1. Local Procurement Global Insights into Challenges and Opportunities February 21, Presented by: Bruce Marsh

2. Bruce Marsh
25+ years business and supply chain management experience – consulting and industry
Have worked on over 50 procurement and supply chain projects, from strategy development to process design, technology selection, and implementation
Have worked with YG Highways & Public Works on various projects since mid-2015
Frequent speaker/instructor on Procurement and related topics

3. Project Mandate
To look outside of the Yukon to see what other public sector bodies are doing about Local Procurement

4. Key Research Sources Talked with Procurement Leaders from: BC
Northwest Territories
Nova Scotia
P.E.I.
Canada

5. Key Research Sources
Detailed review of publicly available information, including reports; studies; policy papers; and websites, with a focus on the UK, Australia, the US, and Canada

6. Today’s Session What is Local Procurement?
Benefits of Local Procurement
Procurement
Global Insights
Challenges and Opportunities
Conclusions

7. What is “Local Procurement”?
Local starts with a geographical boundary – province or territory; municipality; community; etc.
Some businesses are “more local” than others - % of business activity, infrastructure, and employees that are locally based
Buying local is a strategy and set of tactics aimed at increasing the flow of business to local suppliers and keeping the dollars local

8. Benefits of Local Procurement
The research strongly supports the idea that Local Procurement has a positive economic impact (and potentially social) within the region – assuming the dollars stay “inside the bucket”.
“Leaky Bucket” Economics

9. Public Sector Procurement is going through transformational change
Streamlining policies and processes;
Enhancing access to procurement opportunities for Small & Medium Enterprises (SME’s)
Adopting value criteria and focusing more on buying solutions; and
Leveraging public procurement to achieve positive economic, social, and environmental benefits
Public Sector Procurement is going through transformational change

10. Sustainable Procurement
“buying goods and services in a way that not only achieves value for money for the organization, but also generates benefits to the economy and society, while protecting the environment”
Economic
Social
Environment

11. Innovation
Supporting local business in developing new technologies, products, and services that will be of value to not only local government, but potentially also to other jurisdictions across Canada and abroad.

12. Global Insights - US
“at least 45 states have procurement policies designed to give a preference to businesses that meet certain characteristics, such as those owned by veterans, pay certain wages, use environmentally sustainable practices, or manufacture within the state”
Institute for Local Self-Reliance (ILSR)

13. Global Insights - UK Key observations and learnings from the UK:
Initiatives focused on supporting SME’s
Use of Community Benefit Agreements (CBA’s)
Overall focus on Social Procurement
Ongoing effort to navigate trade agreement restrictions
Enhancing public sector procurement effectiveness

14. Global Insights - Australia
Government of Western Australia – Local Procurement Policy
“Local businesses employing local people, creating new skills and generating economic growth in servicing the Western Australian Government’s requirements”
Supporting Local Procurement –
Setting “local content” as a significant selection criteria for awarding business; and
Utilizing price preferences based on both geographic location and content

15. Local Insights - Canada
Procurement transformation is well underway
Policy; technology; practices; organization
Social/Sustainable procurement is becoming increasingly relevant and a factor in awarding business
Social Procurement Guidelines (BC); Community Engagement (NWT)
Juggling trade agreements and Local Procurement is an ongoing issue
Work is well underway to make it easier for SME’s to compete
Moving to a greater emphasis on value over price as award criteria

16. Challenges and Opportunities
Lack of a Local Procurement Strategy
Define what “Local” means
Set targets for Local Procurement - $’s and sectors
Select the tools and tactics that will work best within the unique local environment
Ensure sufficient resources in place to drive the strategy
Measure and report on progress

17. Challenges and Opportunities
Navigating the Agreement on Internal Trade (AIT)
Fully leverage below-threshold procurement
Appropriately unbundle large contracts/projects
Support and enable local businesses to provide competitive responses to tenders
Add social/community benefit requirements to tenders
Base procurement strategies on a deep understanding of the AIT

18. Challenges and Opportunities
Supplier-Side Challenges
Reluctance to respond to public tenders
Too complex
Low chance of success
Not enough time to respond
Not enough capacity or the right set of capabilities
Lack of time/incentive to expand internally, or to partner with other suppliers

19. Challenges and Opportunities
Buyer-Side Challenges
Lack of resource capacity and/or capability to develop and execute a Local Procurement strategy
A continued focus on price over value

20. Conclusions
Local Procurement is an evolving trend, wrapped up with social and sustainable procurement, and other transformational changes
Local Procurement delivers local benefit – economic and social
Success with Local Procurement requires efforts from both buyers and suppliers
Local Procurement can coexist with trade agreements – but effort and innovation is required
Local Procurement requires a degree of sophistication and expertise to achieve, as many tool and approaches are available

21. Questions?