On the need for Departmental Chief Procurement Officers - Canadian Government Executive
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June 18, 2018

On the need for Departmental Chief Procurement Officers

Procurement modernization has been a Government of Canada (GC) policy priority for the last decade: regrettably, with limited results.  In recognition of the criticality of transformation, the Prime Minister’s 2015 mandate letter to the Minister of Public Services and Procurement Canada (PSPC) directed her to (1) modernize procurement practices so that they are simpler and less administratively burdensome, (2) deploy modern comptrollership, and (3) include practices that support economic policy goals, including green and social procurement.

The choice to assign this mandate to the Minister of PSPC in itself raises an interesting dilemma: how does one determine who is ultimately responsible for the modernization of the procurement function, when procurement policy is owned by the Treasury Board of Canada Secretariat; strategic procurement and category management are the responsibility of PSPC; and accountability for operational procurement is left to line departments?

The complexity and vastness of the GC organization poses daunting challenges to the establishment of one clear leadership position, responsible and accountable for public sector procurement policy and operations. A model must be implemented that can harness the critical factors essential for successful transformation in support of a modern procurement function while WRESTLING WITH the complexity inherent in the federal system.

Specifically, the position of Departmental Chief Procurement Officer (DCPO) should be created, to achieve the priorities set out by the Prime Minister, as well as modernize the procurement function overall; lead procurement talent-management, and place focus on innovation and results. The issues identified in the mandate letter are relevant and pressing: it is to whom the tasks are assigned, and provision of appropriate enablement to deliver, including permanency of the positions, which will determine the feasibility of success.

The current environment is optimal – the opportunity for real transformation must be seized. A government keen to deliver measurable improved outcomes, combined with an appetite within the Public Service to modernize, work smarter, and deliver world-class services, offers a true opportunity for change. The creation of one departmental authority for procurement will enable the transformation required to deliver on results for Canadians, as well as deliver continued excellence in the procurement community in the future.

What is a Departmental Chief Procurement Officer?

For the purposes of this paper, a DCPO is defined as the principal public procurement official for a Federal organization. This position is responsible for setting a vision for procurement, including overall strategy and direction. In addition, a DCPO provides oversight and guidance to the function and ensures consistency in the application of policy, and its resulting operationalization. A DCPO directs talent and community management and is the champion for innovation and change within an organization’s procurement function. This position is responsible and accountable for operational procurement of goods, services and construction, in accordance with applicable federal laws, rules and regulations.

Rationale for Departmental CPOs in the Government of Canada

The rise of the CPO in most high-performing private sector companies, as well as forward-thinking public sector institutions, is a clear demonstration of the critical role procurement plays in enabling organizational success.  The CPO has become an essential strategic leader and advocate for greater operational effectiveness. The CPO model can be applied similarly to the public sphere as in the private sector, making an adjustment for the fact that private business is focused on the bottom line, while GC focus is on outcomes for Canadians. In addition, in an organization as vast as the GC, the benefits of the CPO position can be gleaned through the creation of DCPOs, with the same outcomes.

There is not one organization with the mandate or resources required to address GC-wide procurement issues, on both a policy and operational level. Within the Treasury Board of Canada Secretariat, the Office of the Comptroller General (OCG) serves as a policy centre but is not accountable for procurement operations. Public Services and Procurement Canada, while looking for guidance on operations, does not have the mandate to set standards for procurement processes GC-wide.

As a general rule, Departmental Chief Financial Officers are accountable for procurement in departments.  However, accountability for procurement operations follows various centralized and decentralized models where ultimate responsibility for planning, comptrollership, efficient operations, socio-economic objectives and community management is diffuse.  Unsurprisingly, most procurement modernization initiatives that fall under the responsibility of departments have not achieved desired results and it is unlikely that this will change under the current model. Appointment of DCPOs would facilitate resolution of this issue, and the problems inherent within, by consolidating accountability for procurement policy and operations under one position in each organization.

