Getting more bang for the procurement buck

Jenkins report finds quick traction with government

Even Tom Jenkins was surprised at how quickly he got the federal government’s attention.

Mr. Jenkins released his report on defence and security procurement in the middle of February, making the case that the government should better leverage its purchasing power on military goods to improve the domestic economy.

A little more than a month later, the governing Conservatives announced in the federal budget they would be implementing the main thrust of his recommendations.

“That’s quite remarkable,” said Mr. Jenkins, the executive chairman and chief strategy officer of business solutions firm OpenText, in an interview. “That’s about as responsive as you could ever ask for.”

He said it will take several years to see if the full scope of his vision will be realized. But it nevertheless shows that he and the federal government are on the same page.

The budget endorsed one of the main ideas in the report: companies hoping to sell to the government need to include a plan for benefitting Canadian industry.

“You have two choices. You can either spur on that behaviour that you want by subsidizing, or you can spur on that behaviour by being a demanding customer in a competitive environment,” said Mr. Jenkins.

It’s a controversial proposal. Some observers warn that placing Canadian economic benefits on par with getting value for money will only lead to more taxpayer dollars going to equipment that isn’t necessarily first-rate.

However, those involved in the industry say the government is only now catching up with other countries around the world.

“Every other western nation tries to strike a balance between getting maximum value for money with its capital spend and getting long-term economic development benefits,” said David Luxton, the chairman of Allen-Vanguard, one of the largest Ottawa-based defence firms.

But even though the government has endorsed the report’s main ideas, there are still several details to be hammered out.

One of those is Mr. Jenkins’s idea of picking specific sectors to support. He wants the government to develop six key industries in which Canadian companies would be world leaders.

He said the ideas he came up with – arctic and maritime security, protecting the soldier, command and support, cyber security, training systems and in-service support – were just suggestions. What’s important is that the government settles in advance the sectors that it wants.

“We can’t be all things to all people,” said Tim Page, president of the Canadian Association of Defence and Security Industries. “We’re not an economy that has a market large enough to do that.”

The governing Conservatives are still looking at which industries they plan to focus on, the budget said.

This will no doubt create some controversy as Canadian companies seek to have their sector included.

“There’s always risk when government wants to decide what sectors should be successful,” said Mr. Luxton. “In this case I think they’ve got it right.”

 

 

SIDEBAR: Public Works pitches bid update pilot project

The department of the federal government that handles defence procurement purchases, Public Works, is testing out the possibility of allowing companies to update their bids after submission.

The experiment came about after Public Works had to cancel the original solicitation for its Integrated Soldier System Project because none of the bids were compliant, wrote Lucie Brosseau, spokesperson for Public Works, in an e-mail.

Now bidders will be allowed to clarify what they’ve submitted or add more information as part of the ISSP project.

“The aim of this two-step bid evaluation method is to help prevent bids from being declared non-compliant due to bidders’ mistakes or missing information,” wrote Ms. Brosseau.

The department is allowing those changes to take place on a pilot basis only as part of the procurement for the ISSP project, but the government isn’t ruling out the expansion of the initiative in the future if it’s successful.

“The results will be closely monitored and taken into consideration in our efforts to continuously improve the way we procure,” wrote Ms. Brosseau.