Canadian Government Executive - Volume 22

Figure 1.

The Classic Procurement Delivery Model Stage I and II

(or Contract ‘A’ and Contract ‘B’)

September 2016 //

Canadian Government Executive /

bles especially when budgets are at their

thinnest.

For more than a generation, the fed-

eral government procurement function

has been based primarily on a two-stage

model: Stage I (which is often referred to

as Contract ‘A’) being the intent to enter

into a contract, and Stage II (also referred

to as Contract ‘B’) being the execution and

award of the contract itself (see Figure 1).

Under the model of Contracts A and B,

as long as a project or program has avail-

able funding and supporting procurement

documentation, the role of the Contract-

ing group has been somewhat limited to

expediting contract requests efficiently.

Following the award of the contract,

contract administration is largely left to

project or program managers. Further

engagement with the Contracting group

seldom occurs unless modification to the

terms and conditions is required. Such

segregation of responsibilities within or-

ganizations makes it difficult to tie the

output of the contract to its initial intent.

With the emphasis within the Procure-

ment group often on expediency rather

than systematically measuring outcomes

of contracts, the result is a loss of focus on

results and accountabilities.

The true potential of Strategic Procure-

ment resides in a new notion: that of Stage

trategic Procurement, recognized

in recent years for its promotion

of intelligent decision-making

systems, is evolving again in the

present environment of Deliverology.

Strategic Procurement is now understood

to be a concept bigger than bulk buys and

opportunistic sourcing. Instead, it has

transformed into a strategy by which one

can not only plan procurements, but also

monitor, course correct and measure the

outcomes of contracts. Deliverology – an

approach that defines methods to achieve

the most important objectives, implemen-

tation of which will have the most sig-

nificant impact – is driving a fundamen-

tal change in the culture of the Federal

Government, embodied in a new concept:

that of Stage III (sometimes referred to as

Contract “C”).

Federal Government procurement

has historically been the subject of criti-

cism from suppliers, stakeholders and

the public, subject to comprehensive

external reviews and the introduction

of formalized oversight measures. The

2006 Gomery Commission report and

recent studies from the Office of the Pro-

curement Ombudsman have triggered a

change in corporate culture and a drive

for concrete actions to be undertaken to

achieve this.

The Government has been challenging

procurement groups across organiza-

tions to bring “smarts” to the process – the

words “strategic procurement” continue

to be a hot topic around management ta-

III (which could be referred to as Contract

‘C’). This third contractual concept forms

the foundation of a framework designed

to increase awareness and influence; the

ability to plan; the power to implement;

the tools to monitor; and the capability

to course correct. The resulting Strategic

Procurement Delivery Model affords a

unique opportunity to demonstrate real,

measurable progress through tangible re-

sults and improved outcomes.

Including Stage III in the framework

creates a key tactical tool: it returns the re-

sponsibility to the initiator of the contract-

ing action to account for the need for the

procurement and demonstrate added val-

ue to the Crown. In Contract “C” the pro-

curement intent and the resulting added

value become the central focus.

Adding Stage III formalizes the holistic

framework surrounding true Strategic

Procurement: a combination of Stage 1

and Stage 2, as well as the planning, con-

sultation, collaboration and understand-

ing of interdependencies within a given

procurement undertaking. Including

Stage III in the model demands an under-

standing of “the big picture.” The execut-

ing contract officer must be aware of the

moving pieces in the procurement mecha-

nism, and of how they fit together. It is the

sum of these pieces, the aggregate group-

Strategy

Strategic Procurement

in the Age of Deliverology

Jessica

Sultan

Claude

Miville-

Dechêne