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Procurement Perspectives: Factoring political dimension into municipal procurement

Procurement Perspectives: Factoring political dimension into municipal procurement

When talking about major capital construction for a municipality it is safe to say you must factor in the political dimension. Although the importance of council supervision in the municipal procurement process is clear, difficulties arise when the political side of council thinking begins to cloud the discharge of its fiduciary responsibility.

As we have all seen, it is because of the political dimension in which they must operate that municipal purchasing authorities often find themselves facing a wide range of conflicting priorities in dealing with purchase issues.

The need to manage public money frugally is generally accepted.

Yet at the same time, municipalities will often be expected to play a leading role, both by the general public and elected officials, in such areas as environmentally conscious spending and other worthy causes. For instance, with respect to so-called green consumption, it is sometimes argued that municipal authorities can reduce environmental impacts significantly by managing their own administrations, property and the services and amenities they provide in an environmentally friendly way.

By so doing, they can act as a role model and perhaps modify the behaviour of other socio-economic actors including citizens, private institutions and companies.

This capacity is augmented when the municipal authority demands a commitment to green consumption from its own suppliers. In other words, municipalities can use their economic clout to encourage environmentally benign products since they are among the largest single buyers in the domestic market.

On occasion, results bear out these beliefs.

For instance, recycled paper became a standard office supply in European countries due to the cumulative demand for this product on the part of municipal authorities across the EU.

By creating a demand for the product, municipalities gave the suppliers of recycled paper a significant competitive edge.

Numerous city governments across the United States have passed bylaws to prohibit the purchase of clothing made under sweatshop conditions and require suppliers to disclose to the public the locations of the factories where clothes are made.

In May 2002, Toronto became the first Canadian city to move in this direction. Similarly, with the deregulation of electricity supply, some Ontario municipalities have expressed interest in the purchase of “green” electricity.

The difficulty with the latter is the scale of investment required in order to bring such energy to the world.

Nevertheless, caution is necessary for initiatives of this kind.

No doubt there is considerable value in seeking to use municipal purchasing power to advance socially worthwhile causes.

Unfortunately, there often appears to be no end to such causes.

While the environment would no doubt rank high on most social priority lists, so too do such considerations as fair trading, fair wages, equal opportunities, advancement of historically disadvantaged minorities and preference for local sources of supply.

In many cases, it may be found the advancement of one cause can only take place at the sacrifice of others. Problems abound where no clear basis is articulated for resolving conflicting policy objectives.

As I have said before, municipal procurement is fundamentally concerned with the expenditure of public funds. Public service is a public trust.

Citizens expect public servants to serve the public interest with fairness and to manage public resources properly on a daily basis.

Fair and reliable public services create a favourable environment for businesses, thus contributing to well-functioning markets and economic growth.

To maintain public confidence in the integrity of public administration and the political system, it is essential that the highest ethical standards be maintained with respect to such expenditure.

It is critical that staff and council work together to achieve common goals for the municipality.

Stephen Bauld is a government procurement expert and can be reached at Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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