German firm to develop new Nunavut airline procurement strategy

Aircraft from Nunavut’s two biggest airlines, First Air and Canadian North, parked on the tarmac in Rankin Inlet. The GN has just awarded a new contract to a German consulting firm to re-evaluate its medical travel and duty travel contracts. (FILE PHOTO)

The Government of Nunavut has issued a contract to a German consulting firm to help develop a new procurement policy ahead of the territory’s next medical and duty travel contracts.

The GN put out the request for proposals earlier this summer, looking for an aviation specialist to analyse its options ahead of its next contract deadline in September 2019.

The $698,000 contract was awarded Sept. 1 to Lufthansa Consulting, a German firm affiliated with a group of companies that include the well-known airline of the same name.

The pricey contract award indicates the GN is looking to save money down the road; the territory estimates the value of its combined medical and duty travel at between $60 million and $65 million a year.

A 2010 study found that medical travel—broadly defined as when Nunavummiut are required to travel outside their home communities for health-related appointments—and duty travel represent about 36 per cent of the territory’s airline market, although it’s higher in some regions.

As per the terms of reference included in Nunavut Airline Procurement Strategy RFP, the territorial government wants to weigh the pros and cons of combining both medical and duty travel within a single contract, as separate contracts or with no contracts at all.

“What would be the impact if there were no formal contracts for medical travel or duty travel, and the GN were entirely reliant on the free market,” the RFP’s terms of reference posed.

Regardless, the end goal, the RFP notes, is to provide “the best value government operations and to all Nunavummiut.”

The GN also wants to explore the potential advantages of issuing contracts by region versus a territory-wide approach.

The content of the contract itself is confidential, a GN spokesperson said; while proposals submitted to the government in public tenders are not typically disclosed.

But the report and strategy to emerge from the process is widely expected to inform the next territorial government’s approach to commercial, scheduled service across the territory. Nunavummiut go to the polls to elect new MLAs on Oct. 30.

Following research and rounds of consultations with communities and stakeholders, Lufthansa Consulting is expected to issue a final report to the GN by July 2, 2018.