The Interim Measures, effective March 18, 2019, were released by the Ontario Government to centralize the Ontario Public Service and broader public sector (“BPS”) purchasing and supply chains. It is part of the government’s plan to transition to a centralized procurement model and is applicable to hospitals, school boards, universities, colleges and post-secondary institutions, children’s aid societies and shared services organization/group purchasing organizations.

This blog focuses on the impact of the Interim Measures on BPS organizations, based on information available to us.

What are the Interim Measures?  

New procurements of goods and services valued at $25,000 or higher are subject to the Interim Measures, which request BPS organizations to use an existing Vendor of Record (“VOR”) arrangement where possible and appropriate; and ensure all new contracts have a term not exceeding two years, including any extensions. “New procurement” is broadly defined and includes any new RF[X], new limited tendering, new piggyback or extension of any existing contract beyond the current term.

Does your organization have to comply with the Interim Measures?

Funding ministries will inform BPS organizations on whether compliance with the Interim Measures is mandatory or voluntary. In order for it to be mandatory, there must be a legislative authority for the funding ministry to provide direction to the BPS organization – and the funding ministry must clearly exercise that legislation authority. For voluntary compliance, there is either no legislative authority available or legislative authority has not been exercised.

So, how will your organization know if compliance with the Interim Measures is mandatory or not? You will have to ask yourself the following questions:

  • What does your cover letter from the funding ministry say?
    • Check the cover letter and materials provided by your funding ministry to see if it explicitly states whether the requirements are mandatory or voluntary. The covering letter may state that compliance is expected as opposed to required.
    • Does the cover letter refer to any legislative authority to issue a directive to your organization?
  • Does your Ministry have legislative authority to provide directive to your organization to comply with the Interim Measures?
    • For example, for hospitals, the Interim Measures are not mandatory as the Ministry of Health and Long-Term Care does not have the legislative authority to issue procurement directives to the hospitals. Only the Management Board of Cabinet has the authority under the Broader Public Sector Accountability Act.

So, if compliance is voluntary, what does that mean for your organization? Even if the Interim Measures are voluntary, we recommend that BPS organizations should try to comply with the Interim Measures where they can in order to demonstrate that they are good “BPS citizens”.  Remember that BPS organizations still have to comply with the BPS Procurement Directive.

If you are unsure about whether your organization has to comply with the Interim Measures, feel free to reach out to DDO’s procurement team:

Kathy O’Brien – kobrien@ddohealthlaw.com

Michael Gleeson – mgleeson@ddohealthlaw.com

Pamela Seto – pseto@ddohealthlaw.com