muniBLOG: Legal

Does Insurance Need to be Publicly Tendered?

We recently heard about a debate among certain public sector organizations on whether the trade agreements apply to the procurement of insurance. To help clarify things, we decided to answer this question.

In this blog post we only examine whether the Canadian Free Trade Agreement (CFTA) and the Canada-EU Trade Agreement (CETA) apply as they are trade agreements that apply to most Canadian municipalities. To be 100% sure about whether insurance has to be tendered, municipalities should also check their local rules.

When must a procurement be publicly tendered under CFTA and CETA?

The CFTA and CETA trade agreements apply to Canadian municipalities when:

    • The municipality is included in the trade agreement
    • The good or service is included in the trade agreement
    • The dollar value of the final contract is:
      o 105,700 or greater for goods or services and 264,200 or greater for construction (CFTA)
      o 366,200 for goods/services and 9,100,000 for construction (CETA)

Must the purchase of insurance be publicly tendered under CFTA and CETA?

No. Insurance is not subject to either CFTA or CETA as of the date of this blog post.

CFTA, at Chapter 13, defines the term “financial service” to include a variety of financial services, including insurance. The CFTA, Article 504(11)(h), stipulates that the procuring of a “financial service” is exempted where it is in respect of managing government financial assets and liabilities, including any ancillary and information services. Since insurance is a tool used to manage public assets and liabilities, it is therefore exempted from the application of the CFTA.

CETA applies only to the specific services listed in Annex 19-5. Services are denoted by their Central Product Classification (CPC) code. The CPC codes for insurance and insurance services are not listed in Annex 19-5. As such, insurance is not captured by the CETA.

Regional Note for Western Canada Municipalities — Although CFTA and CETA exempt insurance and related services, entities in Manitoba, Saskatchewan, Alberta and BC may be under an obligation to tender their insurance requirements under the regional New West Trade Partnership Agreement (NWTPA), which does not explicitly exempt financial services. To be sure, we recommend municipalities consult with their legal counsel or a procurement professional.

Are the ancillary services, such as brokerage and insurance advisory services also exempt?

Yes, services ancillary to insurance are excluded.

Under CFTA, the services provided by insurance brokers, which are by their very nature services ancillary to insurance, are exempted.

As for CETA, the omission of the CPC codes for insurance and related services is sufficient to conclude that brokerage services are excluded from CETA.

Even if insurance exempted from the public tendering requirements, should municipalities tender their insurance requirements?

We think so, particularly if the municipality has never put its insurance requirements out to tender before.

In our experience, all brokers are not created equal. Some are well equipped to provide insurance and risk advisory services while others, not so much.

Municipalities are best served by brokers with experience in the municipal sector who are well-positioned to advise municipalities on available insurance products and who are well positioned to find the best coverage possible for given risks. Tendering your insurance requirements using a RFP that, among other things, evaluates broker capacity and experience, that qualitatively ensures you’re accessing the best brokers and advisors, is a great way to ensure the municipality is getting the best advice and value available for the dollars spent.  Tendering may take a bit more upfront time and effort but the dividends should pay off in the long term.

Lise Patry is a business and public procurement lawyer working out of Ottawa. She co-founded LXM LAW LLP in 2020 to help municipalities with their procurement and contracting legal needs. LXM LAW’s team includes both experienced municipal procurement consultants and lawyers. Lise can be reached at [email protected] or by phone at 613-601-6333. (Special thanks to Daniel Ebady, articling student, for his assistance with this blog post.)

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

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An Artist’s Eye to Risk & Security Program Success

 

 

Michelangelo famously created the sculpture David and JK Rowling famously revealed characters that already existed. Two completely different types of artists and art.

But how did Michelangelo actually approach this masterpiece? Did he take a stone and begin to carve, and David was eventually the result, or did he know that David was already in the stone and he had to carve away the waste to reveal him? JK Rowling did the latter.

Which approach applies to your organization?

Do you work to reveal the security practices that are already intuitively imbedded by hard working staff doing the right thing and expand on these, or realize that you need to start fresh and create something new?

