Surety Association of Canada Voices Concerns Over New Procurement Strategies in Newfoundland and Labrador
March 7, 2024 – Mississauga, ON – The Surety Association of Canada (SAC) has expressed significant concerns regarding the Department of Transportation and Infrastructure (DTI) of the Government of Newfoundland and Labrador's recent announcement on new procurement strategies designed to support local suppliers and promote sustainability. SAC believes that this policy is misguided and was founded on the basis of information that is inaccurate and in some cases false.
On February 5, 2024, the DTI announced the introduction of two innovative procurement strategies with objectives that include maximizing provincial suppliers' success in obtaining government contracts, fostering supplier development within the province, and enhancing sustainable purchasing practices.
A key element of these strategies involves changes to the use of bid bonds. Bid bonds serve as a financial guarantee from vendors when bidding on projects, ensuring that the bidder remains committed to their bid and provides the required project security if selected. The new strategy proposes a reduction and potential elimination of bid bonds, a move that SAC believes is indicative of a total misunderstanding of bonds and their role in protecting taxpayers and small businesses.
"The assertions regarding bid bonds in the government's statement are not only misleading and inaccurate, but in some cases, patently false," said SAC President & Chief Operating Officer Steven D. Ness. "It's alarming that such inaccuracies and misguided assumptions would lay the groundwork for public policy decisions."
In response, SAC has initiated contact with the DTI and the Honourable John G. Abbott, Minister Responsible for the Public Procurement Agency, to challenge the misinformation surrounding bid bonds and the suretyship process. SAC is urging the government to reconsider this policy direction.
"Our goal is to work with the government to ensure that policies enacted are based on factual information and truly benefit taxpayers and local enterprises," Mr. Ness added. "We are requesting an opportunity to explain the surety products and processes through educational presentations, highlighting their processes and advantages."