Volume #27 - 438.|
RELATIONS WITH INDIVIDUAL COUNTRIES
GOVERNMENT PURCHASING POLICY
Memorandum from Minister of Finance|
CABINET DOCUMENT NO. 60-60|
February 23, 1960|
MEETINGS TO DISCUSS GOVERNMENT PURCHASING PROCEDURES|
1. As directed by Cabinet on July 2, 1959, meetings were held on January 28 and 29, 1960, in Ottawa, of senior officials of the main purchasing departments and agencies of government under the chairmanship of the Deputy Minister of Finance
(i) to investigate United Kingdom claims that United Kingdom suppliers were encountering such problems as lack of direct access to departments, tender periods too short to submit bids, delivery uncertainties and specification difficulties;
(ii) if claims were substantiated, to consider ways and means to improve the situation for United Kingdom suppliers; and
(iii) to bring such ways and means to the attention of the departments and agencies directly involved with government purchasing.
2. The United Kingdom High Commissioner was invited to participate in the meeting of January 29, and did so, together with two members of his staff.
3. It was clearly understood by all attending these meetings that the Canadian Government was not contemplating establishing new preferential arrangements for United Kingdom suppliers. It was made clear that the main purpose was to consider whether any adjustments could and should be made in purchasing procedures should it be found that these tend to put overseas suppliers at a disadvantage in relation to United States suppliers. The discussions related to civil purchases as opposed to defence procurement (where special considerations apply).
4. The United Kingdom representatives submitted three main suggestions for consideration which, in their opinion, would help improve the sales prospects of United Kingdom suppliers:
(i) It would be helpful if the Canadian Government through its senior officials could impress upon all procurement officers the importance of being aware of the United Kingdom as a source of supply.
(ii) As the timetable for tendering on Canadian Government contracts was sometimes very difficult for United Kingdom suppliers to meet, it would be a great help if the period allowed United Kingdom firms for preparing bids could be increased by two weeks in instances where much detailed work in preparing bids was necessary.
(iii) It would lessen the difficulties of United Kingdom exporters if, where United States specifications are stipulated or implied, an equivalent United Kingdom specification could also be given wherever possible and if the United Kingdom specification could be judged on its own merits and not in relation to specifications previously supplied or currently offered by competitive bidders.
5. The Canadian Government participants on the basis of their own experience also offered suggestions which, if adopted, might help stimulate interest in, and result in more sales of, United Kingdom products. Their suggestions may be summarized as follows:
(i) Canadian Government departments would welcome more literature in the form of catalogues, trade journals, etc., to improve the familiarity of those responsible for ordering technical, scientific or electrical equipment.
(ii) It would be desirable if the United Kingdom could take advantage of putting sample technical equipment on display at appropriate times and places so that potential Canadian users could see what was available.
(iii) More contacts might be made between British suppliers and scientists and technicians working in Canadian Government establishments.
(iv) While there has been improvement in recent years, there are still too many instances of failure to meet agreed delivery dates. This is a matter of particular importance in supplies destined for use in northern Canada because of the limited shipping facilities and short shipping season. Cases were also cited of inefficient or careless packaging of shipment from the United Kingdom.
(v) There was still room for improvement in giving after sales service. Considerable improvement had been noted but there was still some distance to go before reaching Canadian and United States standards. There was a particular need for salesmen who were qualified to carry out servicing or to make adjustments in machinery or equipment upon installation and afterwards. The need for maintaining readily accessible supplies of spare parts was also stressed.
(vi) It was desirable for United Kingdom suppliers to accept Canadian Government payment procedures, as this would help to avert unnecessary delays in receiving goods. Cases were cited of British suppliers shipping goods on a 'cash against documents' basis.
(vii) On the question of accepting United Kingdom inspection of goods, it was noted that some Government departments and agencies do accept such inspection; there might be others where a more flexible approach could be taken.
(viii) The United Kingdom representatives were of the opinion that purchasing officers sometimes invited tenders from United Kingdom firms solely for the purpose of keeping down Canadian prices. The Canadian officials were agreed that any such practice would be unethical and unfair, and all those present would undertake to guard against such practice.
(ix) It was considered desirable for United Kingdom manufacturers to study Canadian conditions with a view to adapting their designs to meet those conditions. Winter weather conditions in particular should be noted.
(x) On the subject of the representation of United Kingdom firms in Canada, it was noted that some firms were placing their representation in the hands of agents for competitors; this did not appear to be a very satisfactory arrangement.
6. From the remarks and comments made by the Canadian participants on the three main points put forward by the United Kingdom representatives, it was apparent that:
(i) Senior purchasing officials realized the interest of Ministers in this subject and that they would impress upon all their subordinate officials directly involved in initiating purchases the importance of keeping the United Kingdom in mind when considering possible sources of supply.
(ii) There were a variety of practices followed by Government departments and agencies in setting the time allowed for submitting tenders but it was felt that these practices permitted reasonable flexibility; the possibility of granting more flexibility in particular instances could be considered. However, it was not thought desirable to adopt the United Kingdom suggestion of a general change in the time permitted for tenders. The present procedures had been designed to meet the particular requirements of the departments concerned; this must remain the main consideration.
(iii) There was a considerable diversity in the designation of standards and specifications. Sometimes detailed specifications were written; and sometimes specifications were designated by reference to some recognized standard as some departments had neither the time nor the capacity to write full detailed specifications for all items needed. The practice of referring to United States products by name was sometimes followed but in nearly all such instances the expression "or equivalent" was used. The United Kingdom had suggested that a United Kingdom product might be named sometimes. In reply it was pointed out that as a general rule Canadians were simply not familiar enough with United Kingdom products in a number of fields. Over time, however, a greater familiarity with United Kingdom equipment would develop and it should become possible more often to name specific items of United Kingdom manufacture.
7. In conclusion, it was agreed that:
(i) The United Kingdom's trade representatives would follow up with the individual departments and agencies the various suggestions (as summarized in paragraph 5 above) which emerged during the meeting.
(ii) The United Kingdom trade representatives would be responsible for following up this meeting, if they wished, with similar meetings at the provincial government level but it would not be appropriate for the Canadian Government to approach the provinces on this subject.
(iii) No publicity would be given to these meetings.
Donald M. Fleming