“We’re very dismayed that some of the critical changes we were most adamantly against were not changed,” said Chris Coates, a spokesman for the Canadian Government Information Technology Providers Association, which represents some 18 companies that do business with Ottawa.
Public Works & Government Services Canada only “tweaked” regulations it proposed in June for choosing printer suppliers, he said, so the association has decided to lobby cabinet ministers to open the rules.
“Dealing with the public service itself has not got us the desired results, so we’ve got to go to Plan B,” he said.
“We are extremely concerned over (the government’s) continual direction towards reducing the number of suppliers,” he said, which will cut down the number of resellers eligible to fulfill government purchase orders.
France Langlois, a Public Works department spokesman, said officials were in meetings Wednesday and wouldn’t be made available for comment until Thursday.
Resellers’ concern about the new procurement policies may soar higher later this month with the release of new rules for the bidding on PCs, laptops and servers.
Their worry heated up last month when the government proposed cutting the number of printer suppliers for its next National Master Standing Orders (NMSOs) down to two. Approved suppliers on the NMSO list, and their resellers, are the only ones government departments can buy from.
But on Monday, after protests from resellers and vendors, Public Works’ latest printer tender increased the number of possible suppliers to eight, divided into two groups – Group 1 for what are called standard printers and Group 2 for specialized equipment, in which there will be nine sub-categories.
Four suppliers will be designated in Group 1, and four in each of the nine sub-categories of Group 2. However, only two of the four would be active at any time. The other two can bid after six months to become one of the active suppliers for the next six months.
Although the Public Works Web site outlining the changes doesn’t specify, Coates said the two non-active NMSO vendors in each group will bid on contracts in a reverse auction, to which the association objects. Ottawa “is using them as bait” to cut prices, he said.
“The mood of our industry is they (bureaucrats) just aren’t listening.”
The procurement overhaul is part of Public Works goal to cut $2.5 billion in spending over the next five years on everything it buys. Resellers fear they’ll be cut out with fewer suppliers. The Public Works Web site includes this statement: “Regional support and distribution will be required and thus will benefit SMEs who participate as agents and re-sellers.”
The site says the previous NMSO system created a “complex environment and did not result in (the government) obtaining everyday ‘best value’ prices.”
More than 30 sub-categories of printers and over 200 models of printers are being bought, the site said. The new system will reduce the number of printer models the government will buy.
Although 11 vendors had standing offers under the previous system, the site adds, over 90 per cent of purchases were from two manufacturers. Coates, whose company, The Coates Agency, represents vendors doing federal business, said those two vendors are Hewlett-Packard and Lexmark.
Meanwhile Public Works is scheduled to meet with potential PC, notebook and server suppliers in the middle of this month prior to releasing a NMSO for those products.
“We will be really anxious to see (it),” said Coates. “That is a critical one” for Canadian white box manufacturers.
The IT Providers Association — whose members include Xwave, Northern Micro and Hewlett-Packard — isn’t the only one with concerns about Ottawa’s overall procurement changes. On June 28 the Canadian Federation of Independent Business (CFIB), which represents some 105,000 small and mid-sized companies, wrote Public Works minister Michael Fortier to complain its members still feel proposed changes will leave them out.
“From our members’ perspective little concrete action by your department has been taken to increase or even maintain their current business with the federal government,” the letter from executive vice-president Garth Whyte said in part.
It notes technology members of the federation worry that the government’s focus on price with “no regard for value-added services . . . “tends to favour offshore companies and makes it very difficult for small, local firms to compete.”
The federation noted the government’s new Offices of Small and Medium Enterprises, which are supposed to open across the country to help SMEs do business with Ottawa, have been “slow to get going.”
The letter demands to know exactly how the new procurement policies being implemented will provide easier access to SMEs, and in particular how firms offering technology products and services, staffing services and office supplies will be helped.
“CFIB has been an active participant in recent consultations and we have built a solid relationship with your department,” Whyte wrote. “However these recent concerns expressed by our members seem contrary to the discussions we have had in the past and we would like to know why such a dramatic change in direction seems to have occurred.”