The relatively short terms of office for municipal councils leads to an undue focus on the short term picture.
Many changes to council from the municipal election will bring new councillors on board that may have very little experience in government procurement.
The problem of short term focus is especially serious when dealing with long duration procurement, as for instance, in the case of a building.
The full life cost is the total of all expenditures made to acquire, construct or modify, and operate and maintain it over the course of its service lifetime. It also includes its decommissioning cost.
As I have mentioned over the years, what is initially cheaper is not always the lowest cost item over the full life of the purchase. On the other hand, it does not always follow that the most expensive is always better. In making cost comparisons, one must compare like against like.
Smaller municipalities may often feel tempted to purchase consumer grade equipment, which will invariably have a lower initial cost than apparently comparable business grade equipment. New council members need to understand things like the usage demands of the municipality are sometimes very limited, reliance on consumer equipment may suffice, but considerable care needs to be exercised.
Full life costing is not inimical to the use of the tender-based system so beloved in public procurement, but it does complicate its use.
Generally speaking few municipalities seem to have policies that appreciate the distinction between the tender and RFP process. New council members should have some sort of basic training on the procurement policies as part of the process of a newly elected official. The reason for this is the fact that there is some reason to believe that the RFP process is being used in cases where it is not suitable.
Ideally, the policies could and should provide greater guidance in this area, in order for new council members to understand the difference between the two procurement options. In addition, there are some types of purchasing that are not suited to tenders (e.g., emergency purchases, sole source arrangements, and many types of co-operative purchasing with other public authorities).
A one hour seminar from a procurement professional should be conducted to new members of council in the early days of being elected to avoid any misunderstandings.
It would also be a good idea for new members to review the purchasing policies and procedures prior to this training session and be prepared with any related questions about the procurement process.
So many major issues in every municipality are directly related to procurement and so little time is given to council in general to fully understand how the entire process actually works.
I have been working with many councils over the years, even writing things like a code of conduct for municipal council. I am always struck by how little training and knowledge municipal councils have been given.
As we all know, so many major issues come up pertaining to procurement problems every year, so one would think government procurement training would be mandatory for council. However, it is not mandatory, resulting in complicated issues becoming even more complicated by the lack of understanding of the process.
I have been in many meetings with municipal council members who are in the second or even third term that have no idea of how the system works, or even take the time to investigate the rules and regulations of government procurement.
My suggestion to all newly elected officials in any government position is to take it upon themselves to ask for some training in the general operations of the procurement systems.
A couple of hours of homework in this area may save a new councillor added pressure from the public when voting for the award of municipal contracts.
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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