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Procurement Perspectives: Policies and procedures were written to be followed

Stephen Bauld
Procurement Perspectives: Policies and procedures were written to be followed

Within the materials management context, risk management to a large extent is dealt with through the formulation of comprehensive policies and procedures to govern the manner in which the procurement function is executed.

All organizations must have procurement policies and procedures to govern their purchasing activity.

In this respect, municipalities are no different.

Consistent with the highest principles of proper corporate governance, the purchasing bylaw or other procurement policy of a municipality should incorporate:

  • Clarity of object: The policies must afford a clear sense of purpose to direct the manner in which the authorities conferred under those policies are to be directed. One of the benefits of harmonizing procurement policy with overall municipal strategy is that it provides such clarity of object;
  • Clarity of mandate: It should be clear where responsibility lies for each aspect of the procurement program;
  • Clarity of authority: It should be clear who has authority to requisition, who has the authority to approve requisitions and who has the authority to place orders and approve invoices; and
  • Public accountability and awareness: There must be full disclosure of the rules governing and awareness. There must also be full disclosure of the rules governing municipal procurement and some method of verifying compliance with those rules.

The ultimate goal of these policies should be to develop a cohesive and co-ordinated approach to procurement in which all members of the municipal administration are singing the same song, with the same words, to the same tune in the same key.

Prevailing practice is to include in the purchasing bylaw or policy an express statement that all municipal employees are required to comply with all applicable bylaws and policies of the municipality and any relevant federal or provincial law.

To derive the maximum benefit from governing policies and procedures, it is highly advisable that both staff and suppliers are made aware of the rules that apply to a given contract. Such rules must be clearly stated.

There must be some authoritative method provided of resolving any ambiguity or closing any gap that is identified once the contract competition begins.

For any public entity, compliance with policy and procedure is more than half the battle. Making sure staff and suppliers are up to date on the latest changes will cut down considerably on the number of problems that arise.

To do so, the policies and procedures of the municipality should be widely disseminated within the organization. Training should be given as to their meaning and application.

As discussed above, the policies and procedures governing municipal procurement are based on the premise that to as great an extent as possible, every step in the process should be open, transparent and fair.

If it is not practical to follow an open procedure (e.g., because of the low value of the transaction), the procedure that is followed should be conducted in accordance with pre-defined rules and be defensible in the circumstances.

The emphasis thus falls on the monitoring of compliance with rules.

The operating premise among all municipal staff should always be that compliance with established policy and procedure is mandatory.

No doubt, the rules in question will sometimes be found deficient. Therefore, some mechanism should be in place for evaluating and revising them on a regular (perhaps even ongoing) basis as new problems are identified.

Nevertheless, until such time as the rules are changed, compliance remains essential.

When departures from rules are essential in the circumstances, they should be formally recorded as to why the departure is being sanctioned. It is never acceptable for an individual municipal employee to decide to go off on a frolic of his or her own.

Compliance with policy and procedure does much to maintain public accountability and trust in municipal procurement.

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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