PURCHASING POLICIES AND PROCEDURES
XXXXX carries out the purchasing activities under the guidance of the Ontario Ministry of Finance and the associated Supply
Chain Guidelines to ensure that the best practices, consistent and transparent actions are adhered in the material supply
chain. The Procurement Policies and Procedures set out standardized rules for competitive procurement and contracting.
The rules balance the objectives of accountability, transparency, value for money and effective high quality service delivery.
1.
Segregation of Duties:
As an internal control, the segregation of duties and delegation of authority are maintained to ensure the integrity of the
process by reducing the exposure to inappropriate, unauthorized or unlawful expenditures. The segregation of duties is to
prevent one person from having both access to assets and the responsibility for maintaining the accountability of those same
assets. The segregation of duties is done so that no one employee or group will be in a position to perpetrate and to conceal
errors or fraud in the normal use of their duties.
At the segregation of the following activities occurs as follows:
Roles
Activities / Duties
Who
Requisition
Authorize the supply chain department to place an
order.
End-user requesting the product or service.
Budget
Authorize that funding is available to cover the cost of
the order.
Departmental budget holder.
Commitment
Authorize the release of the order to the supplier
under the agreed upon contract terms.
Purchasing / Materials Management role in the
supply chain department.
Receipt
Authorize that the order was physically received,
correct and complete.
Individual responsible for receiving the goods.
Payment
Authorize release of payment to the supplier.
Accounts Payable role within the finance team.
2.
Approval Authority:
Commitment Approval Authority Schedule
Delegate Purchasing
Authority Level
Total Value of
Commitment
Capital Equipment
Purchases
Capital
Equipment
Purchases
On
Budget
Not on Board of
Directors
Approved
Yearly Budget.
Service Contracts
General Supplies
Pricing Agreements
Unit Leader // Team
Leader
<$500
Manager
>$500 to
Approved
GPO Contracts
Review,
Approve
and
Authorize for the General
Supplies Category.
Approval
and
Review and Approve Service
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Review and Approve on
pricing arrangements with
Director
–
Ambulatory
Care,
Inpatient
&
OR/Chief
Nursing
Officer, Finance &
Administration and
Human Resources
< $5,000
Authorization
<$5,000
Approval
Authorization.
and
Approval
Capital
Equipment Purchase.
Contract.
final authorization
obtained from CEO.
Review and Approve Service
Contracts.
Review,
Approve
and
Authorize for the General
Supplies Category.
On approved
budget.
being
Review and Approve on
pricing arrangements with
final authorization being
obtained from CEO.
Member on the
Senior Management
Team
President / Chief
Executive Officer
>$1,000
Approve, Authorize
and Sign purchase
order on Capital
Purchased
over
$1,000.
<$5,000
Approve,
Authorize
and Sign purchase
order on all Capital
Equipment purchases
not on the Board
approved
yearly
budget.
Review,
Approval
and
Authorization
Signature
required on all service
contracts regardless of value.
Review,
Approval
and
Authorization
Signature
Required
on
Pricing
Agreements of inventory
items on short-term and
long-term.
Approve,
Authorize
and Sign purchase
order.
Approves
cost
overruns of less than
$5000 on budgeted
items.
>$ 5000 but <
$1,000,000
Board of Directors
3.
Approve,
Authorize
and sign purchase
order.
Annual approval of
Capital Equipment
Budget.
Approval required on
individual basis in
cases where cost overrun on budgeted
items are greater than
$5000 and for Capital
Equipment Purchases
not on the approved
yearly Budget greater
than $5,000.
Competitive versus Non-Competitive Procurement Process Determination:
XXXXX must conduct open competitive procurements where the estimated value of the procurement of goods, services or
construction is $100,000 or greater.
