Underground construction work on Third Street downtown took place throughout the summer season of 2024. A new report received by committee shows the majority of money tendered out to contracts in the past two years went to local or regional business.--NEWS FILE PHOTO
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Two out of every three dollars in city contracts is spent in the southeast region, according to a new purchasing report provided to Medicine Hat council, and only 50 cents spent outside the province.
That’s not by design – all Alberta cities are barred from writing local preference into tenders – but it is showing up in contract awards based on cost, service provision and the confidence in local firms, says a city committee chair.
“I’m pleased to see it,” said Coun. Robert Dumanowski, head of the corporate services committee, which on Thursday received an annual supply chain report from the purchasing department.
“I’ve heard many, many times before that residents want local preference, though we’re barred from (implementing) one because of interprovincial agreements,” said Dumanowski. “We may see more of that in the future due to political discussions (among premiers), but there is a competitive edge.
“I’m pleased to see it, because when you keep money local it helps all businesses, and there’s a service angle as well.”
Businesses located within the city or the immediate region won tenders worth 62 per cent of local purchasing over the past two years, about $83 million of the $134 million two-year total.
Another $27.3 million went to businesses registered elsewhere in Alberta, and $24.3 million to those outside the province.
“That may look significant .. but we’ve had some higher value projects in that category,” said Tibor Domian, manager of supply chain.
Among non-Albertan companies winning contracts included $7 million to an Ontario firm for a transformer, and another $7-million project that was won by a Saskatchewan-based construction company.
The report only covers open competition tenders, not sole-sourced or preferred supplier contracts. Those measures cover specialized equipment, such as at the power plant, or brand-specific requirements, like replacement parts for the vehicle fleet.
“We have General Electric generators in our power plant, so we are limited in the number of suppliers that we can deal with,” said Domian.
The data includes projects valued above $10,000 that are open to bidding. Different procedures cover emergency spending. As well, on contracts worth up to $75,000, the city can provide a closed process, inviting specific companies to bid if more than three separate bids are submitted.
Aside from emergency purchasing, the city can’t include local preferences in larger contracts due to provincial regulations and inclusion in the provincial free trade agreements.
Other committee members were also encouraged that contract awards are considered on a variety of factors, including price as well as quality of work and delivery.
“I’m more concerned with value and responsiveness,” said Coun. Allison Knodel. “Often times the cheapest isn’t the best.”
A total of 156 competitions proceeded in 2023, worth $73.4 million, and 112 in 2024, worth $60.7 million.
“We’ve been able to build a very good relationship with the local chamber and construction industry,” said Domian.
