement).
  5. Ensure that the process manages risk and maximizes other criteria – Municipalities should define the risks associated with achieving the criteria, the tolerance or accepted level of these risks, and the risk mitigation strategy and monitoring plan.

Although not explicitly focused on innovation, the criteria make room for innovation in the procurement process. This levels the field for smaller, innovative consulting firms, suppliers, and service-providers.

WaterTAP convenes a monthly Procurement Group meeting to further explore how to apply these criteria in the municipal context. If you are interested in joining this group, want to keep up with its activities, or want to share your work on procurement, please contact Lesley Herstein (lesley.herstein@WaterTAPontario.com).