Let us take a look. Your organization is well established. Many operational and strategic programs and processes are in place. But your now are faced with ramping up your security program. Create policies, procedures, establish the

With both approaches your personnel, all personnel, security or otherwise play the most significant part in the immediate and continued success of your Risk & Security program.

At a high level view, your Risk & Security program has 3 major components;

  1. Plans/Procedures: you need purpose, direction, and accountability
  2. Hard/Soft tools: software, hardware, technical systems…such as cameras, card access, etc.
  3. And the third piece that actually holds it all together and makes it work, people (personnel).

Of course, while the various plans/procedure, technical systems and devices assist in the assurance of security – it all ultimately boils down to personnel.

But they don’t just get there on their own.

There needs to be a commitment within your program to educate, cooperate, and involve personnel to be successful.

Not sure where to begin? We can help.

It all starts with a conversation.

Plan the Work. Work the Plan.

Should your Municipality need assistance, contact Michael White Group today, and we will be happy to answer your questions or provide quotations.

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Municipal Procurement Goes International!

In 2017, the introduction of the Canada EU Trade Agreement (CETA) suddenly shined a new spotlight on municipal procurement, thrusting it onto the international stage. For the first time ever, municipalities were forced to open up procurement opportunities to international suppliers. Almost concurrently, Canada updated its domestic trade agreement, the Canadian Free Trade Agreement (CFTA), modeled on the CETA. Together, these agreements represent a major paradigm shift for municipal procurement, with some notable impacts as discussed below.

Trade Agreements Regulate Municipal Procurement. Before 2017, Canadian municipalities were generally expected to adopt procurement rules ensuring openness, fairness and value for money. The impact of the new 2017 trade agreements was that, for the first time, municipalities were now required to comply with detailed procurement processes and procedures. The trade agreements cover a full range of new requirements including:
• posting tender notices online
• specific information to include in tender notices
• permitted types of procurements (e.g. open, direct)
• how to handle receipt of bids
• the do’s and don’ts of drafting solicitation documents
• the award of contracts
• posting notices of contract awards and
• bidder barring rules.

Increased Liability Exposure – New supplier rights and remedies. Before 2017, it was almost impossible for disgruntled suppliers to complain about trade agreement violations under Canada’s national trade agreement. The 2017 agreements have introduced new rights and remedies for suppliers, including the rights to:
• a debriefing when they are unsuccessful in a procurement process;
• file a complaint that now must be addressed by the procuring entity – can’t be ignored;
• to submit legal challenges to a federal/provincial/territorial bid dispute panel.

Single Portal Access to all Canadian procurement opportunities. Currently municipalities use all sorts of online portals to publish their opportunities, making access to contract opportunities challenging for suppliers. In the 2017 agreements, the federal government committed to establishing a single online portal by 2022 so that suppliers have one point of entry for all Canadian contract opportunities. Once implemented, this portal will undoubtedly expose municipal procurements to an exponentially greater number of suppliers, further shining the light on municipal procurement practices.

The Municipal Procurement Experience Under CFTA/CETA After 3 Years
It’s hard to conclude the trade agreements had a major impact on municipalities. While anecdotal evidence suggests municipalities have shored up procurement bylaws, policies and procedures, we’ve seen few challenges to municipal procurements under the new trade agreements. This could suggest the supplier community is not paying close attention to the changed landscape and that perhaps it hasn’t caught on to new supplier rights and remedies. And what about Canada’s promised single access portal by 2022? It appears the federal government is working on it. A 2018 Ernst & Young LLP/SAP press release announcing a contract award to develop the portal stated: Provincial and municipal organizations will… be offered an option to use this new platform to streamline their procurement processes … while engaging with more than 183,000 government suppliers. (That’s a lot of suppliers!)

What does the future hold?
The future is now for municipal procurement. We suggest it won’t be long before the seismic shift of the trade agreements is felt. It’s just a matter of time before suppliers gain a better understanding of their rights and remedies under the trade agreements and hold municipalities accountable for compliance. Once the federal portal is implemented, we expect a slew of new suppliers (national and international) will foray onto the municipal procurement stage. There’s still time. If the seismic shift is coming as we suggest, there’s no better time than now for municipalities to get their procurement house in order.

