Message from the Procurement Ombudsman

Creating Trust

The position of the Procurement Ombudsman was created by amendments to the Department of Public Works and Government Services Act enacted pursuant to the Federal Accountability Act. I was appointed the Ombudsman Designate in September 2007 and my appointment as Procurement Ombudsman was confirmed in May 2008. At that time the Office of the Procurement Ombudsman became fully operational with the coming into force of the Procurement Ombudsman Regulations.

In 1977, I joined the Office of the Auditor General. I spent the next 28 years working in one of the most respected national audit offices in the world (and learning from four Auditors General). I was also privileged to be the first Chief Risk Officer in a federal department, mandated to ensure that all of the operations of Public Works and Government Services Canada were carried out in a fair and transparent manner.

"The Government of Canada is committed to taking appropriate measures to promote fairness, openness and transparency in the bidding process for contracts with Her Majesty for the performance of work, the supply of goods or the rendering of services."
– Financial Administration Act, s. 40.1

The new role of Procurement Ombudsman gives me the opportunity to apply all of my professional training and experience to a uniquely challenging mandate, through which I see the very real possibility of establishing an office that will contribute to better procurement, better government and better value for all Canadians.

Over the years, procurement has become increasingly complex. There are more than 15 Acts of Parliament, a number of Regulations, and over 35 different policies related to procurement. There are also many key players involved, with various roles and responsibilities – including Treasury Board, operating and program departments, the Department of Justice, and Public Works and Government Services Canada as a common service organization for contracting. The ultimate accountability for ensuring the integrity of the procurement process rests with the deputy heads of departments and agencies.

If departments and agencies don't have the necessary expertise or authority to enter into a specific contract – usually those of high risk or dollar value – then Public Works and Government Services Canada contracts on their behalf. It handles about 20% of the 300,000 contracts entered into by the federal government every year, on average, valued at approximately $14 billion.

My Office will, in cooperation with other stakeholders, provide ideas to improve the federal procurement system. Starting with our commitment to smoothing out difficulties faced by suppliers and government officals whenever we can, we seek opportunities to reassure all stakeholders in federal procurement – suppliers, departments, central agencies, parliamentarians – that the procurement process is working as it should. Directed by the government's commitment to ensuring that procurement is fair, open and transparent, our business model provides a collegial and cooperative approach, to ensure the willing participation of all stakeholders in the ongoing search for excellence in public procurement.

When we all do our part successfully, the federal procurement system will work better for all stakeholders. Procurement will be faster, and better; there will be fewer complaints; it will be readily apparent that it is in fact fair, open and transparent; and Canadians will receive better value for money and better service delivery.

As soon as my office was created, suppliers started to contact us for assistance. Those contacts set the stage for the development of our organization, and have guided the work that is the subject of this Report.

Over the years, the Government has undertaken several reviews of procurement and developed recommendations to improve the system. Although some of these recommendations have been successfully implemented, many have failed to come to fruition. In fact, there are those who suggest that overall federal procurement is more cumbersome now than it was ten years ago. Few would argue that the system cannot and should not be improved.

The mandate given to my office has uniquely placed it to help the government achieve that improvement. We are not auditors required to focus on identifying and reporting on deficiencies. We are not a tribunal or court dealing with points of law and regulations and seeking to apportion responsibility.

The role of an ombudsman, in its broadest sense is to help.

The formal power of an ombudsman rests officially in the authority to investigate complaints of wrongdoing and review the practices of government institutions. At the same time, ombudsmen, having arrived at conclusions and apparent solutions to problems, generally lack the authority to make or enforce specific changes and improvements: they can only make recommendations. Some may see this as a weakness. For us, it has been a source of strength.

The real power – the true value added potential – of an ombudsman is to facilitate and assist communications between parties with issues to resolve, and to help the parties find solutions to problems. Results are achieved not by the application of mandatory enforcement, but through the power of persuasion.

The goal of this office is to use that power of persuasion to contribute to an ongoing process of change, so that all Canadians have confidence in the federal procurement system.

For us to succeed, we must work cooperatively with all stakeholders in the procurement environment. We must be seen by all concerned as credible independent agents of change. Professional in our approach and well-informed on procurement issues, we must show in every aspect of our work that we are strictly neutral – neither lobbyists for suppliers nor apologists for government. When we make recommendations, whether transactional or on a more systemic basis, it must be evident that we are proposing reasonable, well thought-out, doable and affordable solutions.

These are the principles that have shaped our standards, systems and processes for handling individual supplier concerns. To date, in almost every case, suppliers have been satisfied with the results of our interventions. That same satisfaction is demonstrated within the public service. Without exception, we have been well received in our dealings with departments. Deputy Ministers and central agencies in particular have been very supportive, and I want to take this opportunity to thank them.

