Board Voice meets with Hon. Shane Simpson re: WorkBC procurement

Board Voice executive director Jody Paterson was invited by the Hon. Shane Simpson to meet Jan. 23 with the minister and the ADM in charge of the recent WorkBC procurement process, Chris Brown.

Board Voice has many concerns about the procurement process for these contracts. The concept of a “level playing field” for the bids did not include any points for community connection, past performance (though that did count at the RFQ stage), or the additional benefits that non-profits bring to this work – multiple services through a single entry point; reinvestment of all profit back into community services; connection and collaboration with a diverse community service network.

It appears unlikely that the results of this procurement can be reversed. But the results do emphasize the need to look at procurement processes and whether they are measuring the value-added benefits of a non-profit bidder. As well, results highlight the urgency to be able to quantify these benefits more clearly, because they are the “special sauce” in the sector.

If we are viewed only as non-profits doing work that could just as easily be done by a for-profit, then we will soon be following countries like the UK into the for-profit provision of social services, despite the numerous and high-profile problems that has brought for such countries. As our members know, we have already lost ownership of much of the work we once did over the past 20 years.

Here is the report we submitted to the Social Development and Poverty Reduction minister. Much thanks to the many members who shared their knowledge and insights with us in the preparation of this document:

Race to the bottom: The impact on community of the WorkBC procurement

Jan. 23, 2019

 Board Voice has major concerns about the impact that recent awards for WorkBC contracts will have on many BC communities. We identify an extremely worrying trend away from best practices in social care and investment in community – a trap that other countries like the UK have already fallen into and are now trying to reverse.

The procurement process fails BC’s communities and citizens when it is overly focused on low-balling financials without sufficient weight given to community connection, social benefit and past success in delivering services. When a “level playing field” is measured only by financial indicators and blind judging of RFPs in larger and larger regions, the extensive benefits and social good that community non-profits bring to the work is lost, and the playing field tips heavily in favour of large for-profits.

We do not believe this government wants this outcome.

Strong working partnerships among multiple community organizations were destroyed in this procurement. Charitable organizations that had been partners ended up pitted against each other, all chasing elusive dollars that in a number of regions will now go to international corporations with no ties in the communities where they will work. There are clear concerns for the next round of bids due to the risk of expertise and capacity of community organizations being lost.

The following points summarize our concerns:

  • Regions reduced from 73 to 45, which all by itself reduces the ability of non-profits to compete in such large catchments. They had previously been reduced from 300 to 73 in 2012, which was the start of current contracts.
  • Board Voice doesn’t yet have the total provincial picture but even the half that we have shows that at least 25 of the current contract holders either lost their bids or didn’t bid, almost all of them non-profits. That is a major change, with no public consultation or indication from government that such a dramatic change was required. Made-in-BC expertise in job-training that in some cases dates back 30 years will be lost.
  • A very large international corporation lost in one region but won in others. Our understanding is that they were able to win at least one of those regions without a single community partner, because demonstrating that connection was not a component of this RFP. Hundreds of hours of partnership development among their community-based competitors counted for nothing in this RFP.
  • Another very large international company strengthened its position as well. The profits of international corporations will not stay within BC, and most certainly will not be reinvested in other social-care services of benefit to the BC government and to British Columbians overall.
  • All agencies who lost their bids are now issuing layoff notices. That will cause major disruption in the workforce in these communities, and the current workers are finding that when they go to apply with the new proponents, the wages are $3-4/hour less. Other laid-off workers are discovering the new proponent in their region has no interest in hiring them.
  • Even if laid-off workers find jobs, they are losing all the wage benefits that seven years of working with a previous successful proponent has brought them. They are back to the beginning.
  • There were five areas that RFPs were judged on, none of which involved community connections/engagement or past successes with finding people jobs. While the RFQ process looked at performance, the RFP process did not. A for-profit company that partnered with many non-profits in the communities where it operated lost in every region where it bid, despite having the most successful placement rates in the province. When community connection and past performance don’t count when picking winners, community organizations are hit hardest. And what a puzzling way to pick a service provider. It’s like hiring a plumber, say, by choosing to not check into past performance out of a desire to be fair to all plumbers.
  • Previous contracts required a 25 per cent flow-through to other community partners. Successful bidders had to thus show connection to and benefit for other organizations in their communities, and in fact had mostly built partnerships of 5 or more community agencies (most non-profit) to execute the contracts. This round removed that requirement. That broke up many successful multi-agency employment partnerships around BC.
  • Non-profits have many services that job-seekers can access while there for job training – go to the food bank, drop a child off at daycare, get debt counselling, etc. All of that “one stop shop” effort is lost when procurement favours large single-issue service providers.
  • When non-profits earn a profit, they put it back into services that not only benefit British Columbians, but ease the taxpayer’s load in funding those services. When international for-profits earn a profit, they give it to shareholders, in whatever country those shareholders live.
  • Bids were judged blind, but let’s be honest – who’s going to have the more attractive, showy bid, an international corporation or a non-profit? Big business also has the advantage of being able to lowball across far more extensive administrative support than is available to a BC community organization.
  • Procurement BC is undergoing a transformation in which social benefit and community is listed as Goal 1. Meanwhile Goal 3 (and there are only 4 goals) are processes that make it possible for smaller organizations to bid. The results of this RFP go against what procurement transformation is trying to achieve.
  • Lowballing was the order of the day, with successful proponents bidding at least 27 per cent under budget. A proponent who bid 10 per cent under budget based on actually working out the costs lost in every region they applied. Again, non-profits don’t have the option of spreading out their losses across a variety of programs, and so don’t have the same ability to lowball.
  • Board Voice is hearing many concerns that some of the new contract holders bid very low, raising the spectre that they will come back to the ministry for more money if they can’t make the contract work at the budget they committed to. That undermines the whole procurement process.
  • There was nothing in the 2016 evaluation of the EPBC programs to that point (2012-15) that indicated such a major change in the procurement process was necessary, or would create a better job-training program.
  • Massive for-profit employment agencies are active in countries like the UK, where everyone is just now realizing how wrong they were to give over social services to for-profit companies. In other words, we are following in the footsteps of failed strategies.

The government may believe it has no choice but to honour these contracts, although there are clearly many loopholes in the contract language that would in fact allow a total cancellation of awards. But if that is seen by government as impossible, at the very least we urge you to address the significant flaws in procurement that this RFP has brought to light.

Board Voice continues to think that this government does not want the outcomes that this RFP has wrought. Regardless, those are the outcomes that the process led to, and the results will be the same unless the process is changed to reflect the importance of community connection, past performance, and the many “extras” that non-profit providers bring to a contract that strengthen and reinvest in community.