Lise Patry co-founded LXM LAW LLP in 2020 to help municipalities with their procurement needs. LXM LAW’s team includes both experienced municipal procurement consultants and lawyers. Lise can be reached at [email protected] or by phone at 613-601-6333. 

Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.

 

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Check please!

Is your security risk management, business continuity and any other resilience program you have simply to prove you have one? Check the box, so to speak? It’s perhaps stable, reliable, unchanging?

Then you have a problem. You’re doing it wrong.

You’re doing it wrong.

You’re programs should be designed to generate improvements. There should be a built-in restart, of the assessment process. The cycle should ensure improvements re-align to the overall business objectives. Your improvements should replace those areas of the program that don’t work, are unnecessary, and need revitalization.

We can help. We can help get your program from simply sustaining itself to regenerating, restarting, re-aligning, replacing, and revitalizing itself so that it works when needed; so that it works for you. We can help get your program working for you.

It starts with a conversation.

Plan the Work. Work the Plan.

Should your Municipality need assistance, contact Michael White Group today, and we will be happy to answer your questions or provide quotations.

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Unused Technology Costs

How much does your organization spend each year on technology? Not just new technology but maintenance and subscription renewals as well?

 

If you’re a medium or enterprise-level corporation, it’s probably not an insignificant amount

 

For that matter, relatively speaking, a lot of small businesses can also point to technology as a good chunk of their operating expense

 

But now the more uncomfortable question…are you using all of that technology you’re paying for?

 

I was going through my invoices last week and realized that I’m still getting charged by our old hosting provider even though we moved our website to another platform several months ago

 

It’s a small monthly charge but, if I hadn’t caught it, who knows how long I would’ve kept paying those fees

 

Now imagine if that were to happen in a larger organization. Unfortunately, from what I’ve seen in large organizations, there’s not much left for the imagination

 

A few years ago, we were doing some consulting work for a client who’d heavily invested in a premier financial platform that was running on their on-premise servers

 

They’d paid seven figures for the initial license fee plus a year’s worth of consulting for customization, implementation and testing

 

And every year since they’d been paying close to six figures for annual maintenance

 

During our review we noticed two invoices our client had received from the same software supplier

 

One was for the annual maintenance, but the second one was for annual subscription fees

 

What had happened was, during the year they were going through their implementation, the supplier released a cloud version of the same product

 

And got the finance department to sign up for a one-year subscription so that they could start using the software right away

 

With the idea being that everyone would get moved to the on-premise version when it went live

 

But that road from on-premise to cloud is usually a one-way street. Rarely do you see an organization go the other way

 

So they went live, but everyone kept using the cloud version

 

And because there was a disconnect between the business and IT, the subscription would auto-renew each year and finance would pay the renewal

 

At the same time, IT would get an annual maintenance invoice for the server-based version and that would get paid as well

 

Now I know that a lot of you are hearing this and thinking about a time when this might have happened in your organization

 

Or you’re wondering if it’s happening right now

 

Folks, it’s September, which means a lot of your IT contracts are going to be coming up for renewals

 

And if there’s ever been a year when it was absolutely critical that you only pay for what you’re using…it’s this year

 

If you’re going to survive 2020 and still be standing in 2021, you have to get a handle on your IT spend

 

But you’ll never be able to do that until you have a handle on your IT contracts

 

And that’s where I believe we stand head and shoulders above everyone in this space

 

Because I designed a platform that gives your procurement team everything they need to properly manage contracts…and they’ll do it for pennies on the dollar

 

So take 5 minutes to see how OneView works

 

And if you need some help with your year-end renewals, reach out to us. We can help with that too

 

Mohammed Faridy

[email protected]

 

 

 

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Immunity

 

No individual, no organization, no place is completely immune from some form of a disruptive event. Pandemics, epidemics, financial and government unrest, terrorism, on top of the myriad of natural disasters and the consequences of those events that countries, states, provinces, cities, large enterprise, and small/medium business all could experience.

With these disruptive events, all of the aforementioned entities have difficult decisions to make with regards to their investment into response (and to what level of response), what level of security, what level of operational capability do they need during and immediately after these type of events and others.

