Is Procurement Broken?
Is public procurement in Alberta broken? We receive complaints regularly of waste. Media reports regularly of auditors identifying waste in public projects in construction and transportation, payment processing and data management. We wanted to know more and if the system is broken, what can be done to fix it?
The following Report highlights the views of Alberta contractors and a few administrators. The insights are consistent and important for all levels of government affecting all Alberta industries! Practices need fixing – particularly those affecting contractors, and the system is failing to meet most objectives.
Several recommendations are cited, that if implemented would save taxpayers $Billions, improve sub-standard service levels, and go a long way to restoring trust among stakeholders.
Is public procurement in Alberta broken? You’ve spoken – both as contractors and administrators. Our May survey results are crystal clear: shortfalls in expectations and outcomes prevail. The systems may not be broken but they are clearly disappointing- particularly for small Alberta contractors.
$Billions are spent annually by governments – federal, provincial and municipal, engaging contractors in the supply of goods and services. Public procurement is a core government process, a source of huge economic opportunity and potential waste.
We agreed and hosted the May survey to learn your views of public procurement.
Results and recommendations have been released as follows:
Section A. The Contractors Profile
Section B. Assessing Procurement Practices
Section C. Assessing Procurement Objectives
Section D. Recommendations and the Conclusion
While personal responses are confidential, the data is open and may be requested by email for inspection and the conduct of associated analysis.
The survey will also be the subject of a panel discussion at the Supply Chain Management Association’s Conference in September – see event now.
Overview. Contractors value most highly the procurement practice features that are germane to preparing and winning a bid – the “primary” features. Public incentives for social and economic development are “secondary” and less important. Incentives for innovation are valued, but the associated gap indicates that what is expected is not being received.
Significant other gaps in what is received vs expected are identified, particularly for primary procurement features. There is little difference in how contractors view the procurement practices of each level of government in Alberta and it’s public agencies.
The report identifies several defining characteristics of contractors with a declining interest in procurement compared with those with an increasing interest in Alberta’s public procurement.
Comments cited by contractors provide additional insight into the concerns of contractors with current procurement practices in Alberta. Section D. will identify the views of contractors and administrators in their evaluation of the objectives of public procurement.
Overview. Both Contractors and Administrators disagree with the stated positive objectives of public procurement. The Disaster Recovery objective is the only exception. Otherwise, Administrators rate high – higher than Contractors, government’s stated objectives of Innovation and Vision & Leadership, and Effectiveness.
Surprising is the low rating Contractors have – considerably lower than Administrators, for the objective of Effectiveness. Government procurement and project management are well aligned. That is, deliverables are on-time, on-budget, and as specified.
Otherwise, while rated higher than Contractors, Administrators support is weak for the other objectives – particularly Value for Money – that both rate lowest. Of concern must be the generally low ratings by both Administrators and Contractors for the prime objectives of public procurement: Value for Money, Transparency, and OVERALL.
The low agreement and very high disagreement by Contractors with all objectives -other than Disaster Recovery, is consistent for most Contractor features with the possible exception of size. The disregard for the objectives of Value for Money and Transparency is highest for larger organizations.
The comments reviewed indicate that the prime issues are with waste not corruption or fraud.
Overview. The concluding Section D of the survey Report includes the respondent’s recommendations. They are presented in clusters associated with the primary issues identified in the report’s sections on public procurement practices and objectives. With the exception of Disaster Recovery, both Administrators and Contractors agree that the objectives of public procurement are not being met and that there are serious flaws in public procurement practices. These perspectives are quite consistent for all Contractors – regardless of their location, size, or level of government. While the system may not be broken – it clearly needs fixing.
Nine recommendations are presented in the interest of improving the attainment of public procurement objectives – increasing Value for Money and Transparency – reducing waste, focused on making a real commitment to innovation. Also cited are a number of recommendations for resolving gaps in what is expected and received in public procurement practices.
The conclusion acknowledges the need to re-establish trust among the various stakeholder and rests on two principles: 1. Continuous improvement requiring independent oversight and 2. Listening and learning with stakeholders as advisors at all levels. The special circumstances and extraordinary waste are cited in the development of health information systems.