Office of the Procurement Ombud released new report, details recommendations on Procurement reform
The Office of the Procurement Ombud (OPO) released their newest report on federal procurement yesterday. This is the latest in their Knowledge Deepening and Sharing initiative that OPO has been running since 2018.
These follow up two other reports from this year – Negotiated Requests for Proposal and Best Value in Procurement, which you can read in full at the links provided. I highly recommend you do, they are very interesting and while not entirely defence related, are still important looks at the procurement process.
This report, Time for Solutions: Top 5 Foundational Changes Needed in Federal Procurement, follows up the OPO’s 2023–24 Annual Report, which identified several of these major issues facing federal procurement, and their effects on the system.
It is not inherently about defence, though it does get a section. It also does not give too much mention to the future DPA for obvious timing reasons, outside some brief acknowledgments.
It's still important to see the changes at the federal level. Broader federal regulations and standards, even with a DPA, inherently affect the way that CAF handles procurement—even with a special, independent agency.
The report lists five recommended reforms to federal procurement:
Establishment of a Chief Procurement Officer (CPO) position accountable for the federal procurement function
Creation of a government-wide Vendor Performance Management (VPM) system
Development of one universally applicable set of federal procurement rules
Increased usage of Artificial Intelligence (AI) advancements to modernize federal procurement tools, systems, and processes
Establishment of a government-wide framework for procurement data collection to increase transparency in federal procurements and facilitate informed decisions
Many of these suggestions have been thrown out in the past. The establishment of a federal-level Chief Procurement Officer has been one floated for a long time. It has been widely supported by the OPO through several of their publications and is a personal goal of Procurement Ombud Alexander Jeglic.
Having a singular, responsible office in charge of federal procurement would help streamline operations, give a clear mandate of responsibility, and provide a voice for further reforms and change. It would also give procurement a dedicated person on the federal level able to better coordinate the various departments on procurement matters.
It’s something I have previously said I would like to see, especially as PSPC and the DND undertake their own reviews of the procurement process. An independent DPA, hypothetically, would have a much easier time coordinating with other federal agencies if there were a singular office to go through on these matters.
Beyond that, a lot of these issues might feel like common sense. The lack of a Vendor Performance Management system is an obviously glaring missing piece that jeopardizes accountability, drives up risk/cost, and makes it near impossible to have ready access to past data that can affect future contracts.
While VPM systems are fairly standardized across the provinces, the lack of a federal system means that the government is unable to hold suppliers accountable, and opens up for further abuse and corruption in the procurement system.
It throws out a vital tool of leverage we can use against suppliers who either fail to deliver as promised or attempt to abuse the system by making it impossible for departments to properly track previous contracts and hold companies accountable for their past actions during the bidding process.
No data, no system of accountability, and no trust. As someone whose primary job it is to track procurement projects, the lack of accessible data is a major reason why trust has eroded in the info space.
Not only is our accounting overly complex and distinctly incomparable at times to allies, but lack of accountability, and difficulty in getting ready information continues to make jobs like mine harder—let alone knowing that many in the federal system continue to deal with these same issues.
Data is important, especially when you are dealing with billion-dollar contracts. The lack of a system to track and monitor that across departments, along with the lack of a central authority, basically leaves everyone stranded on their own island with only a pigeon to share info, and no way to actually coordinate data between each other.
That’s how we see so many companies go through disastrous projects in one department only to go to another and win another major contract.
The other two major points I want to note—creating a universal set of rules and a data collection framework—are easier said than done, but also absolutely necessary. The current procurement process is fractured, complex, and decentralized.
Departments either have their own specialized rules or their own set of standards, bound by a hobbled set of federal rules, bound with trade agreements, international agreements, and special processes.
Sometimes, as with defence, procurement can involve multiple departments, councils, and monitors that are independent of each other, with their own individual sets of standards to guide them.
It’s far easier said than done. To create a centralized system requires tearing down a lot of the current system and reorganizing from the department up. It requires both governmental roles like enforcement and legislative changes that have been built up over the last several decades.
I am happy to see the report bring up the Directive on the Management of Procurement (DMP) and break it down a bit. While commendable, it is fair to say that DMP has not lived up to its desired role.
Data collection is another standing point that personally irks me. The lack of centralization for procurement data is a challenge I face weekly. On a small note, I hate Canadabuys. I hate it with a passion. It’s broken, filtering doesn’t work, and I waste at least an hour every week trying to track things down for the newsletter.
Why does filtering remove half the projects from the list? Why does trying to load more not only bring me to the top of the page but shuffle everything?
Why are projects spread out between Canadabuys, SAP, and MERX? Why is it a treasure hunt to know what documents are released for god damn snowmobiles?
Anyways, rant over. The same issues as before apply here: accountability, lack of information between departments, and no central authority for anything has made the process confusing, isolated, and rife for manipulation.
The report does give defence its own section. Though brief, it does raise a lot of the standard issues we hear. Defence procurement is unique, is too burdened by multiple departments being involved in the process, and lacks the tools and authority to go after suppliers.
I want to take two quotes from the report regarding defence procurement just to show what people were saying:
One survey respondent stated that they believed “a major issue with defence procurement is major suppliers know they won’t really get punished for failing to meet requirements and that ‘Canada will always pay’ is pretty much their philosophy.”
“Canada’s unwillingness to enforce contracts with defense contractors has clearly resulted in Canada receiving inferior products at significantly higher cost (JSS \[Joint Support Ship], OOSV \[Offshore Oceanographic Science Vessel]). The contractors can deliver what we want when we want at the cost we want—they just know they do not have to and take advantage of Canadian taxpayers as a result. Simplifying and streamlining procurement is also critical to improve end results as well.”
It highlights some common beliefs I've seen expressed by those in government positions. It also shows the frustration many of them have faced. These issues won't be new to many of you here. We all know the challenges that Canada faces when it comes to defence procurement.
There are no recommendations given, although respondents have shown support for a centralized approach to defence procurement, either under a separate, new agency like the DPA or under PSPC.
OPO plans to release a separate report on defence procurement in the 2025–2026 period. I wish there were more substance here for me to share, but it wasn’t meant to be more than a basic look at the issue.
That doesn’t mean that the issues facing defence procurement are entirely unique, and as I said before, the reforms here directly tie into defence even if it is given its own central authority.
All of these reforms, to me, are in desperate need. Centralization is the cornerstone of this report; it is essentially the core binding philosophy of each recommendation—giving federal procurement a central authority, central standards, and a central system to record, categorize, and share data.
No matter what, these same issues inherently affect defence procurement and will continue to exist even with a DPA. I said it before during the election: a new agency won’t fix the core issues. It might be better than now, but it will still be an island, separate and with no tools available to build upon itself.
You don’t fix things in isolation. It takes a whole-of-government approach if you want to tackle things beyond just a messy, overly complex system of authority. The system is still full of opportunity for waste and corruption. It still is not nearly up to the transparency and accountability standards as it should be.
That isn’t going to change under just defence procurement reforms. That’s why it’s important, as advocates, to look beyond just the DND and to the system as a whole. We don’t fix the machine by replacing one gear, and as advocates we need to ensure we do not become tunnel-visioned with our focuses and priorities.
I look forward to the OPO report on defence procurement, as well as everyone else’s. Lord knows we have several competing ones now!