Attracting top procurement people to work for a municipality has become difficult over the years. The parsimony of most municipalities in recruiting, payment to procurement staff, and giving proper training reflects three major influences.
The first is the dire position in which many municipalities are currently situate. Obviously if the municipality has no money to pay more, it cannot pay more. The second is the widespread (although untrue) public perception, that municipal staff are underworked and overpaid.
While this view is mistaken, the views are expressed sufficiently widely that it cannot be ignored — for it colours any discussion of the subject of municipal financing. Whatever the case may be in other parts of municipal administration, this is certainly not true with respect to the municipal purchasing staff.
Across the country, municipalities serve as the purchasing training ground for other levels of government and for the private sector. Municipal buyers are overwhelmingly young (which translates to inexperience). As they advance in their careers, they migrate to other employers. They do this because the public sector pay is low, it benefits poor, its opportunities for advancement limited, and the quality of life substandard.
The third factor is the approach adopted by municipal human resources towards the determination of appropriate salary scales. The invariable practice among municipalities is to compare themselves to other municipalities. This is obviously not a suitable approach where municipalities are bleeding out their talented purchasing staff to other levels of government and the private sector.
Since they are major players in their local markets, delivering a wide range of programs and services, municipalities need top notch procurement departments. However, with a human resource approach characterized by such features, they are most unlikely to get one and even less likely to retain it. Complicating matters further is the fact that, due to tight funding, municipalities have lost much of their high level professional expertise, preferring instead to contract out for consulting services.
This has watered down the ability of municipalities to manage their more complex procurement process. Construction affords an obvious example of areas in which critical expertise is lost. At one time municipalities had large engineering departments and in-house architects. Such professionals are now largely gone. When a large construction project comes along, there is no in-house staff to devote to the project. The only option is to use expensive consultants.
A further human resources-related concern is that too often in the municipal sector, the voice of the purchasing department — if it is ever heard at all — is heard through many filters for it to be given sufficient attention. In the private sector, the senior purchasing official is now usually a vice-president reporting directly to the corporate chief executive officer.
As a member of the senior management team, the vice-president of purchasing is directly involved in all senior level decision-making, and is directly consulted with respect to corporate strategic initiatives. The ranking of procurement represents its importance to overall corporate success.
In contrast at most municipalities, the chief purchasing officer is at the manager level: ranking below the city manager, the commissioners (general managers), directors and deputy directors. Thus, at a typical mid-sized Canadian city, the officer in charge of spending $200 to $400 million per year is ranked in the fourth or fifth tier of management.
Most municipal bylaws direct the purchasing manager to require municipal staff to conform to the city’s purchasing policies and procedures. However, the client department representatives with whom the purchasing manager must deal include not only directors or deputy directors, but also the odd commissioner, all of whom outrank the purchasing manager.
The result of such a low ranking is to exclude the views of purchasing from any direct involvement in critical decision-making at the senior officer level.
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.