Board Voice continues to have many concerns with the WorkBC procurement process, which led to a fairly significant change in employment-training providers throughout BC as regions went from 73 to 45 and a number of high-performing non-profit providers lost their bids.
We’ve had a meeting with Social Development Minister Shane Simpson and have also sent emails and letters documenting our concerns. Below is last week’s response from the ministry to Board Voice executive director Jody Paterson. We are not letting this issue go, and are striking a working group to continue to delve into procurement processes at both the federal and provincial levels that ostensibly judge for-profits and non-profits equally, but in fact don’t account for the many community-strengthening “extras” that charitable organizations bring to this work.
Here’s the list of 97 BC communities and the 45 successful proponents who will now be providing employment training services in those communities. These contracts could be in place now until 2028.
Dear Ms. Paterson:
Thank you for your email of January 10, 2019, and for meeting with me regarding the WorkBC contracts and procurement process.
I appreciate your position on non-profit organizations and the time you’ve taken to enquire about this procurement process and the new contracts for WorkBC Employment Services.
As you may be aware, the ministry recently held a call with service providers and contractors to discuss their concerns and clarify any details. Over the coming months, we will be meeting with service providers again to continue building relationships with them, so we can best serve our mutual clients.
The WorkBC Employment Services procurement process has resulted in an increased proportion of work to be delivered by not for profit organizations. The proportion of not for profit WorkBC funding and contracts will be increasing to approximately 57 percent in the new program, while the for-profit proportion of funding and contracts will be decreasing to approximately 39 percent (the remaining 4 percent is with a public institution).
Through the life of the program we have seen a shift in the types of clients that require services. Over time clients have been trending towards more barriered individuals who require enhanced and flexible services to support them. The ministry is constantly seeking to evolve and improve the program and has undertaken modifications throughout the life of the current contract. However, given the changing labour market and client demographic shifts the program needed to be refreshed to modernize. Some fundamental changes were too significant to undertake within the existing contract.
Program renewal work has been underway for several years, beginning in 2015 with the ministry engaging in stakeholder consultations. The work included both internal and external reviews, which identified opportunities to enhance the employment services that we offer. This work was supported by an independent report from Ference and Company that made numerous recommendations to enhance the program, including a reduction in the number of program catchment areas as well as a financial model that supported outcome payments.
Based on consultations and reviews, the ministry is making significant changes to the employment services contracts for this new contracting cycle. Changes will include an enhanced focus on flexibility in services to ensure the most effective and positive outcomes for clients. Sustainable employment is the key goal of the new program and, in addition to a fixed fee, the contract payment model focuses on outcomes rather than transactions. Outcome payments are significantly greater for more barriered clients, ensuring that service providers focus on supporting the most marginalized of clients. For example, in supporting a highly functioning job ready individual, a contractor could receive up to $2,000 in outcome payments. For more barriered clients, the outcome payments can go up to $12,000 per individual.
British Columbia receives Labour Market Development Agreement (LMDA) funds from the federal government to support WorkBC Employment Services. Recently BC renegotiated this agreement to broaden eligibility to more marginalized clients and increased BC’s flexibility to deliver services, focusing on positive outcomes for clients.
I can confirm the procurement process has been conducted in accordance with the provincial government’s legislation and aligns with core policy. Government sets standards for procurement processes that follow applicable laws and trade agreements. The ministry followed all current government procurement rules to ensure an open and fair tendering process. The process was supported and monitored by the Ministry of Citizen Services – Procurement Services Branch as well as overseen by legal representatives from the Attorney General.
The WorkBC Employment Services Request for Qualifications (RFQ) advertised on BC Bid was open to all interested parties, including current service providers. The evaluation of RFQ responses was based on demonstrated experience in relevant service delivery, stakeholder engagement, knowledge of the community and organizational qualifications.
Following the RFQ, there was an evaluation of successful vendors’ Request for Proposals (RFP). While evaluation criteria for the RFP included the vendor’s approach, capability, and service model, a key criterion was the vendor’s ability to deliver quality employment services tailored to local community needs.
I would also like to address specific concerns outlined in your letter.
- Reducing regions from 73 to 45
The new program will have 45 catchments and will increase points of service within communities from 84 to 103 locations. The reduction in catchments addresses transportation corridors and community connections, allows for delivery of specialized services to be more widely offered and for more targeted funding directed to client services. There will also be 2 contracts for province wide delivery of Apprentice Services and Assistive Technology Services.
