Procurement
November 22, 2013

When process trumps principle

Kudos to the President of the Treasury Board for announcing that, effective October, departments must post more detailed and enlightening information about their contracting activities on their websites. About time: it has been eight years since the original adoption of disclosure, and since then the information available has been of limited practical value.

But the new reporting is based on Treasury Board recommendations and gives organizations broad discretion as to how they will implement. The Board suggests that they move to Board-recommended approaches, but Section 4.2 of the Guidelines on the Proactive Disclosure of Contracts sets out how the various data elements are to be reported. Seven guidelines give departments a choice: follow the TB recommendation or do something else. High school math says that this means at least 128 possible approaches, and each organization can make its own decisions.

The Guidelines also say that “(t)o provide consistency to the public, it is recommended that departments …move towards the recommended reporting standard over time.” Reverse-engineering that sentence, it says that following the Guidelines as written and making department-level choices does not provide consistency.

How does this vast scope for decision-making and widely-differing approaches help? If the Treasury Board is so committed to principles of fairness, openness and transparency, why did it not come out with a mandatory standardized approach? Would it not have been a clearer demonstration of the government’s commitment to say, “Here is how every department must do it”?

Kudos also (albeit belated for an April decision) to Public Works and Government Services Canada (PWGSC) for expanding the idea of bidder debriefings to include feedback sessions to bidders when a competition has been cancelled. As government procurement becomes more complex and the opportunities for contracts decrease, any helpful information that may increase a given supplier’s chances of winning contracts is a step forward.

But a glossy PR document prepared by PWGSC trumpets with obvious pleasure that the department achieved five out of its eight procurement service targets for 2011-2012. The targets relate to three functions: acknowledging receipt of requisitions; providing clients with the assigned procurement officer’s name and coordinates; and awarding contracts.

Why quibble? The Contracting Policy says that: “The objective of government procurement contracting is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people.” The PWGSC standards relate to process – transactions. They in no way address the clearly-stated results expected.

Surely when procurement is supposed to be about results, PWGSC should be setting standards for achieving those results. Does it not make more sense to set standards for and assess performance against what happened after a contract was awarded: was it delivered on time? Within budget? To required quality standards?

In the cases above, we see opposite sides of the same coin: Treasury Board’s broad statement of principle (fair, open, transparent,) is diminished by waffles on the process to support and achieve it. PWGSC’s focus on transactions is totally isolated from the results (another way of saying principles) of those transactions.

The problem arises when there is an imbalance between the goals to be achieved (principles) and the steps to be taken to achieve them (process and transactions). Years ago it was referred to as the distinction between rules-based and principles-based approaches to procurement. The two are quite different, and exclusive reliance on one or the other promises strange and, too often, unfortunate results.

This is not unique to procurement. Recently it has appeared in such diverse areas as off-shore banking, the custody and care of prison inmates, and sources of monies for MPs. There seems to be a trend toward an environment where people believe that by simply following all of the rules they are meeting their obligations to the public.

At that point, process has achieved dominance and principle goes out the window. The situation was put succinctly by a lawyer to a witness: “You were so focused on procedure and policy, it trumped common sense…[Was it not] a triumph of organizational policy over common sense and human decency?”

What, then, when compliance with the rules is not sufficient to meet the principle that the rules were put in place to support? We need clear statements of policy and principle; clear rules to work toward those goals, and a clear understanding that those in public service are accountable for complying with both.

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