Procurement Strategies Management Buying Smarter:

Strategies to Raise the State Buying Power

Normand Masse Director General

Services and Technology Acquisition Management SectorAcquisitions Branch

Public Works and Government Services Canada

September 14-16, 2011Santiago, Chile

Multilateral Meeting on Government Procurement III

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Objective• Describe how the Government of Canada improves

its position as an intelligent procurer of goods and services.

• Development of National Procurement Strategies

• The Engagement and Consultation Process

• Opportunities to enhance buying power and improve outcomes

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Ability to Impact Estate Buying Power

•The Government of Canada’s has a common procurement service provider - PWGSC

•In this role – PWGSC Develops, Delivers and Maintains:

– Master procurement tools from which clients perform purchasing action

– Complete Contract Services

– Delegation of Goods Authority from Minister of PWGSC

•Departments manage demand and requirements identification

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Transformation: Where We Came From

• Commodity Management has changed over time

– Done locally – informally and through local procurement instruments

– Became Centralized – focused on procurement instruments – notably standing offers – cost reduction

– Now focusing on wider Procurement Strategies for Goods and Services – for each category seeking better opportunities

– Alignment with Industry; Communications; Better Information and Data from Departments

– Annual Plan with Senior Level engagement and Strategy Development

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Breakdown of 09/10 GC Expenditures:

Source: August 2011 – The above data is generated from the Spend Cube, which represents normalized financial data collected from client departments. Note, the totals above have been extrapolated to reflect any client not loaded within the Spend Cube.

Non-Sourceable: Any commodity not sold to the market. Includes transfers between departments and agencies, taxes, depreciation, medical provider payments and etc.

$7.13B

$3.94B

$5.26B

$13.27B

$29.60B

$0B

$5B

$10B

$15B

$20B

$25B

$30B

$35B

GC Spend2009/2010

Non-Sourceable Military Construction &Property

Management(RP)

Core Goods &Services

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Procurement Strategy

• Procurement Strategies set out how we will manage a category of goods and services going forward.– Clear steps towards future target state – Public Document

• Objective is to use procurement to help improve clients overall operational efficiency and effectiveness – While maintaining focus on purchasing efficiency, give increased

emphasis to providing clients with procurement tools and processes to better manage the overall goods and services category

• Balanced Outcomes – price, cost, environmental

• Cyclical Review process for continual improvement

• Simultaneous Public Consultation with Departments and Industry

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High-Level Procurement Strategy Development Process

PreliminaryAnalysis

PreliminaryAnalysis

Formal Consultations

Formal Consultations

Review &Revise

Review &Revise

ImplementImplementStrategyMeetingStrategyMeeting

Detailed Analysis

(Targeted)

Detailed Analysis

(Targeted)

QuestionsQuestions

•Options•Impact

•Options•Impact

AlignmentAlignment

•Procurement•Market•Supply •Demand

(Issues Gathering)- Manager- Director- Director Generals

1 PageSummary

Of Meeting

1 PageSummary

Of MeetingIssues

Round 1Issues

Round 1

IssuesFor Meeting

IssuesFor Meeting

Records of Decisions

Records of Decisions

(Questions)- Manager- Director- Director Generals

Supply ChannelVettingValidation ChangeClientsSuppliers

TargetTimeline

•Procurement•Market•Supply •Demand

OPI/OSICM GreenOSME

If Required

Draft NationalStrategy

Draft NationalStrategy

Final NationalStrategy

Final NationalStrategy

Analysis ImplementStrategy Consult and Revise

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Strategic DirectionDepartments

Suppliers

Buying for Results

From prescriptive transactions to

innovative solutionsRecognize Procurement as

an Investment

From Consultation to Engagement

Trusted, EffectiveProcurement

PWGSCGovernment of Canada

Self-serve tools Engage

Improved e-access

Continuous improvements

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Elements of Procurement Strategies• Identify which and what demand to shift to better

generate value

• What information / data is needed to better manage government wide performance? – Asset management, Performance Management

• Creation of more responsive and strategic tools– Better understanding of demand drivers and cases

enable more targeted and strategic procurements

• Reduction and Elimination of Web of Rules

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Influencing Demand• Shift from Transactional to Strategic procurement requires

influencing and helping to shape demand in other government departments.

• This can be in terms of:– What is requested – When it is requested (purchasing cycle)– What volumes are requested and what services are included

• E.g: from purchasing of printers to using professional managed print services requires new procurement tools, piloting processes with clients and measurement of benefits to support change.

• Objective shifts from helping clients purchase better to including helping clients better manage what they have purchased

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Where Do We Go From Here• First Round of National Procurement Strategies

– Incremental Improvement from current state working with clients

– Work with Central Agencies to encourage better data for economy and efficiency

– Allow for Innovation – Cross pollinate ideas from one category to another

– Standardize and Simplify to align with real demand– Accept challenge of strategic work with clients

Questions?