How do we reduce the impact of disruptive events?

Invest in enhancing resilience. Organizations require the ability to prepare and plan, absorb and recover for and from disruptive events.

Building resilience, maintaining resilience, staying resilient.

Being resilient, allows organizations to be better equipped to anticipate disruptive events with the expectation that losses are reduced.

Disruptive events will continue. A proactive approach to enhancing your organization’s resiliency will reduce the economic, reputational, and operational affects that disruptive events can cause.

It all starts with a conversation.

We can Help. We’ve helped organizations enhance their resiliency, and will continue to do so with a collaborative approach and transparent communication.

Plan the Work. Work the Plan.

Should your Municipality need assistance, contact Michael White Group today, and we will be happy to answer your questions or provide quotations.

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Risk Complacency

Why should you have a cyclical strategy to your risk and security?

Risk Complacency. You run the risk of being complacent. The one man-made hazard that is probably the easiest to avoid and the largest threat to any sized business, organization, government, event, institution, and book club. Okay, maybe not the book club.

 

So, what happened?

It was quiet. It was nice, there was a sense of security. Unfortunately, that feeling is usually supplemented with a lack of awareness. A lack of awareness of threats, dangers to your organization, those deficiencies that slowly creep up but yet can quickly hammer down all the previous work.

Plan out the work to get your organization on a cyclical strategy to address, manage and mitigate your risk and security threats.

Once planned out. Execute the plan. Do what you say you are going to do…and don’t stop.

Need help? We can Help.

It starts with a conversation.

As we say…Plan the Work. Work the Plan.

Should your Municipality need assistance, contact Michael White Group today, and we will be happy to answer your questions or provide quotations.

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Organizational Resiliency – What else is it good for?

What else does organizational resiliency do for the organization aside from being able to carry on during and after a disruptive event?

  • Reduces stress – it reduces stress in those managing and working prior to, during and after an event
  • Increase in trust and confidence – employees believe in the leadership, each other, and the plan to move through an event
  • Reduces absenteeism – people are comfortable and confident in the decision making of their peers and the responsibilities they have
  • Improvement in physical health and wellbeing – with strong mental health comes stronger and maintained physical health
  • Productivity increases – a happy workforce wants to produce
  • An alert workforce – reduction in accident and workplace injuries
  • Learning power – with overall personal health and wellbeing comes the drive, adaptability to learn and the willingness to be flexible in the event of change

There are other benefits to making your organization resilient that are not just about the bottom line.

We can help your organization in building your risk and security management program resiliency.

It starts with a conversation.

We can Help.

Plan the Work. Work the Plan.

Should your Municipality need assistance, contact Michael White Group today, and we will be happy to answer your questions or provide quotations.

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How to Negotiate With Your Existing Suppliers

“If you know the enemy and you know yourself, you need not fear the result of a hundred battles”

–       Sun Tzu, The Art of War

 

When it comes to negotiating with a supplier you know versus a supplier you don’t, the tendency is to prefer the one you have an existing relationship with.

 

There could be several reasons as to why this would make the most sense:

 

–       Renewing an agreement for goods and services that are already being provided.

–       Engaging a supplier who is already on site for time-sensitive work

–       Leveraging pre-negotiated terms, conditions and/or pricing

 

However, these are not the most common reasons for businesses to prefer their incumbent suppliers to new ones.

 

The main reason we negotiate with incumbents is because we know them.

 

When I needed new tires I asked my mechanic what he would recommend, since he had been servicing my car for the last 6 years. Tires were not his specialty and I knew I would pay a premium by having him find and purchase the tires for me. But I also knew that he would recommend the best tires based on his knowledge of my car and the way I drive it.

 

Similarly, we tend to prefer looking to our incumbent suppliers for solutions to our problems because we feel that they will recommend what is best for our organization based on their knowledge and experience from having worked with us.

 

This makes complete sense, and in most cases would be the recommended approach. The goal should be to have 80% (or more) of your annual spend go through your top 20 suppliers.

