Item - 2021.GL24.4

The General Government and Licensing Committee received the report (June 15, 2021) from the Controller for information.

This report provides a summary of the key activities, initiatives, and performance indicators for the Accounting Services and Purchasing and Materials Management Divisions for the year ending December 31, 2020, with prior year comparatives, where applicable. This report includes:

- Activities of Accounting Services Division including invoice payments;

 
- Consulting services expenditures for City Divisions and Agencies and Corporations including details by category and vendor;

 
- Activities of Purchasing and Materials Management Division including competitive purchasing activity; cycle times; Purchasing and Materials Management Division stores and other procurement information;

 
- A summary of non-competitive purchasing activity valued at $3,000 and above for City Divisions, excluding purchases completed through Schedule A of Chapter 71, Financial Control and Accountability Offices; and

 
- A response to City Council's request dated December 16, 2020 from GL19.2 to report back to General Government and Licensing Committee on the use of contract extensions up to $500,000, with particular attention to its use more than once on the same contract.
 

The City's use of external consulting services varies by year and project. Consulting services supplement critical skill sets and expertise that are needed just-in-time and/or are not available within existing staff complements, as well as enable the City to quickly complete special projects or essential initiatives, or respond to emergency situations while maintaining existing service levels. The City obtains external consulting services through a formal procurement process to ensure that individuals and/or organizations with relevant expertise are selected. In addition, expenditures have been budgeted as part of fiscal 2020.

Overall, the City of Toronto and its A&Cs spent $40.1 million on consulting services in 2020 for operating and capital combined, which represents less than 1 percent of the City's total consolidated expenditures. Notable expenditures in 2020 include:

- The City's one-time operating investment to support enterprise-wide transformations, particularly aimed at improving the effectiveness of procurement and sourcing practices and budget modernization. These initiatives resulted in savings in excess of $41.0 million since the start of these initiatives in 2019. Additional benefits of $110 million are anticipated over a 17-month period in future fiscal periods;

- The City's partnership to improve mental well-being of all Torontonians (THRIVE Toronto);

- Capital initiatives associated with financial sustainability and environment assessments;

- Toronto Community Housing Corporation's replacement of end-of-life information technology infrastructure

- Toronto Transit Commission’s review of its new streetcars and subway assets.

 
COVID-19 had a significant and meaningful impact on operations, resulting in unique circumstances in 2020 due to the City’s response and recovery efforts. For example, the City experienced increased consulting operating expenditures associated with the Toronto Office of Recovery and Rebuild; CaféTO; and other COVID-19 recovery strategies.

Similarly, Purchasing and Materials Management Division experienced a reduced number of competitive solicitations issued and the increased solicitation cycle time which can be attributed the focus of both Divisions and Purchasing and Materials Management Division on responding to the pandemic.

The value of 2020 non-competitive procurement was $252.3 million which represents 11% of total purchasing activity in 2020, as compared to 2019 which experienced $119.7 million in non-competitive procurement (4 percent of total purchasing activity in 2019). The number of non-competitive procurements issued in 2020 was 918 which is an increase of 62.2 percent over 2019.  These increases are directly attributable to the City's response to COVID-19 where the City was required to enter into an additional 160 emergency procurements and a 146 non-competitive procurements on the basis of scarcity in the marketplace when procuring personal protective equipment. In addition, demands on Purchasing and Materials Management Division and Divisions led to an increased number of non-competitive bridge contracts and time constraint contracts that were needed to ensure services continued.  Without the pandemic, the City's use of non-competitive procurement in 2020 would have been comparable to 2019.