Procurement
September 5, 2014

Winds of change: Defence procurement and contracting for services

Last spring the government adjusted its approach to defence procurement, creating new oversight, coordination and input processes to increase the efficiency and effectiveness of defence procurement.  Initiatives such as the creation of the National Fighter Procurement Secretariat and the mandating of an Independent Review Panel to ensure a rigorous and impartial evaluation of the possible CF-18 replacement aircraft may, in the short and long term, result in long-overdue improvements to defence acquisitions.

I like that the government did not pursue the path advocated by a number of seasoned procurement veterans who argued that defence procurement be consolidated into one organization. They said there has to be, first and foremost, an understanding of, and agreement on, what defence procurement is all about before a careful review to ensure that the appropriate organization(s) is/are in place to achieve the desired results.

Changing organizations for an undefined role risks the kind of disruption that took place in Public Works and Government Services Canada (PWGSC) not so many years ago: a new operating and service model was implemented, reversed only a couple of years later, and in the process the jockeying for position and power was intense and destructive. Learn from history.

Time will tell whether the steps taken will result in “better” defence procurement. Certainly broad public disclosure of those processes will do much to demonstrate that the government does make decisions that, in the words of the Review Panel, are “well informed, evidence-based…[and] in the public interest.”

Time will also tell as the government continues its program of formal professional certification of its procurement community. It should be self-evident that in the hugely complex world of federal procurement the more and better the procurement community is qualified, the better the results of procurement activities are likely to be.

Speaking to people at the May workshop of the Canadian Institute for Procurement and Materiel Management (CIPMM), I heard enough comments to indicate that the certification program is actively rolling ahead. In the coming years operational managers who need procurement to meet their operational responsibilities and objectives can look forward to working with a growing cadre of procurement specialists well versed in the newest learning and best practices. Bravo!

That line of thinking took me back to my time heading the group in PWGSC responsible for the delegation of contracting authority. Our core role was supporting our minister in the delegation of authority to procure goods to other ministers. We were also involved in the review of delegations of procurement authority within PWGSC. On occasion we talked to the Treasury Board Secretariat about the limitations imposed by the Board on the general authority of ministers to contract.

Those latter contacts were in the context of ministers responsible for other departments seeking an increased contract value limit. I understood the Secretariat’s interest in considering such requests was to make certain that the requesting minister and department/agency had the necessary procurement expertise and internal control mechanisms in place to ensure that such higher value procurements would be well and properly carried out.

It occurs to me that the more individual departments spend the time and money to have their procurement staff complete the certification program, the more justification they will have – if they so choose – to approach the Board for a higher contracting limit based on the demonstrable fact that they would have a critical mass of fully qualified procurement professionals.

We could then see a shift in federal procurement, particularly for services. Ministers already have quite high limits in this regard – $2 million for fully competitive processes and $100,000 for sole-source – so apparently they are already deemed properly equipped to handle complex transactions. Add fully certified staff, and increasing those limits would seem a relatively painless advancement.

Pursuing this would not be an easy road. The Secretariat’s Community Management Office responsible for the certification program notes an anticipated attrition rate of as high as 50 percent in the professional procurement, materiel management and real property communities over the next five to seven years. New staff will be recruited, but even if there are enough people and even if they are permitted to take the required time for the certification training, it will still take time.

Will it happen and will it work?

If defence procurement can change (as it must), and services contracting also (as it can), what of goods? Doesn’t the discussion of contracting limits apply equally to goods? Well, goods are a whole other situation – and the reason for next month’s topic.

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