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Local Preference Challenged

Posted 10/19/2022

Community benefits are an important criterion for evaluation of proposals that request Social Value components as part of the evaluated criteria. A recent ruling 

on a bid protest by West-Can Seal Coating to Saskatchewan Ministry of Highways found that evaluation concerning the use of local labour is contrary to article 503 (3) (b) of the CFTA. The ruling addresses other aspects including fairness and transparency requirements of Chapter 5 of the CFTA, this article will focus on the issue of local preference.

Municipalities and other public sector organizations seek community benefits from their procurements. Realizing community benefit from procurement is possible, however, any evaluated criteria referencing use of local contractors or suppliers could be contrary to the CFTA and/or other applicable trade agreement legislation. So, how to reconcile local social and economic development preference with the CFTA?

The following assumes your organization’s governance has adopted a Social, Sustainable Procurement Policy and related procedures:

  • ·        Educate your marketplace. Sponsor workshops, liaise with your local Chamber of Commerce, and ensure that all information is available to any that care to look to ensure transparency.
  • ·        Engage in vendor development activities including social enterprises.
  • ·        Pre-qualify suppliers of goods and services for procurements that are below total contract value thresholds of the trade agreements.
  • ·        Evaluated criteria can still include employment of persons with barriers to employment, utilization of social enterprises, provision of training, paying living wages, and similar criteria as long as it is not tied to a geographic location, i.e., “local”.

It is probable for many projects that the local supplier could offer best value including price. Development of a productive, efficient supply chain involving local businesses is real economic development. By being competitive those businesses could expand into other markets thereby benefiting your local area.

As always this is the opinion of a procurement professional, it is not legal advice, consult your legal counsel for that advice.