Associate Guest Post by Rusty Joerin of Woodsgift Enterprises
Buying from local goods and services suppliers has many advantages, politically and economically. Senior Government legislation has mandated that public sector organizations must publically tender most procurement and not exclude suppliers from across Canada based on geographic location. We (too) often hear examples of tender awards to “out of town” vendors offering goods and services a little bit cheaper than the “local” supplier where all other factors are equal.
Or were all other factors considered? Let’s explore this sensitive issue.
Sr. Government Legislation – Agreement on Internal Trade (AIT) and New West Partnership Agreement (NWPA) are intended to reduce interprovincial trade barriers and enhance competiveness. Legislative goals are articulated and can be read here: http://www.newwestpartnershiptrade.ca/pdf/NewWestPartnershipTradeAgreement.pdf
School Districts, Post-Secondary Institutions and Municipalities have deep roots in their local economies and social networks. It’s a tough call to award business to “away” supplier when “local” supplier is equally competent but a bit more expensive.
Competition, however, is a good thing. If local supplier is complacent, away supplier will take their business. Local supplier can also expand its market by bidding goods and services in away supplier’s trading area.
The request to supply document will determine the process for selecting which supplier your organization will contract with. The tendering organization can state legitimate criteria (to the goods or services requested) additional to price for consideration when evaluating responses to their supply requests. The relative weighting of each criterion must be disclosed and the evaluation process should be quantifiable and defensible. Public sector buyers are often required to demonstrate that they are obtaining the best value from their selected suppliers to both taxpayers and losing bidders.
The development of a 100 km supply chain will require careful procurement planning, knowledge of the local marketplace and may be assisted through the provision of supplier development workshops. While not everything can be locally sourced, local suppliers of many goods and services can be every bit as competitive as the away suppliers when all legitimate factors are considered in the supplier selection process.
Rusty James Joerin, SCMP is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply.
Information about his experience and qualifications may be found at:www.woodsgift.com
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