 

But this should not mean that we forego the negotiation. A healthy supplier relationship is built not only on trust, but also on transparency and mutual benefit. Good suppliers understand this and are willing to open up discussions for a mutually beneficial agreement. The rest are looking to make a quick buck at their customer’s expense.

 

I recently had the good fortune and misfortune of representing a client in negotiations with two very well known software suppliers. The client had acquired another company through a divestiture and both suppliers were incumbents of the divested entity.

 

One supplier came to the table in the full spirit of partnership. Their team brought forth all of the knowledge they had gleaned over the years in licensing their products to the divested entity. They understood the architecture and proposed solutions that would allow my client to maximize their investment. They also provided industry insight that demonstrated an understanding of my client’s business beyond what their software did.

 

The other supplier pointed to their existing license agreement with the divested entity and stated that, since it did not allow for assignment of licenses, my client would need to re-purchase all of the licenses that were currently installed or face legal recourse.

 

In the end, we negotiated a short-term agreement with one supplier and established a longer-term strategic partnership with the other.

 

I will let you guess which supplier my client no longer uses.

 

Leveraging existing relationships doesn’t mean giving in to the incumbent’s demands, but rather negotiating mutually beneficial agreements with the suppliers that want to be true business partners and not just vendors that sell you things.

 

Have you recently negotiated with an incumbent supplier, or are you preparing to do so anytime soon? If so, I would love to hear about any challenges you’ve had to overcome or tips you may have for the rest of us.

 

OneView

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Redesigning The Way Your Company Works

COVID-19 has changed the way we work, play, and interact with our world. Whether your company is a single or multiple branch office operation, with industrial facilities or mobile public and field workers — developing a clear, concise program requires careful consideration and detailed risk and resource assessments.

Unique challenges require unique customized solutions.

The COVID-19 pandemic has created unique challenges for businesses and workforces all across Canada. Public health departments, government leaders, and associations provide continual streams of information where business owners and executives must analyze this information to the best of their ability, providing direction in the creation of customized solutions for their business.

Barantas Inc. (Barantas) has remained focused on the core principles of prevention and safety services offering clarity and direction to company programs and operational procedure development.

Barantas can assist in any of the following key areas:

  • Business re-opening plans and implementation strategies
  • Operational redesign of workspace management
  • Worker inter-personal safety prevention programs and methodologies
  • Workforce programs for office, industrial, municipal and education sectors
  • Construction project-specific pandemic enhanced programs and inspections
  • Health and safety manual and policy development
  • Personal protective equipment supply and sourcing (masks, gloves, face shields)

Barantas provides comprehensive, long-term protection strategies and a personalized partnership anchored by our commitment to service excellence.

Redesigning Workplaces in a Post Pandemic Era

Our national reach and multi-disciplinary approach to safety management allow you to access a complete suite of health and safety services for a fraction of what it would cost you to source these services individually.

Barantas interactively works with you in evaluating and developing your new workplace strategies and worker health and safety management. Our goal is to collaboratively provide our expertise and knowledge to your key persons or teams, building a sustainable, internal infrastructure focused on the health and safety of your workforce.

We utilize a FIVE phase process. This process begins with a data acquisition phase, where we learn and understand your business, through to ensuring your teams can execute, monitor and continually adapt your program to meet today’s and future challenges.

Our process is based on the following principles:

  • Risk Reduction: Focused on reducing risk through prevention methodologies using the hierarchy of controls.
  • Individual Health and Safety Protection: Ensuring your company is taking the precautions reasonable for the protection of workers, employees, clients and affected individuals.
  • Maintenance of Applicable Requirements: Continual monitoring of authority directives, legislative requirements, and corporate due diligence best practices combined into a preparedness program able to adapt to changing environments and new directives.
  • Education and Sustainability: As part of working with your team through the five-phase process, our goal is to ensure understanding and application of the principles and methodologies for key team members ensuring an ability to assess, respond and adapt to continual change in both external factors and internal business decisions.

FOR MORE INFORMATION ON OUR 5 STEP PROCESS https://www.barantas.ca/the-five-phase-process/

For a full version PDF of this document https://www.barantas.ca/pandemicmanagement/

 

 

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