November 14, 2012

Government procurement and the public trust

Procurement Perspectives | Stephen Bauld

Pick up any major newspaper these days and it is very clear that one obvious goal of any government is to improve accountability.

One scandal after another has us all wondering if the process of government procurement will ever improve with respect to construction projects.

In my 40 years of working in the procurement field, I have never seen so many problems connected to the way that the overall government procurement process is conducted.

Trying to deal will all these issues one at a time is even more frustrating for all of us, both as contractor and government procurement manager.

I feel that we need to encourage management efficiencies and help government achieve its policy outcomes while ensuring that the procurement process remains fair, open and transparent.

These objectives are becoming more difficult each month due to non-standardized tender and RFP documents that are so risk adverse that it makes them difficult for contractors to bid.

However, it is a mistake to focus on just one goal such as risk transfer alone.

The objectives that must be served by public sector procurement are numerous and procurement decisions are multi-faceted. The result is that trade-offs are inevitably required.

For example, while government strives to maximize competition and obtain the best price through putting procurement contracts out for open tender, the process of participating can be so cumbersome and cost prohibitive that the supply base is actually reduced.

Similarly, while managing risk is critical, it has to be balanced with new and better approaches to providing services to citizens, in which some risk is inherent.

Generally, imposing a higher degree of control over government procurement processes might seem appealing. Nevertheless, shifting the discretion of the vast majority of the public procurement professionals, who conduct themselves appropriately is not beneficial.

Complexity, risk and specialized application are not served well by a one-size-fits-all model of procurement.

A principle-based approach allows for the empowering of a culture of innovation, initiative and improvement.

Professionals can apply principles to situations not dictated by rules or procedures. It can also be argued that a more efficient utilization of resources, physical, financial and human, can offer some room to maneuver within budgetary constraints while maintaining current (if not high levels) of social protection and public service.

In public procurement, among the steps that need to be considered are measures that result in simplification and streamlining that lead to the creation and exploitation of economies of scale in procurement.

We also need to look at a more effective overall balance of the risks associated with particular types of procurement. The quality of goods, services, and construction supplied to a municipality needs to be better monitored and evaluated.

Quality, reliability and integrity of service should not be pursued with excessive preoccupation with the lowest price.

A more efficient method of procurement may well require an improvement to municipal management information systems. A balanced focus must be placed on results as well as on proper adherence to process. Also, a satisfactory approach to the procurement of goods and services in the public sector must be based upon and consistent with the corporate culture of proper public administration.

All organizations, whether public or private sector, ought to be expected to conduct their operations in a lawful manner, and all risk condemnation and rigorous scrutiny if they fail to do so. What sets the public and the private sector apart is that in the public sector, the integrity of the process is a justifiable end in itself.

To restore public trust in the government procurement process many changes to the system need to be reconsidered and adopted.

Stephen Bauld, Canada's leading expert on government procurement. He can be reached at stephenbauld@bell.blackberry.net.

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