Procurement
December 3, 2012

Breaching a bastion of bias

Over the past 40 years federal procurement has incorporated many measures to eliminate bias in the selection of government contractors. Clearer and unwired descriptions of work, evaluation criteria structured for objective and measurable application, strictly limited communications between potential bidders and departments, and the presence of the CITT (Canadian International Trade Tribunal) have all contributed to a high (albeit not perfect) level of confidence that a procurement process will be fair.

It is time get rid of one of the remaining prevalent inequities: the words that say, “there could be appearance of conflict of interest.”

Conflict of interest has no place in government procurement. Seeking to stamp it out by dealing with appearances, the government uses arbitrary and undisclosed measures that are totally opposite to the accepted standard for procurement that requires full disclosure of all of the rules of decision.
 
The problem is that the processes leading to decisions on appearances are vulnerable to at least seven types of subjectivity.

Start with could – so many meanings, so dependent on context. I learned it as a word of positive potential, but in today’s government it has taken on the role of bogeyman. Saying that something “could” happen is akin to promising disaster leading to unfair subjectivity.

Then, appearance. It has two meanings: what something looks like or coming into view. The second in this context makes no sense: talking about avoiding conflict of interest or its coming into view is redundant. So we are talking about what something looks like – which isn’t necessarily what it is. Two old adages could apply: “appearances can be deceiving” and “where there’s smoke there’s fire.” Depending on which one an organization follows, there can be quite different and unpredictable consequences.  

Appearance is sometimes replaced by perception. We perceive things all the time, but what we perceive is not necessarily true. Further, people can “perceive” a situation in quite different ways: witness the recent Quebec election and the ensuing observations by the media and politicians as to what it might mean for the future of our country. It depends on your vantage point, perhaps, but in the end different perceptions of the same situation mean more possibility of less than objective, certainly inconsistent and inevitably unfair decisions.

Then there is the person who makes the decisions. Making a decision about “appearance” requires careful thought. The government of Canada’s Treasury Board Contracting Policy tells us that procurement must “…stand the test of public scrutiny in matters of…prudence,” which is the use of reason, skill and good judgement. These are individual characteristics: the resulting decisions will also be individual. Every decision, therefore, is likely to be different, and overall government decisions on “appearance” cannot be objective.

And, there is that person’s perspective. The moment that the person injects any element of personal status – could the decision have an effect on position or career? – that person is in an actual position of conflict of interest. Interesting: a person in an actual conflict of interest making a decision on a case that could appear to be a conflict….

If the people have to be looked at carefully, what about the process? The government routinely includes in its calls for bids a clause giving itself the broad right to reject a bid if a bidder has been involved in any situation of conflict of interest or appearance of conflict of interest. It further takes to itself the sole discretion to determine whether a conflict of interest or appearance of conflict of interest exists. Nice: discretion, with no rules set out as to how and on what basis the decision may be taken. Not objective…

Finally, consider the likelihood that decision criteria will be influenced by the situation and history of the organization. If an allegation of conflict of interest is the first one received by that organization, it may be resolved quite differently than if the organization spends much of its time in the media defending the quality of its procurement activities. If you are the most recent “apparent” culprit, the roof is likely to fall on you.

In closing, I return to the concept of “appearance.” Are decisions really being made on the appearance of conflict of interest, or on the how the organization and the government will “appear” when its decisions are made known? If the latter, then looking good risks trumping sound business decisions. For the terms “open and transparent” mean just that, and dealing with perceptions or appearances of conflict of interest has a way to go.

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