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January 20, 2014

Government procurement and the tipping point

Procurement Perspectives | Stephen Bauld

In 2014, I predict that government procurement will begin to move in a more positive direction. The later months of 2013 were showing that most governments were at least willing to look at change.

At Construct Canada this year, I did see a stronger effort by both the government procurement managers, as well as the construction industry, to work closely together for the greater good.

Making sweeping changes to government procurement is difficult at the best of times.

However, I feel that 2014 will bring the perfect storm for everyone to come together to develop better rules and procedures with respect to being a lot more open to change.

It is critical for the industry that the system in place is fair for everyone to bid, and therefore create a larger pool of bidders on each project.

Stephen Bauld

Procurement Perspectives

Stephen Bauld

This will create better value for money in government as well as give a larger number of contractors the opportunity to bid on bigger projects.

I also feel that this year will see a major shift in the way governments buy construction services.

More efficient systems need to be implemented in order to keep everyone working both from the general contractors view point, as well as the subcontractors working with them.

I have seen many different and better ways to improve this process during 2013, but the issue still remains, getting all levels of government to make the changes to the process without fear of being offside with the policies and procedures they must follow.

I have always said that municipal procurement is a very challenging environment.

During the years I spent as a purchasing manager for a large city, I saw how dealing with all the different aspects of a construction project may often be a challenge.

On the other hand, working with contractors for the last decade, I can see how they can become frustrated with the government process and want to work only in the private sector.

This creates the opportunity to shift to better systems that will be beneficial to all involved in the construction process.

We all continue to write about change to the process.

However, through all the meetings and articles, very little constructive change has evolved over the last several years — at least to the extent that the majority of the industry is still not on side with the way that tender and request for proposal (RFP) documents are written.

They are becoming far more complicated to bid on and also have less capacity to spread risk and cost.

This drives up the price of contracts and reduces the amount of bidders.

This age old problem cannot be fixed by changing one or two clauses in an RFP document.

It requires a complete overhaul of the entire document to make sure one section does not override another in the same RFP.

This creates confusion for the contractors and that causes an extra cost to cover off the unknown risk in the contract.

As new, proactive types of government purchasing managers replace the old guard, we will see the changes needed to improve the industry.

The concept that “we have always done it this way” will no longer work as we move forward towards a better and more efficient system of government procurement.

After close to 40 years being in the procurement field, I have seen many changes, but they don’t come easy.

I predict that in the coming year we will see drastic changes to the way we buy construction services — not because of any quantum shift in the procurement universe, but by the sheer necessity to do something different and more efficient than we have in place today.

Stephen Bauld is Canada's leading expert on government procurement. He can be reached at stephenbauld@bell.blackberry.net.

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