Total Procurement Value
Procedure
<$100 - goods & services
Petty Cash or Purchase Order
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<$1000 – goods & services
Purchasing Card and/ or Purchase Order
>$1,000 – goods & services
Invitational competitive procurement (minimum of three suppliers invited to bid),
may use SSO or GPO
>$100,000 – goods & services
Open Competitive Process, may use SSO or GPS. Potential future use of Merx online tendering process.
4.
Competitive Procurement:
4.1
Information Gathering:
There are various methods that may be used to acquire information about the goods or services that are require to be
procured or the capabilities of the market to deliver the goods or service required. The information gathered during this
process will assist us to plan a fair and cost-effective procurement process, define the requirements for the procurement
documents, and/or identify whether there are qualified and interested suppliers. There are two options to choose for the
information gathering process – informal and formal process.
4.1.A.
Formal Information Gathering Process:
Request for Information (RFI)
The purpose of an RFI is to gather general supplier or product information. This is used when it has not yet been determined
the exact goods or service we are requiring and what options are available to us.
Request for Expressions of Interest (RFEI)
The purpose of the RFEI is to gather information on a supplier’s interest in an opportunity or information on supplier
capability/qualifications. This is used when we want to gain a better understanding of the capacity of the suppliers to provide
the service or solutions needed.
4.1.B.
Pre-Qualification of Suppliers
Request for Supplier Qualifications (RFSQ)
To create a pre-qualified supplier list to use on future procurements we gather information on the supplier’s capabilities and
qualifications through a RFSQ. The comprised list is called a Vendor of Record (VOR) or a Preferred Suppliers List.
Information Required
RFI
General supplier or product information
RFEI
X
Information on supplier’s interest in opportunity
X
Information on supplier’s capabilities / qualifications
X
Pre-qualified suppliers’ list desired
5.
RFSQ
X
Open Competitive Procurement:
An open competitive procurement process will be used where the estimated value of the goods or services is greater than
$100,000.
For the procurement of less than $100,000 an open competitive procurement process is recommended and as a minimum
requirement an invitational competitive bid with three or more suppliers is required.
XXXXX participates in Group Purchasing practices through the following organizations:
1. SSO
2. GPO
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6.
Competitive Documents:
The three main types of competitive documents used in the competitive procurement process are as follows:
6.1 Request for Proposal (RFP)
The purpose of this document is to request suppliers to supply solutions for the delivery of complex goods and
services or to provide an alternative option or solution. The evaluation criteria are based on more than just price.
6.2 Request for Tender (RFT)
The purpose of this document is to request suppliers’ to bid on goods and services based on stated delivery
requirements, performance specifications, terms and conditions. The evaluation criteria are heavily weighted on
price and delivery.
6.3 Request for Quotation (RFQ)
The purpose of this document is to request suppliers’ to bid on exactly what is stated in the document as the goods
are described in great detail. The evaluation criteria are solely based on price.
Competitive Documents issued directly by follow the Broader Public Service Supply Chain Guidelines.
Included within the competitive documentation are the following details:
1. Full disclosure of the evaluation criteria, process and methodology to be used in assessing the submissions. The
competitive documents will clearly identify the requirements of the procurement: the criteria that will be used in the
evaluation of bids; and the methods of weighting and evaluating the criteria. The competitive documents will
identify those criteria which are considered mandatory and any technical standards that are required to be met.
2. The contact information of the person to contact for additional information on the procurement documents. This
information will include the name, telephone number and location of the contact person. Included will be a
statement that if suppliers contact anyone other than the designated contact person that they may be disqualified
from the process.
3. Clearly state conditions that must be met before obtaining procurement documents such as conflict of interest
declarations, confidentiality agreements and non-disclosure agreements, if required.
4. The address, date and time limit for submitting bids to procurement documents. Bids received after the closing date
and time will be returned unopened.
5. The process, date and time limit for the submissions of questions regarding the procurement documents.
6. The time and place of the opening of the bids in the event of a public opening.
7. The submission rules and competitive clauses to be followed, which may include bid format, language, inclusion of
an executive summary, number of copies required, attendance at the bidders’ conference.
