The continued provision of government programs and services relies to a great extent upon the government’s ability to procure the goods and services that it needs to deliver those services economically, effectively and efficiently. Although the number of buyers will not increase in the average municipality overnight, steps can be taken at least to simplify the work of those who must carry the load. To maximize the effectiveness of the procurement process, municipalities need to use standardization and rationalization of the procurement process.
I often talk about increased collaboration and stress the need for municipalities to work more closely with each other, to improve their collective effectiveness and efficiency in delivering public programs and services;
Trade associations like the OBPA could act as a clearing-house for information, to allow municipalities to comparison shop, to utilize precedents by other municipalities.
Where possible, municipalities should explore ways to harmonize existing standing orders, rosters and similar arrangements. One possibility would be to coordinate such arrangements among several neighbouring municipalities to ensure effective access to a wider pool of talent at a more competitive price.
Explore opportunities for more collective procurement, to leverage the collective buying power of numerous municipalities, and to develop genuine expertise in relation to atypical procurement items.
However, even within the organization framework of a single municipality, there is often much that could be done to improve the level of teamwork in relation to procurement, and to overcome any silo mentality.
Most private sector purchasing managers would agree with the sentiment that procurement should be open, transparent and fair. On the other hand, they do not apply these concepts in the same manner as the public sector. Municipalities need to explore ways of carrying on an open system of procurement in the same way.
Government procurement cannot operate at its most effective and efficient when it is hidebound by strict rules and procedures that do not allow buyers to exercise common sense and judgment. Certainly, guidance is needed, and certainly controls need to be in place to prevent abuse, but it is not wise to take away basic business-making decisions from buyers and others involved in the public procurement process.
In any system of procurement that is dependent upon competitive bids or proposals submitted as a standard form response to a request for tender, quotation or proposal, it is essential to provide suppliers with specifications that are clearly written and precisely directive as to what the municipality needs.
The problem with far too many tenders and RFP’s that go out is that they are poorly written and highly confusing. As I have discussed previously, poorly written specifications lead to problems of evaluation and compliance determination. Such problems lead almost inevitably to dispute.
The reason for specifications is to serve as a basis for obtaining goods or services suitable for the municipality’s needs in a cost-effective manner. The goods or services in question should be specified at the proper level of utility and quality for the purpose intended in order to promote overall economy. The specifications should set out all required functional, performance, physical, design and other characteristics of a commodity or service and any other requirements such as certification, licencing, insurance, delivery, installation, inspection, testing, training, maintenance, and service support.
When it comes to “Procurement Options and Practices”, there is a tendency in drawing up specifications to dictate solutions rather than to identify problems to be solved or needs to be filled. This tendency undermines competition.
Contractors will tailor their bids to suit the specifications and will decide whether they can bid based upon the indications given in the specifications. Municipal procurement needs to be modified to allow suppliers to come forward with price-saving options.
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.