Loco buysmart local_purchasingfinal_7nov11

Local Purchasing Buysmart Workshop October 27, 2011 LOCO BC Amy Robinson amy@locobc.com 604-351-1664 Supporting local business, building community and growing the local economy.

Local Procurement: Who is LOCO?• We’re building a movement! – Connect, support & promote local businesses – Build community – Grow the local economy• Spending as a Lever for Sustainability – Consumers: Own Your Own Campaign – Businesses: Connect and Support – Government: $100+ billion/yr lever

Local Procurement: Agenda• Overview – Benefits, Drivers & Challenges of Buying Local – Case Studies & Presentation by Victoria Wakefield, UBC

Local Procurement: What is Local Procurement• Purchasing goods or services• Balancing factors of cost, quality, service, sustainability &origin – Origin of goods – Ownership of the goods/services provider• Seeking out alternatives• Giving access, consideration and potentially preference to local supply/suppliers

Local Procurement: Benefits• Enhance our communities• Provide security and diversity of supply• Build employment and wealth by circulating dollars many times between local businesses• Reduce the transportation impacts of global supply chains

Local Procurement: Benefits• Economics: – BC’s small businesses (<50 employees) are: • 98% of provincial economy • 57% of private sector jobs (46% of all jobs) • 32% of provincial GDP• Ex. $100 Spend – Economic multiplier • Non = $43 • Local = $68 (+25%)

Local Procurement: Local Procurement Drivers• Private Sector: – Brand – Deliver on corporate values • Supporting community • Reduced footprint – Build relationships• Public Sector: – Reinforce organizational goals & values • Supporting community • Economic development • Reduced footprint – Ensure public spending for public good• Labour: – Maintain relationships with members – Protect Canadian jobs

Local Procurement: Challenges• Defining local• Cost• Efficiency• Supply & capacity – Supply criteria – Small business capacity• Regulatory issues

Local Procurement: Challenges• Challenge: Defining “Local” – Products & service differences – Supply chain vs. company ownership• Strategies: – Geographic boundary – Company size or composition • SMEs • Women owned, Minority owned – Ownership & Control • Locally owned; Canadian owned (50+%) • Control over procurement & marketing

Local Procurement: Challenges• Strategies: Defining “Local” – Use whatever definition inspires/allows you to build alliances & take action – Ex. City of Ventura “The City of Venture supports small local businesses. A business is small if it employs less than 100 and has average annual gross revenues of less than $20M. A business is local if it has held a business license in the City for 12 months preceding the bid. Small local bidders are given preference on City projects of up to 5% when responsibility and quality are equal to competition on contracts <$250K”

Local Procurement: Challenges• Challenge: Cost – Local environment & labour standards – Local land prices & tax structures• Strategies: – Buy local services – Products: • Buy in season • Increase size of buy or term

Local Procurement: Challenges• Challenge: Efficiency – Bundled contracts• Strategies: – Create & communicate a policy – Work with existing suppliers – Alter process (ex. split into ‘lots’)

Local Procurement: Challenges• Challenge: Supply & Capacity – Availability of products & services • Consistency of supply • Specific needs – Small businesses capacity to supply needs• Strategies: – Seek out available supply – Address specific needs (product substitution) – Build capacity by ensuring access: • Avoid bundling contracts • Advertise locally • Communicate needs to local suppliers

Setting the Stage: Increasingly Competitive EnvironmentProcurement processes are subject to:1. Statutory and common law rules2. Administrative policies or directives; and3. Rules of applicable Trade Agreements (“TAs”)Provincial & municipal public procurement will become much more open and competitive:• Canada is under intense pressure from its trading partners (e.g., US, China, Europe, India) to open up non-federal procurements to foreign suppliers e.g. Crown corporations, utilities, provinces and municipalities• Previously only federal procurements subject to TA• Pressure from Canada’s trading partners is being fuelled by their own suppliers who want access to “the entire” Canadian procurement market

