Ontario IT sector revamps procurement terms

A much-needed overhaul to provincial government guidelines surrounding technology vendor procurement contracts may do away with an often convoluted and frustrating negotiation process.

The government of Ontario will start using new terms and conditions for small, low-risk technology contracts that are intended to reduce the time required to arrive at a contract agreement, increase vendor participation and produce better vendor pricing due to increased competition.

The government wanted to ensure that those vendors who wanted to participate were able to, said Neil Sentance, assistant deputy minister for the supply chain management division with Ontario Shared Services in the Ministry of Government Services.

“It is in our interest to be as open as possible to the vendor community and wanted to make sure that the contract terms and conditions didn’t create inordinate or inappropriate barriers to participation,” he said.

The guideline facelift was the result of collaboration, over the past 14 months, with the IT industry, via the Information Technology Association of Canada (ITAC), a Toronto, Ont.-based organization that champions initiatives pertaining to the IT industry.

ITAC approached the provincial government wanting to address terms and conditions in contracts that it felt were “potentially troubling the industry” said Sentance, specifically those arising from changes in the U.S. around Sarbanes-Oxley and various other regulatory changes impacting vendors’ handling of risk.

Specifically, he said, the changes pertained to the clarification of the contract language; and amendments to policy, including those that vendors were complaining had been difficult to implement.

Other affected policies included intellectual property, limitation of liability, and user acceptance testing.

Part of the revamp entailed removing certain time-consuming terms and conditions that were not likely to have practical application anyway, “yet for the bidders they make life so complicated that some of them refuse to bid or have to try and factor in the extra risk,” said Bernard Courtois, president and CEO of ITAC.

The initiative was borne out of recommendations by the Special Task Force on large-scale government information and IT projects to make IT initiatives more effectively managed.

If this initiative is successful, it could very well be extrapolated to other types of contracts besides small, low-risk ones, said Courtois. “The idea is that the rationale behind these changes is universal. We provide the government with more open, competitive bidding. So the same rationale will still apply.”

Sentance agreed, saying the government wanted to be sure of what it was doing by starting small: “We wanted to first of all walk before we ran… and make sure we achieve the level of standardization, we wanted to identify a discrete bucket of contracts where we could make these changes, roll them out, review how they were being received in the market, and assess the success of greater vendor participation and faster time to contracting than we’d experienced before.”

Better yet, other beneficiaries of the revamp may be governments at other levels and jurisdictions, said Sentance.

Private corporations could also make use of these government best practices, said Courtois, especially given they, like government, are prone to complex processes surrounding procurement contracts.

“There a lot of commonalities—organizations are complex… but at the end, they all realize that you’ve got to be careful not to have everyone waste too much energy in the procurement process,” said Courtois.

In fact, there was a mutual education during discussions between government and members of the IT industry, said Sentance, in that similarities between the needs of government and enterprises around procurement contracts emerged.

“I understood that with the change in accounting and disclosure, that [corporations] were facing some of the same accountability and transparency issues that governments and public sector entities have been living with for a very long time,” he said.

Courtois said IT vendors and the provincial government will evaluate the guideline changes and continue to revise other parts of the procurement process if need be.

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Jim Love, Chief Content Officer, IT World Canada

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