Thank you, Mr. Beaulieu. Mr. Bromley.

Thank you, Madam Chair. That’s all the questions I have. I appreciate the Minister’s commitment. I would look forward to any information he could provide on that.

Like I said, I believe it was done early to midterm in the 16th Assembly, if my memory is correct, which

there are no guarantees. Thank you.

Thank you, Mr. Bromley. Next I have Ms. Bisaro.

Thank you, Madam Chair. I have a question on this item as well. It also refers to the item under community wellness and social services. In this particular one with the dietary, laundry and housekeeping contracts, we are catching up to what the actual expenditures are as opposed to what we are budgeting. This is not the first time that we have run into these kinds of requests in a supplementary appropriation. So I’d like to know from the Minister if he can tell me – we always seem to be in a catch-up situation, we always seem to be granting these requests to top up contracts or top up the expenses of contracts after the fact – is this something that is standard practice and why do we do that. Thank you.

There hasn’t been any target investment in the amount of $632,000 that’s already been approved for 2013-14 in ongoing. As we look at improving and having a process that better reflects the concerns of the Legislature, I give the Member acknowledgement of her interest in this issue both in health, but across

government, forest firefighting, for example, of making the base more reflect the reality of the operation as opposed to having to come back. As we identify these areas, that’s what we’re attempting to do going forward here. Thank you.

Thanks to the Minister for those comments. I would like to say that I appreciate that we’re going in this direction. I think it is the right way to go.

I’ll ask the question and the Minister can confirm when we get to the section, but I’d like to know whether or not there’s an increase to the base for the Charlotte Vehus Group Home and Billy Moore Assisted Living Group Home contracts when we get to that section. It’s the same principle and my questions apply to both of those. So that’s all I have. Thank you, Mr. Chair.

Mr. Chairman, when I get to that question, I will answer yes. Thank you.

Thank you, Minister Miltenberger, for saving the committee time. Health and Social Services, operations expenditures, health services programs, $1.212 million. Is committee agreed?

Thank you. Health and Social Services, operations expenditures, supplementary health programs, $6,000.

Thank you. Health and Social Services, community wellness and social services, not previously authorized, $1.385 million. Mr. Moses.

Thank you, Mr. Chair. If anybody remembers, this was a big issue that we brought up when the contract was actually being awarded, and it went out for tender and we had two contractors come back with bids, and we had a northern contractor and a southern contractor. There was a lot of mix-up. The northern contractor initially won the bid, then he ended up losing out because of the Business Incentive Policy that the NWT promotes and somehow the southern contractor won this bid.

What we have before us now is that this southern contractor is coming back to this government and asking for an extra $850,000 to do the programs and services that are provided. When we first saw this supp, it raised questions, obviously, right from the start.

I’m not sure if this is the usual practice of government, to start providing supps to contractors after they’ve awarded the bid. It kind of gets me wondering that we might have contractors out there who are lowballing the bid to win the contract and then when they find out the contract is awarded, then they come back to the government and we

find, possibly, excuses to give them the extra funding to run those programs when we have northern contractors up here who provide northern services, understand the northern economy, understand the buying and selling of northern products and yet we went south on this one.

I want to ask the Minister if he could explain to me how this southern contractor won the bid and yet is coming back to us, not even a year later after being awarded this contract, and asking for an extra, I noted this $850,000 for that one specific one with the Billy Moore Group Home. How much money is being put towards the Billy Moore Group Home that they’re asking for extra costs, and how that happens when we had a northern contractor who initially won the bid and possibly had a lower contract number at the same time? Thank you, Mr. Chair.

Thank you, Mr. Moses. For that we’ll go to Mr. Aumond. Sorry, we’ll start with Minister Miltenberger.

Thank you, Mr. Chairman. With your indulgence, I’ll ask Minister Beaulieu to speak to the background issues related to this contract. Thank you.

Thank you, Minister Miltenberger. Minister Beaulieu.

Thank you, Mr. Chairman. This is not an increase in costs as a result of switching the contractors. The breakdown is that the Charlotte Vehus shortfall is $547,000, Billy Moore is $303,000, for a total of $850,000 for both homes. It’s a 2012-13 this year. It’s not substantially higher than any other year preceding up until 2012-13.

