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Local Preferences

Posted 5/29/2018

We often see a term in the evaluation section of requests to supply similar to “all other factors being equal the more local supplier will receive the contract” as a means to show local preference. This may look good on paper but in reality not so much.

What are the chances that all other factors will end up being equal, and if they are equal, there may be other questions that could be asked. Is there any evidence of collusion amongst respondents?

How robust, ironclad and defensible are your evaluation procedures?

Procurement conforming to trade agreements restricts the use of local preferences. We have written about this before, see my blog: A local preference clause could be misleading and if relied upon could result in a court date to defend its use.

We suggest that the real issue to be addressed by procurement is Social, Economic and Environmental responsibility. Simply addressing this in a procurement request is not a way to get around the trade agreements. These responsibilities should be incorporated into the organization’s values statement, strategic plans and policies THEN they could be articulated in procurement requests. Questions that could be asked of suppliers local and distant, the responses to which could form part of the evaluation include:

·        What new jobs could be created in the region as a result of a contract?

·        What educational opportunities could be available to employees?

·        What opportunities could be created for those with employment barriers?

·        How would the contract protect the environment?

·        What partnerships could be created with social enterprises that create meaningful work for those facing employment barriers?

A social, economic and environmentally responsible organization will “work the talk” when it comes to improving local conditions no matter whom they decide to contract with. The terms of the Canada Free Trade Agreement appear to not restrict contracting with certain social enterprises (Sec. 504) and to not restrict use of specifications to conserve natural resources or to protect the environment (Sec. 509).

(As always, nothing in this publication is intended to convey legal advice, always consult legal counsel when drafting procurement documents)