It is always wise to understand how a municipal council can affect the procurement process. When contractors have an issue with the way bids are evaluated they do have the option to attend council meetings with the concerns they want to address related to staff decisions.
The enactment of municipal bylaws and the approval of purchasing procedures and policies are among the few aspects of public procurement that directly involve municipal councils in the process.
I have reviewed this issue in past articles, but I will reiterate again that municipal councils need to be far more realistic in the directions they give to staff through procurement bylaws and related policies and resolutions.
The current approach to municipal procurement rules could benefit from some significant rethinking. While there is clear merit in the idea that, so far as possible, municipal procurement should be conducted in a manner that is fair, open and transparent, on the other hand, the vital interests of the municipality as a customer must be protected. The goal of being fair to bidders cannot be allowed to trump the obligation of municipal staff and council to be fair to the taxpayer.
Municipal rules should make very clear to whom the paramount duty is owed. Thus, the most important step for a council to take is to make sure in all matters, staff understands that their role is to put the interests of the municipality first.
Obviously, the legal rights of others must be respected — even declarations of pious sentiment such as the need to deal fairly with municipal suppliers are acceptable from a proper governance perspective, provided they are clearly subject to the limitation that staff are required to act honestly, in good faith and with the interests of the municipal corporation.
Suppliers dealing with a municipality have no reason to expect otherwise. On the contrary, private corporations would understand such duty is no more than the corresponding general duty to which all officers of a business corporation are subject.
Beyond suggesting this enhancement of focus, the following eight recommendations may be made:
- Bylaws should be internally consistent and clearly written. Any subsidiary policies or procedures should be consistent with the bylaws they are intended to support.
- When considering draft bylaws presented by staff, council should ask the legal and purchasing departments to provide some illustrative “what if” scenarios, to illustrate how bylaws would be applied in common purchasing situations. When considering imposing bylaw restrictions on staff, a similar analysis should be carried out.
- Possible conflicts of underlying policy should be identified and guidance given as to how such conflicts are to be resolved.
- Staff should be encouraged to prepare a comparative cost of in-house supply whenever such a measure might reasonably be considered to be a viable option.
- Municipal procurement rules should generally be guided by the principal that municipal staff should put the interests of the municipality and its residents ahead of any other competing interest. The bylaws should make clear those interests are best served by securing best value for money.
- Care should be taken before incorporating into purchasing bylaws rules and procedures that are intended to further socio-economic policies that have little direct bearing on municipal operations.
- In order to encourage respect for the purchasing scheme they create, and to reduce the risk of abuse, council should consider itself bound by the municipal bylaws, policies and procedures unless the interests of the municipality are to be disregarded. Such cases are very rare.
- Any departure from the requirements of the municipal purchasing bylaw from prescribed policies and procedures should require an immediate report to council together with an explanation. Generally, unless the circumstances render it impractical, prior council authorization should be required for any such departure.
Stephen Bauld is a government procurement expert and can be reached at email@example.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.