Internal Audit Consulting Engagement: Procurement and Authorities of Large-Scale Purchases (Final Report)

May 16, 2016


Research and Reviewer Matching Solution Project Procurement History

Year Month Event
2013 Oct Reforms Implementation Steering Committee (RISC) is formed.
Nov Emerion Environmental Scan Results are presented to RISC.
2014 Jan RFP Solutions was engaged to develop the RFP for RRMS.
Mar Samson & Associates were engaged to provide procurement advice.
Apr Procurement Strategy was developed.
Jun RRMS RFP is posted on Buy/Sell.
Aug 19 questions received from Bidders and responses were posted online
Bids are received and evaluated as unsuccessful.
Sept 2nd RFP is modified and posted online.
Oct Bidder's conference is held.
Bids are received and evaluated and successful bidder is selected.
Dec Elsevier contract is signed.
2015 Elsevier contract is implemented and is in ongoing contract management.

Procurement Areas Covered

Executive Summary


Procurement Strengths


Policy on the Management of Projects



CIHR should develop a project management framework and process which includes a Project Complexity & Risk Assessment and consistent costing practices.

Policy on Investment Planning



The CIHR Investment Plan must be updated to include all significant projects including the Research and Reviewer Matching Solution. It should be regularly updated and included as part of an overall project management framework.


Resources and Technical Expertise


A process should be developed to identify gaps in expertise when engaging in highly complex procurement activities.

Recommended Next Steps - Project EnaBleS

  • Update the Investment Plan to include Project EnaBleS (which includes the Research and Reviewer Matching Solution).
  • Amend the current RRMS contract for an additional year extension at a reduced cost to allow the system to mature and enable a proper post pilot feasibility study.
Step 1
  • Perform a post pilot feasibility study on the system to determine if it meets CIHR's needs and is a viable solution moving forward.
  • Perform an environmental scan to determine if alternative technology and vendors exist or have entered the market since the previous procurement of RRMS.
Step 2
  • Determine whether to continue with the procurement and use of the system.
    • If YES: Complete a PCRA, examine current project costing, and determine if the current project authority is sufficient. If authority is not sufficient, seek TB approval.
    • If NO: Consider other procurement options.
Step 3
  • Procurement Options

Procurement Options

Procurement Option #1 – Research and Reviewer Matching Solution

Perform custom procurement in-house

Under subsection 28(1) of the CIHR Act, CIHR is given the power to procure goods and services from outside the federal public administrationFootnote *. However, if the requirement is greater than $2M, procurement must be managed by PSPC on behalf of CIHR. The alternative to PSPC is to obtain prior Treasury Board approval (via a Treasury Board submission).

Pros Cons
  • CIHR maintains overall control
  • CIHR is fully accountable
  • Builds internal capacity for future
  • Less administratively burdensome
  • Quicker turnaround time
  • More flexibility in the immediate term if no significant changes occur
  • Need to hire external expertise
  • Limit of $2M contracting authority
  • Limitations if there are significant changes or costs increase.
  • Considerations for sustainability over the longer term
  • Risk of higher cost compared to other methods

Procurement Option #2 – Research and Reviewer Matching Solution

Pre-competed Procurement Instruments (PCPI)

Can result in standing offers, supply arrangements, or task authorization contracts. Departments and agencies should always consider use of these procurement instruments as the first method of supply of goods and services.

Pros Cons
  • Lowest risk as companies have been pre-assessed & pre-qualified
  • Generally lower cost – economies of scale
  • Time delays are minimal when compared to custom procurement contracting
  • Accessible with predefined process
  • Shared accountability
  • Uses internal resources
  • Limited solutions available that meet CIHR's needs
  • Loss of control and flexibility as dependent on constraints of PCPI
  • Many mandatory requirements
  • Does not build internal capacity
  • Less flexibility if costs exceed $2M

Procurement Option #3 – Research and Reviewer Matching Solution

Advance Contract Award Notice (ACAN)

"A public notice indicating to the supplier community that a department or agency intends to award a good, service, or construction contract to a pre-identified supplier, believed to be the only one capable of performing the work, thereby allowing other suppliers to signal their interest in bidding by submitting a statement of capabilities. If no other supplier submits a statement of capabilities that meets the requirements set out in the ACAN, the contracting officer may then proceed with awarding the contract to the pre-identified supplier."Footnote 2

Pros Cons
  • Efficient and cost effective process
  • Fair, open, and transparent
  • Provides potential suppliers with the opportunity to demonstrate, by way of a statement of capabilities, that they are capable of satisfying the requirements set out in the ACAN
  • Higher chance of maintaining current supplier
  • Could be perceived as lacking transparency
  • If a valid challenge to the ACAN is received from a vendor, then the appropriate competitive method must be used
  • PSPC recommends avoiding sole-sourcing as is considered a non-competitive process
  • Requires documenting justification for non-competitive process

Procurement Option #4 – Research and Reviewer Matching Solution

Public Services and Procurement Canada

PSPC is normally the contracting authority for large, complex goods and services contracts for departments, which is often the major cost of a project. Dedicated account managers are assigned to each department and agency to provide advice and solutions.

Pros Cons
  • PSPC assumes full accountability
  • Controls are in place for risk mitigation
  • Higher authority for larger, longer-term procurement actions
  • Fair, open, and transparent
  • Uses no additional CIHR resources compared to other options
  • Supplier can be maintained for a longer period of time
  • Dedicated account manager
  • Process ensures compliance with regulation
  • No costs for procurement services, expertise or guidance
  • Reduces contractual risks
  • Longer lead time to establish
  • Risk of increased administration burden
  • Loss of CIHR's control over the procurement process
  • Less flexibility and ability to adapt to change
  • Increased oversight of compliance requirements and authorities

Procurement Option Recommendation

Other Observations


Appendix A - Questions Examined

Authorities and Policies

Resources and Expertise

Common Practices

Going Forward

Appendix B – Project vs. Contracting Authority

The authority to proceed with projects differs from the authority to enter into contracts

  Project Approval Authority Contracting Authority
  • Policy on the Management of Projects
  • Board Policy on Investment Planning
  • Financial Administration Act
  • Delegation of Financial Signing Authorities
  • Treasury Board Contracting Policy
  • The authority to undertake a new project**
  • Projects may include contracts
  • The authority to procure goods or services up to a certain limit (expenditure authority - sec 32)
  • Contracts may be part of projects
CIHR's Authority Limits*
  • $1M (total costs)
  • $400K (goods)
  • $2M (services)
Over Limit
  • Seek Treasury Board Authority
  • Procure via Public Works

Appendix C - References

Other references used for information:

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