- Majority of non-profits lost their bids or didn’t bid at all
Only one of the 27 successful organizations is new to the WorkBC program, all other applicants have been delivering services since 2012. Successful service providers have experience working in the current program, including services, policies and systems that will support them in the new contract. Service providers were all required to demonstrate through the procurement process their knowledge of the communities, development of community level partnerships and a service delivery model that would be suitable for the community.
As noted earlier, the RFP was open to all interested parties, including current service providers. While the overall number of contracts have gone down due to the reduced number of catchments, both the percentage of contracts and dollar value for not for profits has risen over the current program vis-à-vis for profit organizations. Of all qualified bidders, 30 were not for profit and of those, 17 were successful.
Based on the results of the RFP process we have seen the representative portion of not for profit organizations supporting WorkBC increase. The new program will actually move more opportunities into the hands of the not for profit sector.
- Importance of community connection
Past success and community connections were evaluated at the RFQ stage. Every question required that respondents provide examples of their experience in delivering programs or services relevant to the WorkBC program, including: delivering client centred employment services, working with diverse client populations and providing multi-channel service delivery. Depending on the number of applicants up to 4 organizations who passed the RFQ moved forward to the RFP stage of the procurement process.
Community connection and commitment was a key evaluation criterion. Respondents were evaluated on their experience in creating and maintaining positive community connections and access to local community resources. Respondents were asked to provide examples of their experience in establishing a community presence and connections with local community groups and organizations. Respondents were also asked to provide evidence of how such local connections were leveraged to achieve employment outcomes for citizens.
This ensured that all qualified bidders for the RFP met standards for past success and community connection.
- Maximus & WCG
Maximus was the successful proponent in three catchments, which is an increase over the one contract they currently have. However, due to the smaller size of the catchments they were successful in, their overall contract dollar value will result in less than a 10 percent increase. I can also confirm that Maximus has community partners in every catchment they were successful in.
A number of other for-profit organizations both large and small were successful in the procurement process, including WCG. WCG is an organization who has been a contractor in WorkBC for the last seven years across a number of catchments with a consistently strong record of client service and outcomes as well as community connections. WCG has more than 25 sub contracted organizations in it’s service delivery model, the majority of which are not for profit organizations.
Through the procurement process a number of not for profit service providers, such as MOSAIC or the Open Door Group, were able to significantly increase their WorkBC funding and presence.
- Layoff notices being issued
For staff hired or transferred to the new WorkBC contract, the ministry has contractual requirements to ensure service provider staff are reasonably compensated. The Contract requires that all employees are paid at a minimum the median Prevailing Wage rate as set by the Federal Job Bank website. For example, the prevailing wage for an employment counsellor ranges from $23.63 to $33.00 per hour, which is greater than the living wage in all parts of BC.
- Community Connections
The ministry recognizes the importance of partnerships at the community level. Under WorkBC, 130 unique subcontracts have been retained by Service providers to continue to provide services. The majority (71 percent) of these organizations are local, not for profit agencies, which is an 11 percent increase over the current program model where 60 percent of sub-contractors are not for profit.
- For profit contractor lost all bids and it partners with many not for profits
What I can confirm for you is that a significant number of not for profits are being subcontracted within the new WorkBC model. There are more than 130 unique service providers (75 percent of which are not for profit organizations) who are subcontracting with our 27 contractor organizations. They have formed almost 240 unique agreements. This means that on average there are more than 5 service provider agreements in each catchment.
- Removal of 25 percent Revenue Flow Through
This requirement was removed in the new WorkBC Employment Services Contract as it was evident throughout the province that there were various Contractor and Approved Service Provider arrangements/sub contracts that did not support the intent of the flow-through but created an artificial target. It also placed unintended challenges in the rural catchments that had limited specialized services in order to meet the revenue flow through requirements.
The redesigned WorkBC service delivery model focuses greater emphasis on outcomes-based funding, so contractors have more flexibility to utilize delivery models most effective in their region to sub-contract to specialists based on unique clients’ needs. The collaboration, partnership and communication between contractors, sub-contractors, and service providers in the communities will be greater emphasized through the annual business plan process in order to achieve sustained outcome fees.
- Bids were judged blind
In following government mandated procurement processes the ministry ensured that the process was fair and transparent for all applicants. Based on the outcomes of the procurement process a considerable number of not for profit organizations proved themselves very competitive against for profit organizations.
- Procurement in BC
BC’s standard procurement terms and conditions treat not for profit entities the same as for-profit entities. The procurement process followed government core policy, ensuring the competition was fair, open and transparent for all applicants. The Ministry made it a priority to ensure staff hired through WorkBC Employment Services contracts reflect the diversity of their communities and our province. The procurement of new employment contracts was done in alignment government’s Social Impact Purchasing Guidelines. Proposals from not-for-profit agencies were evaluated against the same criteria as those received from any other Proponents.