Key AgreementsAgreement CoversAgreement on Internal Trade (AIT) Applies to provincial, municipal and MASH contracts being bid on by “Canadian” suppliersNew West Trade Partnership Agreement Applies to B.C. Alberta and Saskatchewan(NWPTA) provincial, municipal, crown corporations and MASH procurement being bid on by suppliers carrying on business in those provincesCanada-US Agreement on Government Applies to provincial and municipal procurementsProcurement (CUSPA) being bid on by US suppliersNAFTA-Chapter Ten Applies to federal and provincial contracts being bid on by US, Canadian and Mexican suppliersWTO Agreement on Government Procurement Applies to federal contracts being bid on bysuppliers(GPA) from 37 countriesCanada-EU Trade Agreement (CETA) May apply to procurements by federal, provincial,Negotiations municipal, Crown corporations and utilities/commissions being bid on by EU suppliers * implications for Can-US AGP

Canadian Regulations Agreement on Internal Trade (AIT)Purpose: Reduce/eliminate barriers to movement of persons, goods, services, and investment in Canada.Issues: Eliminating local price preferences, biased technical specifications, unfair registration requirements for non- resident suppliers to ensure equal access to procurement for all interested Canadian suppliers.Applicability: Government entities, MASH Sector, and crown corporations. Crown Corp Gov’t MASHGoodsThresholds: $25K $100K $500KServices $100K $100K $500KConstruction $100K $250K $5 million

Canadian Regulations New West Partnership Trade Agreement (NWPTA)Purpose: Ensures that parties do not restrict or impair trade between, among the Parties, or investment or labour mobility between or among the Parties.Issues: Work toward the enhancement of sustainable development, consumer and environmental protection, and health, safety and labour standards.Applicability: Alberta, Saskatchewan and British Columbia. Provincial and municipal entities, the MASH sector and crown corporations. Crown Corp Gov’t MASHGoods $25K $10K $75KServices $100K $75K $75KConstruction $100K $100K $200K

Canada - US Regulations North American Free Trade Agreement (NAFTA)Purpose: Achieve greater competition for, and transparency in, government procurement.Issues: Eliminates the protection of domestic products or suppliers or discrimination among foreign suppliers.Applicability: Virtually all federal government agencies in the three countries, as well as many government-controlled enterprises and provincial government entities. Crown Corp Gov’tGoods $383,300 $27,300 (CD/US) or $76,600 (CD/MEX)Services $383,300 $76,600Construction $12,200K $9,900K

Canada – US Regulations Canada-US Procurement Agreement (CUSPA)Purpose: A provincial and territorial procurement commitments in exchange for U.S. sub-federal commitments.Issues: Temporary Canadian procurement commitments for construction projects for some provincial/territorial agencies and for a significant number of municipalities, in exchange for the U.S. exempting Canada from the “Buy American” provisions of the Recovery Act for seven federal programs.Applicability: B.C. has offered access to all Ministries, Boards, Commissions, Agencies and Committees but not Legislative Assembly procurement. Procurements by covered varies Gov’t between provinces. Goods $604,500 Services $604,500 Construction $8,500,000

International Regulations World Trade OrganizationPurpose: “Like products” are treated similarly, regardless of source.Issues: Public procurement isn’t covered in general provisions. However, the WTO’s Government Procurement Agreement applies directly to 2 categories of procurement not covered before— services and sub-central entities.Applicability: Applies to Central agencies, provincial governments and affiliated agencies and central government contracts. Crown Corp Gov’t MASH Goods $355,000 $130,000 $355,000 Services $355,000 $130,000 $355,000 Construction $5,000K $5,000K $5,000K

International Regulations Canada-EU Comprehensive Economic and Trade Agreement (CETA) Canada and the EU is in negotiations for a comprehensive economic and trade agreement.Issues: Proposed CETA procurement rules would prohibit municipalities from:• Restricting tender calls to local or Canadian companies or requiring that bidders use some proportion of local or Canadian goods, services or labour in providing the goods and services being tendered;• Using procurement for sustainable development purposes such as promoting food security by adopting “buy local” food practice.Applicability: All central government entities, all other central public entities, as well as all sub-central government entities (i.e., at the local, regional or municipal level), be open to European goods and services. In addition, the EU is requesting an opportunity to bid on contracts awarded by the MASH sector as well as by airports, public transit systems, ports, municipal water services, and power and energy authorities such as BC Hydro and Hydro-Québec.

