THE SUPPLY CHAIN GUIDELINE

Strategic Procurement Services www.queensu.ca/procurement/index.html

Terms and Definitions

Ontario Government: Provincial government of the province of Ontario, whose powers include legislation and control of the budget

Broader Public Sector (BPS): Any organization which receives operational funding from an Ontario Government ministry and is determined to be a major transfer payment recipient, this includes -

•  Municipalities; •  Academic Institutions i.e. - every university in Ontario; every college in

Ontario and every post secondary institution and School Board in Ontario •  Health Care Providers - Hospitals and healthcare facilities

BPS Supply Chain Secretariat: Min. of Finance organization that develops and implements the government’s corporate procurement strategy.

Ontario Buys: is a program of the Ontario Ministry of Finance that provides funding and advice to the province’s broader public sector (BPS) partners — principally, hospitals, school boards, colleges and universities — to help them modernize their supply chains and other back-office processes. …

Introduction

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Terms and Definitions

Supply Chain: refers to the multiple processes that connect customers and suppliers. It is about logistics — getting the right materials to the right people and places at the right time.

Transfer payment agreements: Transfer payments refer to unilateral payments made between various sectors of the economy such, governments, and defined recipients. The recipients are not required to provide any service in return. However, the recipients must fulfill certain conditions to be eligible for the transfer. If the conditions are not met, the payments may decrease or discontinue

Ontario Education Collaborative Marketplace (OECM): has been established, by Ontario Buys, to facilitate group purchasing and introduce an integrated electronic marketplace. Once implemented, savings and productivity gains are expected to exceed $250 million over five years and will be redirected to supplies, equipment and other student needs.

Introduction

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In April 2009, the Ontario Government issued the following direction in the statement to the House on the 2009 Budget :

•  BPS Supply Chain Secretariat issued the Supply Chain Guideline that requires

•  a Procurement Policy & Procedures that have supply chain standards, includes 25 mandatory items

•  a code of ethics and

•  Procurement metrics (delivered to SCS)

to be followed by broader public sector (BPS) institutional transfer payment recipients;

•  Guideline to be incorporated into the transfer payment agreements of education and healthcare institutions receiving more than $10 million per fiscal year, as of April 1, 2009.

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Introduction of the Supply Chain Guideline

March 2010

March 2011

Supply Chain Guideline (SCG)

“Core of the Core” •  Leading Practices •  Metrics •  Standards

Version 1.0 – April 2009 •  Code of Ethics •  Procurement Policies and

Procedures

Version 2.0 – April 2010 •  Expected to be legislated; will

include common documents

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SCG Metrics

Metrics •  The SCG will include core supply chain metrics that BPS

institutions will be required to adopt. •  Expectations as to the nature and timing of adoption will

need to allow for the requirements and starting point of different sectors and institutions.

Currently under Consideration: •  Percentage of Total Spend through GPI •  Percentage of Total Spend Under Contract •  Investment in Education and Skills Development •  Number of Purchase Orders in a Month •  Number of non PO Invoices •  Percentage of Invoices Paid within Due Date •  Dollar Savings as a Percentage of Total Spend •  Average number of Purchase Orders placed per Top Ten Supplier per month •  Percentage of Low Dollar Value Purchase Orders

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SCG Standards

Standards •  The SCG will include core supply chain standards that BPS

institutions will be expected to adopt. •  Expectations as to the nature and timing of adoption will

need to allow for the requirements and starting point of different sectors and institutions.

Currently under Consideration : •  Common Tendering and Contracting •  Segregated Approval and Authority Schedules

•  Contracts Database

•  Supply Chain Information Systems Strategy

•  Low Dollar Value Transactions

•  Customer Survey Tools and Processes

•  Supplier Performance Management •  Job Roles and Specifications

•  Performance Appraisal Process

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Later SCG Versions

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Are expected to include a Balanced Scorecard

THE SUPPLY CHAIN GUIDELINE

Strategic Procurement Services

www.queensu.ca/procurement/index.html

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Hyperlink Definitions

Effective supply chain management is vital for organizations to be successful. Modernizing supply chain management means finding better ways for the public sector to procure the goods and services it needs to continue to serve the citizens of Ontario.

Back-office processes are administrative functions that include: human resources, financial management and budgeting, procurement and payment for purchases

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Requirement # Objective

1 Segregation of Duties

2 Delegation of Authorities

3 RFx for > $100,000

4 RFI is not a pre-qualifier

5 RFSQ Ts & Cs must oblige Use of Supplier

6 RFx must be posted on accessible electronic site

7 RFx minimum response time of 15 days

8 RFx closing date during business days

9 Evaluation criteria before issue and disclosed

10 Disclose evaluation methodology

11 Evaluation team confidentiality & conflict of interest

12 All evaluators must participate & be fair

13 Highest ranked supplier selection – no alternate proposals

14 Tie-break score resolution must be disclosed

15 No discrimination or preferential treatment of suppliers

16 Contract must be executed before service or products received

17 Contract released with RFP & executed

18 Contracts must include Termination clauses

19 Contract term & extensions

20 Awards of contracts >$100,000 must be published

21 All RFx participants entitled to debriefing

22 Documentation requirement for no competitive process

23 Document retention (7 years)

24 Conflict of interest requirement

25 Rfx result protest procedure