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Open and Ethical Procurement with Private Suppliers

How to Avoid Making Headlines for the Wrong Reasons

While the laws and practices surrounding public procurement vary widely among Canadian cities, some of them should always be taken into consideration by municipalities when interacting with suppliers. Open North has been interested in the issue for a few years and we give here an overview of some of these core practices.

Fairness Between Suppliers

The cardinal principle to be respected in public procurement is to always give all suppliers the opportunity to submit compliant bids on public procurement. Not doing so − i.e. targeting directly (by name) or indirectly (through selection criteria targeting a specific supplier) − is considered unethical behaviour that is contrary to this principle and, in several provinces, can even be an illegal practice. It also means that an industry (e.g. the open source) should not be excluded from public procurement.

Concrete Actions

In practice, implementing the above is more complex than it seems. To help you see the light of day, we have compiled a list of simple and concrete actions that will make your procurement practices fairer. 

1. Meetings With Suppliers

  • Only a small number of officials should be allowed to discuss with or meet with current or potential suppliers. In the case of information technology, they should be procurement officials and information technology architects.

  • Any request for a meeting by an information technology provider (including with elected officials) should be directed to the Chief Information Officer.

  • Any meetings or exchanges, electronic or otherwise, between an information technology provider and the City should be documented and ideally published on the City’s open data platform.

  • Never accept a product demonstration by a supplier or ask for one. This type of exchange must be framed by a tendering process to avoid placing the city in a conflict of interest situation.

2. Call for Tenders Drafting

  • It is essential to clearly define the problem to be solved before making the decision to purchase a solution. Therefore, you should always specify the problem you want to solve and its scope (whom it concerns).

  • Once you have defined the problem and confirmed that technology can help solve it, we recommend that you conduct market-neutral analyses (i.e. comparing solutions against each other using international features and standards). Don’t forget dto also conduct total cost of ownership analyses that will allow you to better estimate the costs of the various solutions available. 

  • Involving suppliers in the drafting of public tenders is an unethical practice (it gives a supplier a competitive advantage) and, in some provinces, potentially illegal. 

Where a supplier has participated in any way in an activity or in the preparation of documents that gives it an advantage on a related project, the originator should explicitly announce in the publication of the call for tender or by addendum that such supplier or people may not participate in the bidding process.

  • Since cities are public bodies subject to transparency rules for public procurement, they should refuse to sign non-disclosure agreements with suppliers.

  • Whether the procurement is a public tender or an untendered procurement, the goal should always be to maximize the number of compliant bidders in order to ensure fairness, promote competition, and reduce costs and risks.

3. Transparency: A Powerful Control Tool

Legislation to help Canadian cities fight corruption and collusion in government procurement varies widely from a province to another, with the most comprehensive having been adopted in Quebec. In addition, offices of the inspector general [1] have been created in some cities with the power to cancel suspicious municipal contracts. 

In terms of public contracts, the first effective control measure is the publication of open data on public tenders and contracts. This data should include [2], as a minimum, the following information:

  • The execution performance of the contracts awarded;

  • The unit prices of goods;

  • The risk analyses;

  • The expense evolution related to each contract.

Cities should also consider the inclusion of basic anti-corruption [3] and conflict of interest clauses in their tenders.

Concluding

Canadian cities still have a long way to go to maximize the ethics of their relationships with suppliers and their transparency in public procurement. Indeed, certain essential contractual clauses such as data hosting location, primacy of local law, or ownership of code developed by a supplier, are not yet uniformly included in public tenders. That’s why Open North has created a best practice guide to support cities in their procurement practices. It is a living document that will constantly change over time with the contributions of Open North’s network.


  1. See, for example, the site of the Office of the Inspector General of the City of Montreal.

  2. For the moment, the City of Montreal is the only Canadian city (to our knowledge) to publish its public contracts.

  3. They could use as examples those of the International Chamber of Commerce.

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