Federal/Provincial/Municipal Monetary Thresholds (CDN $ January 1, 2010 – December 31, 2011)TA Entities (Departments & Agencies) Crown Corporations Goods Services Construction Goods Services ConstructionAIT Annex502.1A 25,000 100,000 100,000 25,000 100,000 100,000Annex 502.3MASH 502.4 N/A N/A N/A 500,000 500,000 5,000,000 N/A 100,000 100,000 250,000 N/A N/ANWPTA 10,000 75,000 100,000 25,000 100,000 100,000C-U.S. AGP*Permanent 604,500 604,500 8,500,000 N/A N/A N/A

Case Studies: University of Victoria• Policy Context:Procurement Principles 1. Use Quadruple Bottom-Line (4BL) acquisition evaluation framework for major procurement decisions – “People, Planet, Profit, Socio-Cultural “ 2. Increase use of locally produced goods and services to reduce GHG emissions where practical & economically feasible 3. Calculate & incorporate into purchasing decisions the value of GHG as compared to other supplier products and distribution points (ground transportation, air travel, energy- electricity, fuel, coolants, etc). 4. Incorporate into sourcing documents the requirement for supply of products produced locally where feasible & practical 5. RFP and contract for green cleaning supplies for campus wide use

Case Studies: UVic Local Food• Goal: Support local food producers whenever and wherever we can.• Benefits: – Use local labour – Minimize carbon footprint of food purchases.• Means: – Standard Sourcing Clauses for all Formal Solicitations – Stewardship Provisions• Initiatives: – Local Produce Acquisition Initiative - Organics – Local Meats and Dairy Acquisition Initiatives – Produce RFP – Islands West• Success: 46% produce from Vancouver Island farms; 36% of meat and poultry comes from BC producers; Baked goods including bread, muffins, pastries, buns & pizza from bakeries located on the southern part of Vancouver Island

Case Studies: UVic Local Procurement• Produce RFP 402 and Contract – Assessment of local availability – 46.4% by VI producers (38.7% of the contract value approx $1mil/year) – VI firm was awarded the contract; Supplier uses local labour – Calculated GHG emissions in award decision• Pizza RFP 441 – Approx. $400,000 – VI firm was awarded the contract; Supplier uses local labour – Vancouver Island Products Clause• Future RFP’s – Meats (Approx. Annual Value $1 mil); Dairy (Approx. Annual Value $800,000); Eggs; Baked Goods

Case Studies: UVic Local Procurement• Vancouver Island Products & Services RFP Clause• UVic acquisitions are conducted with compliance to Federal, Provincial, and Local legislation, regulation, and policy directives as stipulated in UVic Policy 5105 as follows: – It is the policy of the University of Victoria to acquire goods and services through a competitive process whenever practical that results in supply arrangements at the most effective net cost, in the correct quantities, of the appropriate quality, and from the most responsive and responsible source. – Purchasing Services shall comply with the letter and spirit of laws and regulations governing the public procurement function. – Purchasing Services will make purchases in compliance with legislation and statutory regulations including CSA for safety standards, WHMIS for hazardous products, customs duties, excise taxes, GST and provincial sales taxes.” – 4BL in best-value analysis and evaluation addresses monetary value placed on the carbon footprints of the respective products and or services.* *BSI - PAS 2050 Methodology to calculate GHG emission values in RFP evaluations

