As I have travelled around Canada and abroad speaking at conferences about government procurement, the conversation often turns to the efficient utilization of resources.
When we look at the overall aspects of the procurement process including physical, financial and human resources, it often uncovers a bigger picture. Municipal procurement, as an example, can offer some room to manoeuvre within budgetary constraints while maintaining current (if not high levels) of social protection and public service.
I just read a great article in the February edition of Municipal World called Why RFPs Often Suck by John Lewis, who bids on government projects and is not a procurement person. He had an interesting set of eight solutions as to how to fix the problem and how to make the process better.
In keeping with this article from a purchasing perspective and in the public procurement context, among the next steps that need to be considered are measures that result in simplification and streamlining. This approach would lead to the creation and exploitation of economies of scale in procurement and a more effective overall balance of the risks associated with particular types of procurement.
I have always maintained the idea that the quality of goods, services and construction supplied to a municipality needs to be better monitored and evaluated. Quality, reliability and integrity of service should not be pursued due to excessive preoccupation with the lowest price.
Over many decades I have professed that a more efficient method of procurement may well require an improvement to municipal management systems.
With that approach is a balanced focus that must be placed on results as well as on proper adherence to process.
Having said that, a satisfactory approach to procurement of goods and services in the public sector must be based upon and consistent with the corporate culture of proper public administration. All organizations — whether public or private sector — ought to be expected to conduct their operations in a lawful manner and all risk condemnations and rigorous scrutiny if they fail to do so.
What sets the public and the private sector apart is that in the public sector, the integrity of the process is a justifiable end in itself. If government costs never come down; if taxes remain the same, great pride could be taken in a government approach to materials management that is scrupulously honest and self-evidently fair.
Even so, we take it as standard practice that municipal governments and other public agencies cannot be unconcerned with the bottom line. In a sense, municipalities are in competition with each other. Each of them seeks to attract business and residents to its own jurisdiction.
In such a competitive environment, attention to sound materials management practice is essential. An efficient procurement strategy will enhance the productivity of municipal operations, allowing the municipality to do more for its residents with the same tax dollars, or to reduce the tax burden and yet offer the same service. Since an efficiently run business can afford to pay more, city workers also benefit from enhancing the efficiency of municipal operations. As a result, staff turnover will decrease.
A key consideration in corporate governance is to ensure that corporate staff are discharging their office in a manner consistent with the strategic objectives set by the corporation's ultimate decision-making body.
Insofar as the setting of strategic goals directs the manner of expenditure, the identification of the goal is as much a matter of governance, as it is of policy formation.
Unfortunately, in many municipalities you see a breakdown between staff and council. This constant back and forth between the two parties is usually the root of most of the problems. Once council loses the respect for senior staff members, what follows as a rule spells the end of smooth sailing for any municipal contract.
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.