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QEC Contracting, Procurement, and Leasing Activity Fiscal Year 2017

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QEC Contracting, Procurement, and Leasing Activity Fiscal Year 2017 Contracting, Procurement, and Leasing Activity Fiscal Year 2017-18 Prepared by Qulliq Energy Corporation’s Finance Department January 2019 Table of Contents Overview ..................................................................................................................................................... 2 Procurement Objectives ............................................................................................................................ 2 NNI Considerations .................................................................................................................................... 3 Structure of this Report ............................................................................................................................. 3 Contracting, Leasing, & Procurement – Three Year Average Comparison ............................................. 4 Contracting, Leasing, & Procurement – NNI Status ................................................................................. 5 Terminology .............................................................................................................................................. 6 Section 1 Service Agreements ................................................................................................................ 8 Section 2 Contracts ................................................................................................................................ 9 Section 3 Air Charters ............................................................................................................................ 11 Section 4 Purchase Orders .................................................................................................................... 12 Section 5 Leases ..................................................................................................................................... 14 Appendices ............................................................................................................................................... 16 Appendix 1 – Service Agreements ............................................................................................................ 17 Appendix 2 – Contracts ............................................................................................................................ 20 Appendix 3 – Air Charters ........................................................................................................................ 21 Appendix 4 – Purchase Orders ................................................................................................................ 23 Appendix 5 – Leases ................................................................................................................................. 34 Qulliq Energy Corporation Page 1 Overview Qulliq Energy Corporation (QEC) is wholly owned by the Government of Nunavut and operates in compliance with the Qulliq Energy Corporation Act. QEC generates and distributes electrical energy to Nunavummiut through the operation of 25 diesel generation plants in 25 communities. The Corporation also provides mechanical, electrical, and line maintenance, as well as support services, from three regional centres. QEC supports the Minister responsible for Qulliq Energy Corporation on regulatory and intergovernmental issues, attends to corporate objectives provided by legislation, and has the mandate to coordinate all contracting, procurement, and leasing activities to fulfil the operational requirements of the Corporation. QEC is pleased to present its annual report on contracting, procurement and leasing activities for the 2017-18 fiscal year. Procurement Objectives QEC is committed to ensuring fair value and ethical practices in meeting its contracting, procurement, and leasing responsibilities. This is accomplished through effective policies and procedures aimed at: Obtaining the best value for Nunavummiut; Creating a fair and open environment for vendors; Operating with integrity and transparency; Maintaining current and accurate information; and Ensuring effective approaches to meet QEC’s operational requirements. The Corporation prepares and tables this report in the Legislative Assembly to support the integrity and transparency of its contracting, procurement, and leasing activities. With the release of this information, QEC is bound legally to safeguard competitive information which may prove harmful if disclosed to the public. QEC strives to fully comply with the reporting requirements of its contracting, leasing, and procurement policies. The information in this report is obtained from procurement, leasing, and operational records and is deemed to be accurate and may differ from actual payment data. Qulliq Energy Corporation Page 2 NNI Considerations The Corporation has been complying with the Government of Nunavut’s Nunavummi Nangminiqaqtunik Ikajuuti (NNI) Implementation Act in the awarding of contracts since it came into effect on April 1, 2017. NNI adjustments provide an incentive to encourage Nunavut and Inuit owned businesses to respond to QEC contract proposals and tender opportunities. This report provides the distribution of contracts awarded to companies for 2017-18 in accordance with their NNI registration identification (NNI status). The registration IDs are: NTI / INUIT: Inuit owned business registered with Nunavut Tunngavik Incoporated; NNI: Government of Nunavut registered business (not registered with NTI); Local: Locally registered company within the community in which the work is being performed (must also be NTI and/or NNI registered to qualify as local); or Other: None of the above. For reporting purposes, a company that is both NTI and NNI registered is classified in the summary information of this report as NTI. A company with dual registration (NTI and Local) or triple registration (NTI, NNI, and Local) are classified as NTI. Companies without NTI or NNI status are grouped as “Other”. Structure of this Report This report is divided into a number of sections which summarize all contract, procurement, and leasing activities for the Corporation for 2017-18: Summary Reports Terminology Contracting References Report on Service Agreements Report on Contracts Report on Air Charters Report on Purchase Orders Report on Leases Detailed listing of all contracts, purchase orders, and lease agreements Qulliq Energy Corporation Page 3 Contracting, Leasing, & Procurement – Three Year Average Comparison Contracts awarded for the purchase of capital assets and purchase orders issued for diesel fuel account for a significant portion of QEC’s annual contracting and procurement activity. The majority of contracts issued in 2017-18 were the result of work performed at a number of power plants and issued through QEC public tendering and RFP processes. Air Charters Service Agreements Property Leases Production Fuel Purchase Orders Contracts 2015-2018 Three Year Average Contracting Summary 2017- 2018 Three Year Average Type Number Value Number Value Air Charters 56 10% 860,638 1% 48 7% 948,324 1% Service Agreements 65 11% 4,158,254 5% 89 14% 4,642,098 4% Property Leases 119 20% 4,285,143 5% 114 17% 4,089,293 4% Purchase Orders 293 50% 8,438,573 10% 354 53% 10,643,985 10% Contracts 24 4% 14,237,957 18% 33 5% 34,619,209 32% Production Fuel 26 5% 49,172,829 61% 26* 4% 52,899,326 49% Total 583 100% 81,153,394 100% 664 100% 107,842,235 100% * Adjusted, see explanation on page 14 Qulliq Energy Corporation Page 4 Contracting, Leasing, & Procurement – NNI Status The following chart provides the distribution of contracts awarded to companies in 2017-18 in accordance with their NNI and NTI status. For QEC, the “Other” status primarily is for contracts for work related to the replacement of equipment and the maintenance of QEC’s power generation plants. NNI NTI PPD Fuel Purchases Other 2017-2018 Contracting Award Status NNI Status 2017/18 Type Number Value NTI / Inuit 154 26% 23,239,406 29% NNI 5 1% 427,400 1% PPD* 25 5% 41,784,029 51% Other 399 68% 15,702,559 19% Total 583 100% 81,153,394 100% The above table reflects the fact that 2017-18 was the first year that the NNI Implementation Act was applied in the awarding of contracts at QEC. *Production fuel purchased from the Petroleum Products Division (PPD) of the Government of Nunavut is technically not a status, however since it is a significant portion of QEC’s procurement activity, it warrants separate disclosure. For 2017-18 based upon annual operational fuel requirements, approximately $41.8M was estimated for fuel purchases from PPD, and $7.4M was estimated to be purchased from the Uqsuq Corporation, a registered Inuit firm. Qulliq Energy Corporation Page 5 Terminology This listing is intended to assist the reader with definitions for QEC’s technical procurement and contracting terms used in this report. Goods: refer to contracts for purchased goods that are primarily entered into by QEC using a purchase order. Services: refer to contracts for the purchase of services and are primarily entered into by QEC using a service agreement or service contract. Service Agreements: are considered contracts for the delivery of services other than the provision of goods and construction. Contracts: in the QEC context, contracts are used primarily for the purchase of capital assets (assets acquired for construction projects and large scale installations) and are awarded by invitational or public tender. Request for Tenders (RFT) and Public Tenders (PT):
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