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Single sourcing is a hard sell
Lisa Wichmann
Controversy around single sourcing is cropping up again in public
procurement circles—this time in Atlantic Canada. The case, involving
Atlantic Lottery, raises the question of whether single sourcing is a
justifiable practice in public buying.
Private sector buyers are also taking notice, because of the organized and efficient way the unhappy supplier is going about calling attention to the situation.
Namely, it’s developed a web site called Lottofairness.ca to call Atlantic Lottery to task.
At issue is a contract awarded to a Swedish company, Boss Media for an Internet bingo system. Atlantic Lottery announced the contract—initially pegged at $1 million with opportunity for profit sharing—on October 2.
But Lottofairness alleges Boss Media announced the contract 237 days before that, implying the deal was done way before Atlantic Lottery got around to making it public.
Lottofairness was founded by the CEO of a Canadian company called
Parlay Entertainment, an Internet bingo company in Oakville, Ont. The site was launched after Parlay tried unsuccessfully for six months to get answers to a few questions:
• Was the procurement opportunity advertised on Atlantic Lottery’s web site
in accordance with policy?
• When was Boss Media actually selected for the iBingo system?
• When did Atlantic Lottery begin discussions with Boss Media?
• Did the discussions or proposed award arise out of any business or personal
relationships between Boss Media personnel and Atlantic Lottery prior
to contract discussions?
Atlantic Lottery’s October release stated the contract was awarded to Boss Media in February 2007, and announced by Boss Media in May 2007. It said its procurement policy allows for single sourcing in cases where there are “strong business reasons.”
Even so, the organization’s policies generally require a minimum of three quotes for acquisitions of goods and services over $5,000; and public advertisement for contracts over $25,000.
Other public agencies have similar language to allow them to single source in special cases. But in the current climate of accountability and transparency, the practice is losing favour among suppliers and taxpayers.
We definitely need to see more specific and restrictive guidelines for single sourcing in the public sector. As it stands now, “strong business reasons,” could mean just about anything.
When taxpayer dollars are being spent, public agencies have a duty—either written or implied—to do competitive quotes on large contracts. It requires more time, and more interfacing with the supplier community (ironically, opening up more opportunity for litigation), but it’s the only acceptable course of action.
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