Surety Association of Canada challenges Newfoundland and Labrador's new procurement strategies

Surety Association of Canada challenges Newfoundland and Labrador’s new procurement strategies | Insurance Business Canada

Insurance News

Surety Association of Canada challenges Newfoundland and Labrador’s new procurement strategies

It describes the strategy as “misguided”

Insurance News

By
Jonalyn Cueto

The Surety Association of Canada (SAC) has raised concerns regarding the Newfoundland and Labrador government’s procurement strategies.

Earlier this week, the provincial government of Newfoundland and Labrador unveiled two new procurement strategies to support provincial suppliers’ success in securing government contracts while integrating sustainability principles into procurement processes.

It maintained the provincial preference discount, increased open call thresholds, promoted exemptions under trade agreements, and proposed a reduction in the use of bid bonds.

But SAC said these strategies could have detrimental effects due to a “misunderstanding” of bid bonds and their role in protecting taxpayers and small businesses.

According to SAC, bid bonds, which serve as financial guarantees for vendors bidding on projects, are slated for potential reduction and elimination under the new procurement strategies.

SAC president and chief operating officer Steven D. Ness criticized the DTI’s assertions about bid bonds, calling them “misleading,” “inaccurate,” and in some cases, “patently false.”

“It’s alarming that such inaccuracies and misguided assumptions would lay the groundwork for public policy decisions,” he said.

New strategies on the table

According to the provincial government, the Newfoundland and Labrador First Procurement Strategy focuses on creating an environment conducive to the success of provincial suppliers.

It aims to embed sustainability considerations into procurement practices alongside traditional factors like price, quality, and service. Additionally, it supports new suppliers by providing training and knowledge through information sessions, reverse trade shows, and consultation on significant procurements.

In response, SAC has initiated dialogue with the DTI and the Honourable John G. Abbott, Minister Responsible for the Public Procurement Agency, to address the “misinformation” surrounding bid bonds and the suretyship process.

SAC said it aims to collaborate with the government to ensure that policies are “grounded in factual information” and “genuinely benefit” taxpayers and local enterprises. The association said it seeking an opportunity to provide educational presentations, elucidating the intricacies and advantages of surety products and processes.

Have something to say about this story? Let us know in the comments below.