Item - 2025.GG20.10

The Chief Procurement Officer recommends:

1. City Council amend Municipal Code Chapter 195, Procurement, Municipal Code Chapter 71, Financial Control, and the Procurement Policy as set out in this report, effective July 2, 2025, to:

a. Eliminate the Bid Award Panel;

b. Delegate award authority to the Chief Procurement Officer to award open competitive solicitations up to $30 million;

c. Replace Bid Award Panel's current extended authority to exercise the power of a Standing Committee with extended authority to the Chief Procurement Officer, and remove extended authority during summer recess and election recess; and

d. Delegate commitment authority to the City Manager to approve the commitment of funding for open competitive procurements up to $30 million and authorize the City Manager to sub-delegate commitment authority up to $30 million to City officials or staff.

This report outlines the findings and recommendations from a review of the Bid Award Panel and its role in the City's procurement process. In 2023, Purchasing and Materials Management Division completed a review of Toronto Municipal Code Chapter 195 (Procurement By-law), per the review requirements set out in the Procurement By-law. The review was scoped into two phases. City Council adopted Phase 1 recommendations in December 2023, which took effect on July 1, 2024. The report to Council identified key phase 2 review items, one of which was a review of the role of the Bid Award Panel to determine if it effectively serves its intended purpose, which is to enhance oversight of the procurement process. This review aligns with Council direction to consider the role of Bid Award Panel relative to capital program delivery, in particular regarding the feasibility of streamlining the bid award process to under 30 days.

The City’s procurement activities are governed by three key By-laws that set out the authorities required for procurement to proceed: commitment authority, award authority, and signing authority.

- Toronto Municipal Code, Chapter 71 (the Financial Control By-law) outlines commitment authority, which is the authority to make a contractual obligation for the purchase of goods, services or construction, including the execution of any agreement or contract, which commits City funds.

- Toronto Municipal Code, Chapter 195 (the Procurement By-law) establishes award authority, which is the formal authorization to proceed with the purchase of goods or services or both from a supplier who has been selected through a procurement process.

- Toronto Municipal Code, Chapter 257 (the Signing Authority By-law) sets out who may sign agreements for the purchase of goods and services, where a commitment and an award have been made. The same authority is also in Section 11.1 of the Procurement By-law.

The Bid Award Panel is an administrative committee that authorizes both the commitment of funds, and the award of open competitive solicitations valued between $500,000 and $20 million. Purchasing and Materials Management Division completed a review of the Bid Award Panel to determine if it enhances oversight of the procurement process. The review was conducted using the guiding principles of: openness, fairness, and transparency; efficiency and effectiveness; accountability; and adaptiveness.

The review determined Bid Award Panel does not provide additional oversight in the procurement process to justify the delays and additional workload that it creates, while noting:

- Review of procedural compliance does not occur at Bid Award Panel.

- The Bid Award Panel process adds approximately 10 - 20 days to the award timeline.

- By recommending an award and approving the recommendation to proceed to Bid Award Panel, Division Heads and the Chief Procurement Officer, respectively, are accountable for award decisions.

- The $20 million award threshold, set in 2007, is not reflective of current economic realities.

The review of Bid Award Panel identified benefits of the committee structure related to transparency, a key principle of the City's procurement process. All awards over $133,800, including those resulting from non-competitive and limited solicitations, are posted on the Toronto Bids Portal and the Open Data Portal and will continue to be reported in these places. However, some of the features of Bid Award Panel reports are not available through these portals, including: a summary of bids received and bid price, and the ability to subscribe to receive notifications when new awards are posted.

Given these findings, this report recommends the following:

- Eliminate Bid Award Panel.

- Delegate award authority to the Chief Procurement Officer to approve open competitive solicitations up to $30 million, subject to conditions set out in the Procurement By-law.

- Replace Bid Award Panel's current extended authority to exercise the power of a Standing Committee with extended authority to the Chief Procurement Officer but remove extended authority during summer recess and election recess.

- Delegate commitment authority to the City Manager to approve the commitment of funding for open competitive procurements up to $30 million, subject to conditions set out in Toronto Municipal Code, Chapter 71 (Financial Control By-Law), and authorize the City Manager to sub-delegate their commitment authority.

To ensure transparency remains central to the procurement process, the following measures will be implemented:

- Review existing datasets to ensure the types of information available through Bid Award Panel remain available to the public and that the datasets are simple to use.

- Add clear instructions on how to find these datasets to the 'Doing Business with the City' webpage.

Purchasing and Materials Management Division will work to identify additional options for award information to be shared with Councillors and the public.

The changes recommended in this report aim to improve efficiency and oversight while upholding the principles of open, fair, and transparent procurement. Additionally, they align with the City's evolving governance structure and the need to adapt to current economic conditions.

To put these recommendations into effect, amendments will be required in:

- The Procurement By-Law.

- The Procurement Policy, to align with the updated authority to award open competitive solicitations.

- The Financial Control By-law, to align the updated award authority with the authority to commit funding resulting from these awards.

Administrative processes and procedures will also be updated by the Chief Procurement Officer, in line with the Procurement By-law, Section 3.1.A, as well as by the City Manager, in line with the Financial Control By-law.

There are no financial implications arising from this report.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the information presented in the Financial Impact Section.