City employs 'wacky' procurement scheme

TorontoSun.com
Sept. 11, 2016
By Sue-Ann Levy

The latest wacky scheme to emerge from what has clearly become a leftist-dominated City Hall - once again overrun by pet agendas - has got to be the newly-announced social procurement program.

It was promoted with great fanfare by Mayor John Tory at a press conference on Aug. 31 - Toronto, apparently, being the only large city in Canada to implement such a program.

Dressed in the guise of helping to reduce poverty (as part of that of 20-year, $75-million strategy given to deputy mayor Pam McConnell to keep her happy), the scheme will ask all city divisions, starting next year, to seek at least one quotation (of three) for all goods and services under $50,000 from a diverse supplier.

According to the city’s lengthy report on the program, diverse suppliers are those that city officials (and the poverty industry) consider part of equity-seeking communities in Toronto: Aboriginals, racialized groups, persons with disabilities, newcomers and immigrants, women and LGBTQ people.

Asked how “equity-seeking” communities are defined, Denise Andrea Campbell, a director with social development, finance and administration, said in an e-mailed response that they are any group that “experiences discrimination or barriers to equal opportunity” as defined by the Ontario Human Rights Code and the city’s anti-racism, access and equity policy guidelines.

The diverse supplier must be 51% owned and managed by persons belonging to one of the equity-seeking communities noted above and be certified by an organization tailored to the particular group like the Gay and Lesbian Chamber of Commerce.

The report also suggests for those competitive tenders valued at $50,000 or above, suppliers will be “encouraged” to develop their own diversity programs.

In addition, the new policy calls for one-third (initially) of all those bidding for contracts valued at more than $5 million to participate in “workforce development programs” - that is, hiring economically disadvantaged individuals. Again this will start in 2017.

Some $66,000 has been added to the 2016 budget to put in place a “social procurement coordinator” to support would-be vendors. But the city report concedes that cities in the U.S. where social procurement practices are successful have an entire unit leading the process.

Asked how this will reduce poverty in the city, Campbell said social procurement leads to more “employment opportunities” that benefit residents living in poverty. She did not elaborate.

Keerthana Kamalavasan, speaking on behalf of the mayor, said the program’s goal is to “make it easier” for small-and-medium-sized businesses to compete for city contracts and will not provide preferential treatment to diverse suppliers.

“Where diverse suppliers exist, they must still provide competitive pricing in order to win the business,” she said, noting no new level of bureaucracy is being added to put the program in place.

She added that the program also aims to increase the number of jobs, apprenticeships and training for “people experiencing economic disadvantage.

“The mayor has always believed that the best poverty reduction strategy is a good secure job,” she said.

But if the mayor is truly worried about making it easier for small-and medium-sized businesses to compete, why does the city make it so hard by insisting that all those who do business with City Hall pay workers a “fair wage” - meaning near-union wages, vacation and other benefits.

That fair wage policy, monitored by a fair wage office at City Hall, also encourages contractors to hire and train apprentices.

Campbell said social procurement will be broader than the fair wage policy as it will ask contractors to engage in “customized recruitment, training and work-based learning skills development.”

I think it’s rather naive to assume all of these requirements won’t drive up the costs of doing business at City Hall, ones already inflated by the Fair Wage policy.

And in the city report, Campbell and her fellow officials imply that nine pilot projects to diversify the city’s supply chain were pretty much a bust because purchasing staff didn’t know what they needed from diverse suppliers and/or didn’t know any diverse suppliers.

Campbell insisted the pilot was not unsuccessful - that they provided the “learnings(cct)” needed to change and improve the program.

The city’s fair wage policy:

• Designed to create a level playing field in competitions for city work; to enhance the reputation of the city for ethical and fair business dealings; to compromise between wage differentials of organized and non-unionized labour

• Covers construction sectors (e.g., roads, watermains, building, etc.) and other services such as purchase of garments, security, cleaning services, clerical.

• Fair wage rates do not apply to small businesses, partnerships or principals of companies as long as they undertake the work themselves.

• Ensures contractors doing work for the city pay workers union rates, or if not unionized, going wages and benefits in their field, and stipulates working conditions.

• City’s Fair Wage office investigates complaints related to contractors not paying workers prescribed hourly rates, vacation and holiday pay.