A potential first step would be to include a requirement to identify a Departmental official responsible for procurement in the new TBS policy on Assets, Projects and Procurements includes a requirement to identify a Departmental official responsible for procurement.  This step, along with existing best practice in like-corporate groups within the Federal government, should be used to design the DCPO structure within the GoC.  Similarly to the model implemented within the audit function, where Chief Audit Executives exist in medium and large organizations, DCPOs should be created in organizations with a substantial procurement footprint. DCPOs should be at the executive level and have a defined competency profile. DCPOs do not need to report directly to the Deputy Head, but do need to have direct access; additionally, DCPOs should have a dotted line functional relationship with the Comptroller General, similar to the CFO model within the GoC. A council of DCPOs should be created, to facilitate shared vision, and a whole of government approach.

It is important to note that appointing DCPOs is not a panacea; tremendous dedication to enabling the modernization of the procurement function is required.

Creation of the DCPO role is critical in driving the successful outcome of the following:

Standardization of Procurement Practices

The DCPOs would provide the required departmental oversight and guidance to ensure standard application of procurement processes and tools in federal organizations, resulting in decreased costs, reduced risk, and improved access for suppliers. Furthermore, such uniformity would lead to a greater ability to address multi-departmental issues, clear accountability for collecting GC-wide business analytics and support the implement modern IT tools and the use of a centralized repository of supplier information. Additionally, standardization could be leveraged to greatly enhance transparency, where the common tools and data would be a catalyst to open data, by being open-by-design.

Modern Comptrollership

The DCPO would serve as a focal point for issues that intersect policy (set by the Treasury Board of Canada Secretariat) and operations (undertaken by Public Services and Procurement Canada, as well as line departments and agencies), linking that which is implemented with the objective of procurement efficiencies (for example, the design of pre-competed tools such as standing offers and supply arrangements), to measurement of results achieved ( i.e. proof that said standing offers and supply arrangement did in fact effectively support GC operations and produce administrative savings). The DCPO would also facilitate GC-wide management of procurement-related risks.

A GC-Wide Approach to Talent Management

Provision of centralized leadership will buoy the struggling public service procurement community. Recruitment and retention continue to pose a challenge, resulting in a scarcity of resources, poised to be compounded by looming high numbers of eligible retirees. First, the management of the community of DCPOs would ensure that ensure that the Government of Canada identifies and develop its strategic procurement leaders.  It will also ensure that each department has a leader with responsibility for managing their procurement talent.  This will help address the issue of a meagre sense of shared community, the result of the function being fractured throughout the public service. Finally, he DCPO position would create a clear career path for procurement professionals and lend more credence to certification programs, which grapples with dismal enrollment rates.

A Focus on Results and Innovation

Finally, the creation of the DCPO positions would remove the systemic barriers that limit the procurement function’s ability to provide strategic advice, as well as safeguard the procurement function’s obligation to play the challenge function, without fear of reprisal. Equipped with clarified expectations, roles and responsibilities, procurement personnel, including those in executive leadership functions, would be better positioned to provide strategic advice based on comprehensive analysis, rather than limited to strictly attempting to uphold rules and regulations.

The Time is Now  

Previous attempts to transform and modernize public sector procurement have not delivered the expected results. Lessons learned have identified inadequate change management; deficient source of funds; lacking communication plans; underestimation of scope and scale of change required; and tools unusable by end users as contributing factors. However, there is one common denominator in past failed attempts: No one point of coordination, and no one source of holistic authority, the result of which is too many competing drivers and the wheel. Creation of DCPO positions will ensure that all stakeholders are progressing toward a common goal.

The need for procurement modernization, highlighted in multiple mandate letters, notably the Minister of PSPC, as well as the President of TBS in regards to measurement of results, is clear. A shift in focus is evident, demonstrated by initiatives aimed at renewal and transformation, such as the Treasury Board Policy Reset and the establishment of the new PSPC-led e-procurement tool. While this progress is encouraging, it is of critical importance to note that without a designated public procurement leadership positions in the Government of Canada, these modernization efforts are unlikely to succeed.

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