Case Studies: City of Toronto• Policy Context – Local Food Procurement Policy (2008) • Progressively % of food budget from local sources • Defines “local” as food grown in the Greater Toronto Area, the Greenbelt of Ontario and other regions of Ontario • Phased approach for implementation - Phase I by Children’s Services – Goal of 50% Local Food Procurement – Climate Change, Clean Air & Sustainable Energy Action Plan

Case Studies: Toronto Local Food• Toronto Environment Office with Children’s Services Department targeting Municipal Child Care Services ($2.2 million/yr) – Mapped out process for menu prep, food ordering and on-site food prep – Worked with food distributor to assess existing supply chain (600+ manufacturers & suppliers) – Analysis of food expenditures – Tracked food purchases by supplier & site for one year

Case Studies: Toronto Local Food• Outcomes: – Origin Map – Baseline – Opportunities• Results: – Increase local sourcing 13.4% to 33% ON produced goods – Minimal operational & financial impacts • 15K increase in budget anticipated (none seen as of 1st quarter 2009)

Local Procurement: Case Studies• Other examples – Federal Government: • National Shipbuilding Procurement Strategy – $35 B shipbuilding initiative » $25 billion combat vessel contract Irving Shipbuilding (Halifax) » $8 billion non-combat contract to Seaspan (Vancouver) – Ontario Government: • Clean Energy Program – Domestic content requirement » Domestic content provisions » Requires that 60% of value of wind and solar be sourced from within Province » Incentives to local rather than barriers to others

Local Procurement: Case Studies• Other examples – City of Toronto: • Subway car contract required Canadian-made • Created 1,000 well-paying jobs in Thunder Bay – City of Victoria: • Required local servicing in office machines contract • Sources consulting services from island suppliers within law – City of Ottawa: • Local preference on contracts where they have a tie – Vancouver Convention & Exhibition Centre (VCEC) • Local purchasing a requirement for operations (local ingredients “whenever possible”) • Annual purchases include: – 12,000 heads hothouse butter lettuce – 18,000 bottles BC wine – 1 tonne mushrooms – United Way & CUPE • Buy Canadian policies

Local Procurement: Case Studies• Other examples – Eclipse Awards • Local recycled glass • Local FSC certified wood – Saul Good Gift Co. • BC products and businesses – Peake of Catering • Locally sourced products wherever possible

Local Procurement: Next Steps• 10 Action Steps: 1. How does local support organizational mission/brand 2. Assess what you buy most of (by product or spend) 3. Assess what is available locally 4. Think about broader context - what local industries need the most support? Ex. forest products, food, etc. 5. Create a list of opportunities 6. Address your policy context (sustainable procurement, carbon, economic development) 7. Build support 8. Add standard clauses 9. Advertise widely where small businesses are likely to look 10. Work with existing suppliers and reach to find new ones

Local Procurement: Next Steps• Build Support: – Sustainability Office – Food Advocacy Groups – Sustainability NGOs • LOCO • Buysmart • Local Food Plus – Existing supplier base – Other aligned purchasers: • Universities • School board • Labour organizations

Local Procurement: Commodity AreasBuysmart Top 10 (with a few LOCO additions) 1. Electronic Equipment 2. Office Supplies 3. Office Furniture 4. Paper 5. Lighting 6. Cleaning Supplies & Custodial 7. Meetings/Conferences/Events 8. Business Travel 9. Gifts & Apparel (incl. uniforms) 10. Coffee, Tea, Food& Other Commodities 11. Food & Catering 12. Couriers

Local Procurement: Next Steps Don’t Accept the Status Quo Take Action Collaborate & Communicate

Thank You Amy Robinson amy@locobc.com www.locobc.com 604-351- 1664Thanks to Our Partners

Thank You LOCO BC Amy Robinson Info@locobc.com 604-351-1664 BuySmart Bob Purdy bpurdy@fraserbasin.bc.ca604 488-5358Supporting local business, building community and growing the local economy.

Loco buysmart local_purchasingfinal_7nov11

by amyrvancouver on Nov 08, 2011

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Loco buysmart local_purchasingfinal_7nov11 — Presentation Transcript