If the intent of a municipality is to explore the possibilities of effective and efficient procurement through the adoption of a more strategic approach, an emphasis should be placed on taking proactive measures to improve the purchasing function.
It is not sufficient to rely on only those measures that should be employed to prevent things from going wrong. It would be time well spent to concentrate initially on conceptualizing an overall proactive approach to the procurement function.
Very often when procurement programs perform poorly, the problems with those programs can be traced back to an early failure to concentrate the efforts of the procurement staff on clearly identified goals.
Declarations by newly created government entities and by newly elected governments that they are committed “to effective management that ensures fairness, transparency and fiscal prudence” in the conduct of procurement are almost universal. Sadly, after a few years of actual performance, it is very rare to be able to identify any actual comparative improvement in performance relative to other Canadian public authorities.
Purchasing management is systematic when it pursues either one goal or a coherent, integrated package of consistent goals. It follows that one of the most effective tools a purchasing professional brings to the table when assisting in a purchasing project is the ability to identify clearly the goals of the project. At least in the case of major procurement efforts, each procurement project should focus on a stated goal, which should exactly describe what the project is to accomplish.
The project description should employ action words such as “design,” “build,” “implement” and the like. The goal should be limited to those essential elements of the project that communicate the purpose and the outcome expected.
It is axiomatic that the overall project and the interim goals must be attainable. On the other hand, “attainable” is not a synonym for taking the easy, time-worn path.
In a review of large private sector companies, studies have found improved performance in the purchasing area (e.g., through working more effectively with suppliers) has led to improvements in the time and cost associated with project design, development, manufacture and distribution.
Development times have been slashed by as much as 40 per cent, inventory turns have increased from six to over 50 a year, and the cost of purchased materials have been reduced by between 15 and 35 per cent.
Many of the recent initiatives in the public procurement area have had the objective of trying to spend money more efficiently as their principal goal — but the better ones have also taken into account a further goal of facilitating delivery of programs and services to the public.
So, in discussing federal government initiatives for securing “Better Value for Canadians,” the former Minister of Public Works and Government Services, Scott Brison stated:
“My department provides services that are common to all federal government departments and agencies — services that include real estate management, goods and services purchasing, information technology, as well as translation and consulting and audit functions. We are essentially the ‘back office’ of government, and it’s critical we do our job effectively so other departments can focus on their roles of serving Canadians. Our strategy involves improving the way we purchase goods and services on behalf of the government, better managing our property and taking fuller advantage of information technology.
“First, smarter buying can make a huge contribution to better efficiency. We will save $2.5 billion over five years by maximizing our purchasing power and consolidating what we buy for government departments.”
Some procurement projects are far more ambitious than others and involve criteria of success far beyond the simple matter of trying to spend money more wisely.
A realistic project may push the skills and knowledge of the people working on it, but it should not break them.
Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
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