8. A draft copy of the contract to be signed in the event of an award of the procurement.
9. Request a list of any subcontractors to be used to complete the procurement process.
10. The period of irrevocability of bids cannot be withdrawn 120 days from the closure of the competitive process.
11. Included in goods and services documentation valued at over $100,000 a statement that the procurement is subject
to Ontario’s trade agreements.
12. A statement to notify the supplier that any confidential information supplied to us may be disclosed by the where
we are obliged to do so under the Freedom of Information and Protection Privacy Act (FIPPA), or by order of a court
or tribunal or otherwise required by law.
7.
Minimum Response Time:
For procurement activities in excess of $100,000 the supplier will be provided with a minimum of 15 calendar days to provide
their responses to XXXXX.
8.
Closing Dates:
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All closing dates are to occur on normal business days. Monday to Friday excluding provincial & national holidays and
submissions delivered after the deadline must not be considered. Timely closures are critical to ensure a fair and transparent
process for all proponents. Normal business days are for the purpose of this policy those which the office of Materials
Management at are staffed by the procurement group.
9.
Communication during the competition period (blackout period):
The Materials Management department is responsible for managing the communication process during the blackout period
through to the contract award. During the blackout period all communication with the suppliers involved in the process
occurs formally through the contact person identified in the competitive documents.
During the competitive period (blackout period) the competitive procurement documents may be clarified or modified
through the use of one of the following two types of responses:
1. An addendum response
2. A question-and answer response
The addendum or question-and-answer responses are made available to all the potentials suppliers.
10. Bidders’ Conference:
A bidders’ conference will be held if the believes there is information that potential suppliers will better understand if the
information is presented to them directly in a face-to-face manner. All the questions and answers will be documented and
provided to all of the suppliers whether or not they were in attendance of the Bidders’ Conference.
The Bidders’ Conference will cover all the information contained within the competitive documents, including the following:
1. The scope and requirements of the procurement.
2. The submission guidelines.
3. Timelines for the competitive process, including deadlines for questions and submissions.
4. The evaluation criteria, process and methodology.
5. The contract information.
11. Evaluation Criteria:
The evaluation criteria are to be developed, reviewed and approved in advance of the competitive bid process. This is to
ensure that all the proponents are aware and able to provide submissions that meet with the original intent of the document.
When evaluating the bids not only will price be a considerations but also the quality, quantity, transition costs, delivery,
servicing, environmental considerations, the capacity of the supplier to meet the requirements of the procurement,
experience, financial capacity of the supplier.
12. Evaluation methodology:
Evaluation Methodologies are to be fully disclosed as part of the requesting documentation to ensure their understanding of
all the proponents and delivery of expectations. This ensures an equal assessment of the organizations needs and assists in
the quality of the submissions. The mandatory requirements must be clearly documented in the competitive documents. All
weights must be clearly indicated for rated requirements.
13. Evaluation Process:
Initially in the evaluation process it must be determined whether or not the submissions are compliant.
Examples of irregularities that may be contained in the bids making them non-compliant.
Irregularities
Response
Late bids.
Automatic rejection and returned unopened to the bidder.
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Unsealed envelopes.
Automatic rejection.
Incomplete, illegible or obscure bids or bids which contain
additions not called or, or erasure, alterations, errors or
irregularities of any kind.
Automatic rejection.
Failure to attend mandatory site visits – if required.
Automatic rejection.
Conditions placed by the bidder on the total contract price.
Automatic rejection.
Change in quality level required in competitive documents.
Automatic rejection.
Changing the terms stated in the competitive documents.
Automatic rejection.
14. Non-Discrimination:
Selections based on discriminative evaluations are to be avoided at all times. Evaluation criteria must be established in such a
way as to eliminate any discrimination.
