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An unclear waiver

Thursday, January 28, 2021

Discretion is important in decision making but criteria can assist how it is used.

Ricki was concerned that the District of 100 Mile House had not followed its Purchasing Policy in awarding a forestry contract. As a forester who lives in the area, she would have liked to have had the opportunity to bid on the contract, but the opportunity wasn’t advertised.

Feeling that the process followed was unfair, Ricki contacted us.

We investigated whether the District followed a fair process in awarding the contract.

At the outset of our investigation, the District acknowledged that its Purchasing Policy was not followed in this case because of council’s direction to waive it. The decision to retain the current contractor was not made by means of a formal resolution. The District acknowledged that this was regrettable. While we appreciated the District’s willingness to acknowledge its error, our review of the Purchasing Policy also raised concerns about the scope of the discretion to waive the policy’s requirement of a competitive process. The District’s Manual gave council the broad discretion to authorize a direct purchase in any circumstance they considered appropriate. There did not appear to be direction to assist in determining what “appropriate” factors should be considered.

One of the purposes of a purchasing policy is to ensure that local governments can effectively budget for required service expenses. The general statement of the District’s Policy and Procedures Manual indicates that services will be selected based on the best interest of the District. While price is not the only factor, it is an important factor in managing the District budget.

We also reviewed the purchasing policies of comparable local governments of a similar size to the District and found that those procurement policies did not have the same broad discretion for exclusions. We were concerned that the District’s Purchasing Policy did not establish clear parameters to waive the District’s requirement of a competitive process. As such, we asked the District to revise the Policy and Procedures Manual to include the types of circumstances that would be considered appropriate for exemptions.

The District agreed and the Purchasing Policy was forwarded to its legal counsel to prepare clear and understandable parameters around the council’s ability to exercise its discretion in this area. Based on the council’s update of the Purchasing Policy, we considered the fairness issues identified to be resolved and we closed our investigation.

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