Madam Speaker, Return to Written Question 20-12(6) asked by Mr. Whitford to the Minister of Public Works and Services, concerning the annual costs since implementation of the business incentive policy.
The business incentive policy is applied on all GNWT contracts and provides a 15 per cent or 20 per cent adjustment for NWT or local content respectively. In most cases, an award is made to the low bidder. In some cases, an award is made to a company that is not the lowest bidder. This would happen when the company has greater NWT or local content and therefore receives a larger BIP adjustment. The extra cost to award to this company equals the difference between the amount of the award and the amount of the lowest bid. This extra cost is referred to as the BIP premium.
The Department of Public Works and Services maintains records on construction, maintenance and services contracts awarded based on the BIP and the applicable BIP premium. during the past four years, for which information is readily available, the BIP premium has been as follows:
1994-95: total number of awards made based on BIP, five; total BIP premium, $327,402; total value of awards made based on BIP, $10,115,617; total BIP premium, 3.4 per cent; percentage of all awards made to NWT firms by value, 92 per cent.
1993-94: total number of awards made based on BIP, three; total BIP premium, $454,371; total value of awards made based on BIP, $6,813,839; total BIP premium, 7.2 per cent; percentage of all awards made to NWT firms by value, 89 per cent.
1992-93: total number of awards made based on BIP, seven; total BIP premium, $168,315; total value of awards made based on BIP, $2,803,308; total BIP premium, 6.4 per cent; percentage of all awards made to NWT firms by value, 84 per cent.
1991-92: total number of awards made based on BIP, nine; total BIP premium, $631,080; total value of awards made based on BIP, $14,107,254; total BIP premium, 4.7 per cent; percentage of all awards made to NWT firms by value, 82 per cent.