15. Contract Award:
The agreement between and the successful supplier must be defined formally in a signed written contract before the
provision of goods and/or services are delivered. XXXXX must obtain the suppliers signatures before obtaining the CMH’s
designates signature. In situations where an immediate need exists for goods or services the Materials Management
department and the supplier are unable to finalize a contract, a letter of intent, memorandum of understanding or an interim
purchase order may be used. This allows XXXXX to have their immediate needs met while the final negotiations are worked
out in finalizing the contract.
16. Contract Cancellation and Termination:
Within all contracts there will be appropriate cancellation and termination clauses so as to not unduly create excess liabilities
on XXXXXX. Where possible, service level expectations should be in the agreement with the appropriate wording to allow for
cancellation or termination of the contract for breach.
17. Contract Extensions:
The term of the agreement and any options to extend the agreement must be set out in the procurement documents.
Changes to the terms of the agreement requires prior approval from the approval authority before any changes are to be
made to the contract start and end dates.
18. Vendor Debriefing:
XXXXX will offer an opportunity to the proponents for a debrief to allow the suppliers an opportunity to better understand the
mechanism for selection and an opportunity for them to enhance any future submissions.
19. Single Source/Sole Source Acquisition:
In instances where the competitive process is not followed a Single/Sole Source Acquisition form is to be completed by the
authorized requestor defining the reasons for the non-compliance and endorsed by Materials Management prior to award.
To properly complete the form background information will be required such as the justification, actions take and timing of
the product required. The document is to be signed by the authorized requestor to ensure their accountabilities are
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understood through the procurement process then the Department Director and Procurement must review and sign off the
form before requesting a Senior Management Team Member to review and sign off before any action can be taken.
20. Document Retention
All documentation associated with the competitive bid process will be retained for a period of 7 years.
21. Conflict of Interest:
As part of the process all participants, including proponents and evaluators are required in writing to confirm their
impartiality and ensure a fair and transparent decision making process.
Compliance will ensure that all circumstances where a conflict of interest is either known or perceived are mitigated and
documents. All participants in the competitive bid process are required to notify Materials Management in writing of any
such conflict of interest whether or not it is real or perceived.
Failure to comply with this policy may lead up to and include the disqualification for the proponent.
22. Bid Protest:
XXXXX bid processes are to be compliant with the Agreement of International Trade (AIT) and the Ontario-Quebec
Procurement Agreement.
23. Ethics Guidelines:
XXXXXX shall deliver ethical procurement practices in all activities conducted with the highest ethical standards. The integrity
and professionalism of the Materials Management Department, and all departments/staff involved in the procurement
process, are important to all procurement decisions and all employees must act in the highest ethical manner.
’s Materials Management department uses the Supply Chain Code of Ethics provide by the Ministry of Finance for the
Province of Ontario and the Purchasing Management Association of Canada Code of Ethics as reference.
Ontario Broader Public Sector
Supply Chain Code of Ethics
Goal:
To ensure an ethical, professional and accountable BPS supply chain.
I. Personal Integrity and Professionalism
All individuals involved with purchasing or other supply chain-related activities must act, and be seen to act, with integrity and
professionalism. Honesty, care and due diligence must be integral to all supply chain activities within and between BPS
organizations, suppliers and other stakeholders. Respect must be demonstrated for each other and for the environment.
Confidential information must be safeguarded. All participants must not engage in any activity that may create, or appear to
create, a conflict of interest, such as accepting gifts or favours, providing preferential treatment, or publicly endorsing
suppliers or products.
II. Accountability and Transparency
Supply chain activities must be open and accountable. In particular, contracting and purchasing activities must be fair,
transparent and conducted with a view to obtaining the best value for public money. All participants must ensure that public
sector resources are used in a responsible, efficient and effective manner.
III. Compliance and Continuous Improvement
All individuals involved in purchasing or other supply chain-related activities must comply with this Code of Ethics and the
laws of Canada and Ontario. All individuals should continuously work to improve supply chain policies and procedures, to
improve their supply chain knowledge and skill levels, and to share leading practices.
Approved:
Date:
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References
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