January 16, 2013
Procurement goes collaborative
Procurement Perspectives | Stephen Bauld
Every once in a while, as individuals, we stumble onto something that we connect with something else and create a new idea.
It’s a new way of doing something that is more efficient and contributes to the overall objective of continually enhancing processes and creating value.
This particular idea is really not new, but I wanted to convey it to you in a way that describes the benefits of collaborative procurement.
As we all know, our public infrastructure is critical to our socio-economic well-being.
Just to be clear, the need to procure and build public infrastructure won’t change. We need new roads, bridges and public buildings (schools and hospitals) and the infrastructure deficit referred to in many studies and reports has not gone away. It has, in fact, likely increased as a result of government underfunding over the past decade.
But, the systems and processes that underpin the procurement of these large, complex and risky assets need to evolve. I think what we are seeing is a slow evolution of the processes and the technology that will drive that change.
As we know, people are part of the equation and often it is difficult to coax people to embrace change, even when the benefits are articulated clearly.
From documenting requirements to varying contracting methods to alternative financing practices, the opportunity for improvement is always upon us.
What we are now seeing is evolution of our processes to be collaborative so as to support each other’s procurement objectives.
From a first principles perspective, we want procurement that is transparent and accessible as well as requirements, documentation and a bidding process that is open and fair. These can’t be sacrificed.
Collaborative procurement can best be illustrated when like minded individuals with similar needs combine resources to create a procurement network and leverage off each other to create critical mass, transparency and value for money. One such example of this is The Road Authority (TRA). It was initiated by the Ontario Good Roads Association more than a decade ago to bring together the resources of Ontario’s municipalities in the procurement of roads, bridges and other municipal infrastructure.
The TRA is an example of how collaborative procurement can benefit all stakeholders (government and industry) by sharing product source lists, standards and engaging each other in discussion about product successes and failures.
The authority also provides industry with a “gateway” to owners that have a need to review or pre-qualify their products. The overall process is too complex for this article, but it demonstrates the opportunity that is available to organizations with infrastructure procurement needs.
Initiatives such as this will get us to the next level in terms of procurement and it is my belief that we should be encouraging more initiatives of this kind.
It’s not about experiments, but well-structured projects that adhere to the principles of good public sector procurement practices and advance the use of people, processes and technology coming together in collaborative public infrastructure procurement. It can and is being done.
Ultimately, it is in the interest of both the government and its suppliers for the public procurement system to work well. In Canada we have attained a level of honesty in government contracting that is the envy of most of the world.
Nevertheless, there are serious problems with the process, which lead to frequent disputes and to significantly higher costs for governments then prevailing market conditions necessitate.
Government and its suppliers could benefit from learning to work together more cooperatively – as has been done in the private sector – to improve the quality and reliability of the supply chain. This general observation applies with respect to construction as much as to any other line of procurement.
Stephen Bauld, Canada's leading expert on government procurement, is a member of the Daily Commercial News editorial advisory board. He can be reached at email@example.com.
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