Message from the Procurement Ombudsman

It is a pleasure to submit the 2011-12 annual report for the Office of the Procurement Ombudsman (OPO). This report represents a summary of the activities undertaken by my office during my first full year as the Procurement Ombudsman.

My primary focus in 2011-12 has been on broadening the Office's outreach activities so as to raise awareness of the Office, the services it provides, and to listen and build relationships with key stakeholders. These outreach activities have begun to pay dividends as they have revealed two unexpected areas of concern shared by suppliers and federal procurement personnel:

• Vendor performance; and
• The disparate nature of procurement documents.

Suppliers have raised the issue of firms that continue to obtain federal contracts despite being known within the community for providing inferior goods or services. Some question why the government continues to do business with these types of firms. Likewise, procurement officials have voiced frustration with executing lengthy procurement processes only to be faced with the prospect of having to accept a winning bid from a known underperforming supplier. Some departments have recognized this exposure and introduced vendor performance policies, which articulate the measures to be invoked when dealing with sub-standard suppliers. These policies have not however, been introduced by all departments and agencies and there has been varied enforcement of the policies among organizations where they do exist. This fragmented approach within the federal government is allowing suppliers, identified as underperforming by one department, to successfully bid and be awarded contracts from other departments. Suppliers and government officials alike acknowledge the need for a more uniform approach to deal with suppliers who are incapable or unwilling to consistently meet federal government standards.

Similarly, suppliers and government officials have raised concerns about the use of disparate procurement documents and associated processes across, and in some cases within, departments. Typical examples include the variation of requirements contained in documents such as bid solicitations and contracts to procure similar goods and services, the variable criteria for evaluating bids for comparable solicitations and the unpredictability of decisions regarding when contracts are competed versus sole- sourced. Small and medium-sized supplier sentiment is quite simple: the level of effort required to adjust to the different departmental approaches for supplying virtually the same service is costly, time-consuming and often not worth the effort. Some suppliers have gone as far as to identify this issue as a barrier to doing business with the federal government. Similarly, procurement personnel have expressed frustration with the inefficiency involved in preparing slightly different procurement documentation for essentially similar services. It is not uncommon for these officials to cite the many potential benefits (and savings) that could be derived from greater standardization of key procurement documents and tools. While the supplier and procurement communities recognize that departments need a certain degree of discretion in customizing procurements to meet their particular operational requirements, both communities have identified an untapped opportunity for greater efficiency and mutual benefit through increased standardization.

Training is a subject that I highlighted in my first annual report and one that bears ongoing focus. Over the past few years, strides have been made to further professionalize the procurement function. In addition to mandatory training courses, an optional certification program was introduced in 2006 targeting federal procurement officials. In my discussions with some of these officials, I have been impressed with the level of understanding that exists for the need to continuously strengthen the procurement function. As enablers to roughly $15B to $20B in annual procurement expenditures supporting the delivery of programs and services to Canadians, procurement officials recognize the need to obtain the highest possible level of training and accreditation. Yet these officials have also shared frustration with the administration of the program. Six years after the program was introduced, 26 of the approximately 3,200 procurement specialists working in the federal government have been certified at the program's first of three levels, and none have  received complete program certification.

As the federal procurement process is not the exclusive domain of procurement personnel, having trained, qualified procurement specialists is only part of the equation. Non-procurement personnel, namely, program managers, share and often have an equal responsibility for purchasing decisions. Decisions on what goods or services are required to deliver programs and services to Canadians almost always begin with program managers. These decisions often have an impact on the procurement process. So while there is a need for a continued emphasis on training and certification of procurement officials, there is an equal need for a sustained effort in providing procurement training for program managers.

Two other issues that I raised in last year's annual report were a) supplier reticence and b) Advance Contract Award Notices (ACANs).

• Last year I reported that some suppliers contacting my office were reticent to disclose the names of departments with which they were having procurement concerns for fear of being excluded from future business opportunities. To better understand this issue, we re-examined case files specific to these suppliers. Our objective was to ascertain the source of the reluctance. We were successful in contacting 12 of the 15 suppliers that , in raising issues with this office, were reticent to disclose the names of departments with which they had procurement issues. Of the 12 suppliers, 11 indicated that their reluctance was based on either a perception or a suspicion that complaining might jeopardize future business opportunities. Some rescinded their comments entirely. As an added measure in my attempt to understand this issue, I sought and received the assistance of the Canadian Federation of Independent Business. My office collaborated with the Federation in jointly contacting suppliers to solicit their views on this issue, among others. The interviews of a relatively small sample of micro and small business representatives were informative in identifying other reasons for not complaining, such as suppliers not having the time to dwell on unsuccessful bids and not knowing to whom complaints should be directed. However, while neither these interviews nor the case file reviews revealed specific examples to substantiate that suppliers are indeed reticent to complain about particular departments for fear of being excluded from future federal contracting opportunities, the interviews did reveal that this perception may still exist.

• In discussions with a complainant who raised concerns with my office in 2010-11 regarding the award of four contracts for professional services using Advance Contract Award Notices (ACANs), the complainant claimed his concern was simply the "tip of the iceberg" in the improper use of ACANs. The allegation led my office to monitor posted ACANs for a six month period in 2011-12. The results of this monitoring exercise, outlined in the body of this report, once again raise questions about whether the policies governing the use of ACANs are sufficiently explicit and unambiguous to allow ACANs to be used as intended.

Finally, I have taken steps to ensure that the foundation on which my office operates is sound by examining some key areas of our operations. While examining these areas has caused us to ask ourselves some difficult questions, the process has been valuable. It has resulted in a clear, shared understanding of required adjustments. Three noteworthy areas are:

1. An internal review of closed complaint case files received since the Office opened in 2008 was completed. The intent was to assure myself that all cases coming to the Office's attention were dealt with in accordance with the regulatory parameters that guide the Office's operations. As a result of the review of each file, I am satisfied that the disposition of each case was appropriate.
2. In the area of procurement practice reviews, we are:
   1. refining the protocol for topic selection, which will be the basis for the identification of practice reviews to be conducted in the future;
   2. revising the methodology for conducting reviews to ensure the Office produces high quality, timely reports.
3. The Office initiated an evaluation of its effectiveness during the first three years of its operations. An independent third-party contractor was engaged to carry out the evidence-based formative evaluation, which includes obtaining the views of stakeholders. An external advisory committee of senior officials is assisting me in ensuring the evaluation approach is thorough. The evaluation results will guide any necessary adjustments to improve our service delivery.

As we move ahead, we will continue our outreach efforts to ensure that those who can benefit from our services know we exist. This includes meeting with Canadian companies, associations, federal organizations and parliamentarians. We will continue to seek opportunities to participate in conferences and events with the aim of listening, learning and sharing some of the effective procurement practices we have observed in our three-plus years of operation. In short, we will ensure that the people we were created to assist are aware that the office is available to help them.

Lastly, in keeping with the Government of Canada's greening government initiatives and further to the Government's decision to transition all government publications from print to electronic publication, this report represents the final year in which OPO's annual report will be available in hard copy. The printing and distribution of this 2011-12 report is being limited to parliamentarians. The transition to paperless reporting will be completed in 2012-13. The Office's reports, including annual reports, will continue to be available on our Web site:Office's reports, including annual reports.

Frank Brunetta
Procurement Ombudsman

Date modified:

2018-11-01