Minister, industry leaders pick apart federal procurement process at Ottawa event

Judy Foote
Judy Foote

Representatives of both the public and private sector came together at Ottawa’s Westin Hotel on Thursday to break down the frustrating features of federal government procurement and to make suggestions for a more modern process.

The event – hosted by the Information Technology Association of Canada – was opened by Public Services and Procurement Minister Judy Foote, who acknowledged the need to change how the government purchases services from Canadian businesses.

She cited examples of 8,000-page responses to requests for proposals from small and medium enterprises as unreasonable and frankly wasteful.

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“It needs to be simpler, less burdensome,” she told the audience, echoing the details of her mandate letter from Prime Minister Justin Trudeau.

She added that rapid turnover of procurement officers has resulted in a lack of continuous expertise in administering the process on the government side, and that incorporating incentives for diverse and environmentally minded procurement was a priority.

Ms. Foote also reminded the industry representatives in attendance, which included Ottawa-area SMEs, that the government is a powerful customer to have. She says the government makes $23 billion in purchases each year, and that its procurement process “has the ability to shift markets … (and) launch businesses.”

The federal government is the largest purchaser of goods and services in Ottawa. According to OBJ’s Book of Lists, the government spent $2.89 billion on contracts in the National Capital Region in 2015-2016.

Yet, ITAC president and CEO Robert Watson says the current procurement system is not structured in a way that makes government contracts easily accessible to SMEs.

“It’s a practicality thing. When you’re a small or medium-sized enterprise, you’ve got your head down everyday … you don’t have a lot of extra hands on deck,” he told OBJ in an interview. “The easier we can make it for them to start participating in acquiring government business, the better we are.”

Mr. Watson echoed Ms. Foote’s comments that too much effort is expected of SMEs applying for government contracts. He said there’s a need for smaller projects and contracts specified for businesses with 500 employees or less to make the procurement process accessible to smaller companies.

Kirsten Tisdale, Ernst & Young’s national leader for government and public sector, delivered a keynote address in which she laid out several priorities for changes in government procurement.

She says the rigidity of the procurement process is a clear concern, but there are also attitudes that need to shift at the top. Instead of a focus on the lowest price for a contract, the procurement should focus on value and outcomes, she said.

“Process is important, but outcomes are what matter most,” she said.

She also provided global case studies for examples that would improve the Canadian system. In the United Kingdom, for example, the government has set up an innovation hub where businesses can come forward with their own ideas to be refined and then funded by government officials. The result, she says, is that company stakeholders are leading and taking ownership over the process.

In British Columbia, where she works for E&Y, the model is less of a vendor-purchaser relationship and more about long-term partnerships between government and providers.

Mr. Watson says this event is a first of its kind, where representatives from Public Services and Procurement Canada, Shared Services Canada and the Treasury Board are all meeting with more than 250 SMEs and industry leaders. He says he is optimistic that the government is listening and is now committed to improving the process.

“This is a very positive step towards making it federal government procurement better.”

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