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Labour shortages and the supply chain crisis pushes Delta to amend its purchasing policy

Previously, council’s approval was required for contract awards over $50,0000, but now that tipping point has increased to anything over $300,000
Delta City Hall
Delta council voted to amend its purchasing policy at the Feb. 14 meeting.

For the remainder of 2022, Delta’s city manager and the director of finance are permitted to give the final say on contract awards up to $300,000 – a big change compared to the city’s previous policy of needing council to approve any awards greater than $50,000.

The intent is to “streamline the city’s procurement process to ensure best value during an extended period of global supply constraints and labour shortages,” reads the report from Delta’s finance department.

“I think it’s a long time coming, and it’s very prudent in the times that we’re in currently,” said Coun. Dan Copeland during the Feb. 14 council meeting, where council approved the amendment.

This amendment to the city’s purchasing policy applies to expenditures in the council-approved financial plan and requires that the city manager and director of finance provide council with regular reports detailing the contract approved under their authority.

“Because of the time required for internal approvals and posting of agendas, the council approval process often results in a four-week delay between the close of the procurement process and award of the contract,” reads the staff report.

And because suppliers are finding that costs of materials and labour can change between the bid process and the ultimate award of a contract, “there is an advantage to streamlining the process to ensure that contracts are awarded as soon as possible after a competition.”

The existing purchasing policy was established in 2006, but this amendment is intended to allow the city to adapt to supply chain challenges and a very challenging market environment.

Compared to other cities in the Lower Mainland’s council approval policies, the City of Delta’s 2022 tipping point of $300,000 is still considerably lower than most.

For example, Burnaby only requires council’s approval for expenditures greater than $1 million and Surrey requires council’s approval on expenditures greater than $500,000.

Others, like Coquitlam, North Vancouver, New Westminster, Port Coquitlam, Port Moody, West Vancouver and the Township of Langley do not require council approval at all if the expenditure is in the approved financial plan.

Had this amendment be put into place for Delta council in 2021, council would have only approved 25 of the 110 contract awards they saw last year.

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