WorkBC Contractors are required to have staff recruitment practices that reflect the diversity of the community in which the they operate. They must have demonstrated experience improving accessibility and removing barriers for people with disabilities. They must have staff recruitment and retention practices which include multiple and diverse population groups and provide inclusive and accessible environments for both clients and staff. Contractually they are required to make all reasonable efforts to hire and retain women, visible minorities, Indigenous Peoples, persons with disabilities, persons of diverse sexual orientation, gender identify or expression (LGBTQ2S+), youth (16-30), older workers (55+), and others who reflect to the diversity of their community. Contractors are also required to make all reasonable efforts to hire and retain individuals who have been or are in receipt of income assistance.
The procurement process was not biased in favour of any organization based on results which saw an increase in not for profit representation and a decrease in for profit representation in WorkBC.
- Lowballing was the order of the day
In order to ensure value for money in the use of public funding, all government procurement processes identify financial scoring criteria. The WorkBC procurement process developed a financial scoring methodology that only accounted for 20 percent of the RFP scoring. This means that 80 percent of the procurement scoring was based on the organization’s approach and capability to deliver employment services.
The Employment Services RFP was for $249M, and the resulting contract values are also $249M. Service providers are paid to deliver service through a combination of Fixed and Performance Fees.
The Fixed Fee is intended to provide a fixed monthly contribution to the service providers to support the infrastructure and staffing necessary to deliver the services in the catchment. Performance Fees are based on documented client outcomes and include both monthly client milestone fees for assisting someone to move along the employment continuum and monthly sustained outcome fees for helping a client achieve ongoing, sustainable employment.
If an organization reduced their Fixed Fee bid through the RFP process, any remaining funds were added to their Performance Fee. While proponents were able to bid competitively on the Fixed Fee, the overall contract value was not reduced as service providers can access the remaining value of the contract through strong client service and performance outcome payments.
By the contract, Fixed Fees are advanced at the beginning of every month for the duration of the contract and any Financial Supports paid by the organizations on behalf of clients can be claimed within the monthly billing cycle. The Fixed Fees provide a consistent and dependable monthly payment to support ongoing contractor operations. Service providers are also paid monthly once clients sustain employment for 4, 24 and 52 weeks for Performance Fees. Performance Fees also apply to existing program clients who transition to the new service provider, which means that service providers will be eligible to receive Performance Fees in the initial month following the launch of the program and monthly thereafter.
It is important to the ministry that service providers are financially viable in order to maintain strong client services throughout the province. The program has a robust governance model that will allow the ministry to hear feedback from service providers and stakeholders on a continuous basis. If financial viability is an ongoing concern for service providers, the Ministry will engage in a dialogue and evidence-based review of the model.
- Nothing in the 2016 evaluation such a major change was necessary
In March of 2015, the ministry undertook an evaluation led by Ference & Company. Consultations included interviews with over 5,000 EPBC clients and 263 surveys with key informants including ministry representatives, service providers, staff, employers and selected experts. This report was released in 2016 by the ministry and is currently available publicly. Using the extensive research of the Ference report as a foundation, the ministry continued to gather feedback from various sources throughout the life of the program. The Ference report was identified as a source of information when discussing long term enhancement opportunities to WorkBC. The enhancements include providing greater access to work placements and skills training, improving service delivery for clients with low employment readiness, placing a greater emphasis on outcomes-based funding and simplifying program administration and reporting requirements.
The Ference Report can be found here.
.Please see the attached list of the not-for-profit organizations Ference & Co interviewed when conducting their analysis.
I appreciate you bringing your concerns to my attention and working with government to ensure the fairness and transparency of our procurement process. I would like to assure you that the new contracts will ensure that WorkBC is meeting the needs of our current and future labour market and supporting all British Columbians to find and keep jobs.
As we launch our new program this April, we will be looking to reach out to communities and organizations to understand how the program is working at both the provincial and community level. WorkBC is an important part of delivering services to British Columbians in need and ensuring we have a program that provides sustainable employment for the citizens is a top priority. We hope that Board Voice would be interested in dialoguing with us further on how we can continue to improve services and make WorkBC as effective as possible.
For more information about WorkBC Employment Services, please view the official BC government news release where you will also find a fact sheet about how government is improving services at WorkBC and a backgrounder on how WorkBC services are changing to better meet people’s needs.
Thank you again for writing. I assure you the ministry will ensure that we’ll work collaboratively to address issues with the changes as we go forward with this process.
Shane Simpson, Minister of Social Development and Poverty Reduction