I’ll just run through some numbers. There was $1.422 million in 2009-10 and then $1.38 million, $1.45 million in 2012-13 and those were the other. So it’s not all of a sudden jumped up by that amount.

What’s been happening is that the authority has funded this and has put themselves into a deficit with funding both of these homes in previous years. So the Billy Moore went from $683,000, $696,210 and then this year $686,000. So there’s not a substantial jump. It is just a steady growth and sometimes it goes up, sometimes it goes down.

But what’s been happening, like I indicated, the two contractors were doing this and each year the contracts were signed and then its deficit funded, essentially, and the Beaufort-Delta Health and Social Services Authority, as the House knows, goes into a deficit on an annual basis. This forms part of the deficit this year.

We’re trying to deal with the budgeting issues across the board on all health and social services

authorities. So this supplementary is $850,000 to just bring the budget up to where it should be.

Thank you, Mr. Beaulieu. Mr. Moses.

Thanks for the explanation. If Members recall, this was a big issue for me when I was dealing with it, but speaking to the contractor that lost the award, there was a stipulation in the contract that if he hadn’t spent certain dollars in areas that he had signed during the contract, he had to give money back to the authority and he was doing that. So now we’re basing our contracts based on a deficit. That doesn’t make any sense, and if he could give a little bit more explanation how we award contracts based on our authority’s deficit. Can I get just a bit more clarity on awarding contracts based on deficit? Thank you.

Thank you. It’s an award, it’s an RFP process. Through the request for proposals we determine which is the best value to the authorities and it’s awarded based on that. So this deficit funding, essentially what happens is when the health authority has a contract that they have to continue to run these two homes almost like a non-discretionary funding, in essence there’s just no possible way that we could get the costs from running these two homes from approximately $2.1 million down to $1.2 million and expect to continue to run these two homes. So this money is put in for that.

As I said, previous years this formed part of the accumulated annual deficit for the Beaufort-Delta Health and Social Services Authority. It had to be done and we had to continue to operate this. So it formed part of the accumulated deficit.

Thank you. In regard to the Charlotte Vehus Home, that was Parkland services, I believe, that was running that program. For somebody to run that program for the amount of years that they have, you’d think that the contractor would bid his contracts based on previous years’ expenditures, and now they’re coming back to us for over half a million dollars. I can see maybe $100,000, but coming back for over half a million dollars to continue to run the same programs and services that they’ve done for years doesn’t make sense to me. Now we’re awarding them a contract where they’ve actually come back to us for over $300,000. Under that award, is it next year that they’re going to come back to us for half a million dollars, maybe more?

This gets back to where I’m feeling that contractors are low bidding this government to win contracts, and only coming back for supps afterwards to do the programs and services. I’m getting the same type of frustrations when this whole process went through and we did it in the House months ago, and I’m very frustrated to see this before us again, and frustrated that it comes in a bundle under a

supplementary appropriation act like this, where we have to approve everything together and this is part of that area as well.

The Minister did mention that they determine their contracts based on the best values. Is that value in dollars or value in services and programs? Can he explain what he means by value?

Thank you, Mr. Moses. Before we go to Mr. Beaulieu, we’ll allow Minister Miltenberger.

Thank you, Mr. Chairman. What is before the House is really to cover a base adjustment to a contract cost that has been absorbed to this point by the Beaufort health and social services system that, as the Minister has pointed out, has helped contribute to their significant deficit, which is now in the neighbourhood of over $4 million.

The contract, as the Minister pointed out, was let. The contract prices have been fairly consistent. What has reached the breaking point, similar to the discussion we just had about the Stanton and the kitchen and laundry services there, costs have been absorbed in the system and they’re no longer able over time, due to inflation and other pressures, to absorb those costs that have come forward to recognize that there’s a base adjustment required to cover off the costs so that the Beaufort-Delta Health and Social Services Authority does not just continue to run up a significantly increasing deficit. That’s the financial background.

In terms of the question of value that the Member has asked, I’ll ask, once again, Mr. Chair, with your agreement, to have Minister Beaulieu speak to that.

Thank you, Mr. Miltenberger. Yes, for final comment, we’ll go to Minister Beaulieu.