Thank you, Mr. Chairman.
I would like to mention that my office did take advantage of the Public Works offer to hold a seminar for our local provider-suppliers on how to use MERX and how to navigate the system. It was received very well and the follow-up was good.
At about the same time as we had the seminar, there was this problem that was just emerging with the new master standing offers. I believe that's how they're referred to. It may be the same thing as Madam Bourgeois was speaking about when she called it grouping. Our people were calling it bundling.
Apparently this started as a consequence of the ad scam and was former Prime Minister Martin's solution to being more transparent. It's something that's come from a previous administration. The idea was to bundle these contracts or standing offers to make it more efficient; you're processing fewer tenders and therefore it's supposedly less work.
The example I'm going to refer to is for the supply of hardware to government offices and agencies and military bases in Ontario. In this case, the stakeholders were not consulted and the so-called competitive process was highly flawed.
First, the existing suppliers throughout Ontario had been checking MERX towards the end of their contracts and found nothing. It had been the common practice when Public Works was busy with other tenders that they would just extend their contracts for another couple of months. They thought that was the case in this instance, but days before their actual contracts were to expire, they were told by the military bases themselves, by the officers who did the purchasing, that they could deal with them for only a few more days because their contracts would end, which came as a shock to all these suppliers because they thought they were going to be renewed for another couple of months.
There had been no notice whatsoever from Public Works prior to their being told by the purchasers that they weren't allowed to deal with them anymore and that they were going to this new master standing offer system. They had to go through several contacts in Public Works until they finally found the person who was responsible for the tender. They found that they were completely cut out of this round for the next year or so because the MERX process had already happened.
But when this master standing offer was posted on MERX, which in the usual way was done region by region, the local suppliers looked for their region, because they might be supplying a hub of a 100-mile radius, not all of Ontario, as they just don't have that distribution to supply all of Ontario, and they didn't see their regions listed. In this case, it just said “all of Ontario”, and they didn't tune in that they had to apply there, so they were completely cut out of competing for their existing contracts.
The businesses were out of the tendering process there. It turned out that a company located in Concord won the tender. Before a year had passed, they got to the point where they could not fulfill the obligations, so there were some purchases being made at a local level.
What this demonstrates is that the bundling or the master contract system does not necessarily serve our government departments well, nor does it support our small and medium-sized businesses, which supply 95% of the jobs in Canada and are our incubators for the businesses of the future. Especially in this economic climate, when we see giant companies folding, if we put all our purchasing into just a few companies or one company, we stand to lose our entire supply chain. As Mr. Chairman mentioned, that's deadlier than any attack on supply chains during World War II. We've just set ourselves up for failure.
It wasn't just the furniture or the hardware. This also applies to auto parts. It applies to oil, looking at the same contract, and you can't convince anyone that to buy a doorknob from 500 miles away is more economical or timely--heaven forbid there has to be a return with buying it 500 miles away--as opposed to buying it from five kilometres down the road.
We want you to take this into consideration, that as a consequence of having to administer and adjudicate fewer tenders, one would think that the whole process was streamlined and that Public Works would start moving faster on tenders and needs. But we're finding out that there's not necessarily an increased movement.