We believe that this is because we have emphasized and demonstrated from the beginning our knowledge, professionalism and neutrality. We have made it clear that we are seeking solutions with long-term value and sustainability. We have created an atmosphere of trust.

Having created this positive environment, we believe that we have increased the likelihood that our recommendations will be broadly accepted. That being said, if we allow our actions to be guided only by the complaints we receive, we risk being too narrowly focused. If people see us dealing only with limited transactional problems, there will be an inevitable growth of reluctance to become involved as time progresses.

Instead, we have to be proactive. That is why since our inception we have placed major emphasis on outreach communications. My senior staff and I have crossed the country, speaking in particular with suppliers and public servants. We have emphasized that we are here to make things better: we see a broad consensus that change is possible, and that the key to success is cooperation.

Part of that cooperation – and one of the reasons why trust is so important to our success – is a willingness on the part of stakeholders to share with us what the real problems and issues are. From what we have heard and from our experience, we do not think the system is broken. We do believe there are several things in the system that need to be strengthened. The vast majority of government contracts do not result in any significant problems. I want to share with you what we have heard to date: it provides the context for the detailed information in this first report and helps to set the stage for the work we will be doing in the coming years.

Suppliers are telling us that in some cases:

• they have doubts about the contract award process: they are not certain that when the government has published its decision-making criteria and process for a specific procurement, those criteria will be applied in a consistent and fair manner, and that the government will in fact make the contract award based solely on those criteria;
• part of that distrust may come from the inconsistent way in which the government debriefs unsuccessful bidders. Those bidders often cannot find out, in terms that will be useful to them, why they did not win a contract;
• the government takes too long to pay its bills: slow payment can dissuade otherwise-competent suppliers from seeking government contracts;
• standing offers are a significant concern, particularly when their use is seen to reduce supplier access to government business;
• communications between suppliers and government authorities are inadequate – the right information is not being exchanged at the right time; and
• generally, suppliers are having difficulty finding relevant information on how to do business with the government.

Government authorities have an equally wide range of issues they would like to see resolved:

• there are not enough properly-trained people to do the job;
• those who are in place see the required processes as being excessively timeconsuming and leaving little room for professional judgment or innovation;
• implementation of government rules is inconsistent from organization to organization, even within individual departments;
• efforts to streamline procurement processes through the introduction of automated working tools can be frustrated by the complexity of the "solutions;" and
• generally, there are simply too many rules to follow, and overemphasis on compliance with the rules is taking precedence over achieving real results.

As you will see in the body of this report, we have not been able to address all of these concerns in our first year of operation. But we hope to do so in the course of my five-year mandate, and this will be detailed in future reports.

Procurement is not an objective in itself. Rather, it is a means through which the government can achieve its policy objectives, and departments can achieve their operational objectives of delivering services to Canadians. The very nature of the procurement process is to be helpful and supportive. When it works well, programs achieve what they were designed to achieve and are delivered on time and within budget because the government is working with the best possible suppliers.

We should all be concerned about the capacity constraints faced by the government procurement community. We have met many qualified and competent public servants who are doing their best to provide Canadians with high-quality service, but who are being frustrated by the context in which they must work.

Also, nothing bothers me more than knowing that there are highly qualified suppliers in the market – large and small – who have simply given up on dealing with the government because of the perceived inefficiencies and perceived lack of fairness of the system.

But there are some very visible and welcome signs of improvements. The Auditor General noted in Chapter 3 of her December 2008 report on PWGSC's contracting for professional services that 95% of contracts had been awarded in accordance with the rules designed to ensure fairness, openness and transparency. The Office of Small and Medium Enterprises (OSME), created to help small and medium enterprises do business with the government has gained a lot of respect in small supplier community. Senior management in all departments, especially Treasury Board Secretariat and Public Works and Government Services Canada, are making a lot of effort to reduce the plethora of rules and processes which have slowed down the procurement process.

As the Procurement Ombudsman, it is my job to help strengthen the trust and confidence of all Canadians in federal procurement. To do this, we will collaborate with the other organizations in the federal government that are also working to improve the system, to identify areas for improvement, to assess them carefully in collaboration with the supplier and government communities, identify effective practices and seek to develop workable and affordable improvements that can be implemented to the benefit of all stakeholders.

I and my staff are dedicated to that process of improvement. In this report and through the coming years, we are committed to showing you the results of that dedication.

Shahid Minto MA, LL.B, CA,
Procurement Ombudsman

Date modified:

2018-11-01