Provinces ponder life after Merx

Controversy over the government’s decision to extend its contract with Merx has led provinces to plan their own electronic tendering services.

The Quebec government’s Secrétariat

du Conseil du Trésor said it has signed an agreement with Montreal-based CGI worth $18.9 million to develop a system that will be available to all its departments and agencies, as well as education, health, social services and municipal networks. Alberta, meanwhile, has released a tender to create a similar site while a Saskachewan e-tendering system is already in the works.

Merx has had a stronghold on the government’s tendering business since its initial contract was signed in 1997. That three-year agreement allowed for a two-year extension which ended last year. The federal government had said in 2000 that it would examine options for a replacement to Merx, but its failure to do so led it to renegotiate with the Bank of Montreal, which owned Merx. As a result, the Merx contract was extended for another two years, until June 2004.

The decision’s fallout included a complaint by Tendering Publications Ltd. of St. John’s, Nfld., to the Canadian International Trade Tribunal (CITT), and the decision by provinces like Quebec to create their own alternatives.

“”It’s not a problem of Merx; it’s a problem of the provinces and the federal government agreeing to have one system,”” said Jacques LaFrance, assistant deputy minister at the Secrétariat du Conseil du Trésor. “”We didn’t make an agreement after two years of discussing (it). Why should we wait again? In June 2004, we don’t know if we’ll have a system.””

Hart North, president of Tendering Publications Ltd. (or BIDS, as its system is known), said the reasons behind the delays over the tendering system issue are hard to pin down.

“”I don’t know what happened,”” he said. “”(The discusssions) got derailed. They kept delaying, delaying, delaying . . . the federal government said, ‘We didn’t have time to go through it,’ and the Bank of Montreal said ‘It’s a two-year extension or nothing.'””

The CITT ruled that the extension of the Merx contract violated Canada’s obligations under the North American Free Trade Agreement. In response, the federal government issued a new tender for a Merx alternative the second week of January.

In the meantime, the Bank of Montreal sold Merx to Montreal-based Mediagrif Interactive Technologies, also in Montreal. Denis Gadbois, the firm’s president, said the Quebec government’s decision will put local suppliers at a disadvantage.

“”We are going from a one-window, see-all system and we’re going to a point where we’re going to have segmented information,”” he said. “”There will surely be an increase in costs for Quebec-based companies. Today they’re paying a one-time fee to Merx and they have access to federal and all provincial government RFPs.””

LaFrance disagreed, insisting that the province has made clear in its contract with CGI that its tendering system will have to be interoperable with other systems.

“”If we look at our price, I would say that the supplier who uses the CGI system will pay less money,”” he said.

Claude Marcoux, senior vice-president responsible for the Quebec unit, CGI, said the integrator will be focusing on simplicity of use as it develops the provincial system. He also said he expects other provinces to weigh their options as the June 2004 date gets closer.

“”I’m sure that they will come again to the market and see what is the best platform to use,”” he said.

While CGI will act as the project leader on the Quebec tendering system, it has partnered with Cactus Internet to create it. The Mouvement des caisses Desjardins du Québec will allow users access to its online electronic payment solutions, the company said.

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