Thank you very much.
There's a presentation that I think is in your packs that I'll just generally refer to. I'll mostly just speak, but there's some material in there that might be useful to you later on.
I very much appreciate the chance to come and speak with you today. When I look at the procurement function of government and at all the transformation agenda you have and what you're trying to achieve, this is such a fundamental building block. You can't do what you want to do as a government without getting this fixed.
When you look across the country, across the world, you see that Canada is looked to for so many things. I lead our global consulting practice for government, and everywhere I go they want to know what Canada's doing, but not in this area. We have fallen behind. They look to us for so much innovation, but procurement has become a blocker for what you're trying to do. It's time to get this right.
If you go to slide three, what I'm going to focus on is what's getting in the way and what you might do to try to fix it. I would echo a lot of what Mr. Murphy has said here.
There are a few things.
First of all, there's this focus on the lowest price. I think what we need to do as a government is focus on value and outcomes. The lowest price often becomes the highest price over the life of a contract or a relationship. We need to focus on enterprise value. Government doesn't have the corner on good ideas. Again, as Dan was just saying, if we sit in the backroom and we try to come up with the perfect set of requirements, we're always going to get it wrong. There's so much creativity out there. What we need to do is define the outcomes that we're looking for, let the private sector come to us with creative and innovative ideas, and give them the space to do that.
There are very rigid processes that don't allow for any flexibility. I think we've designed the procurement processes to protect against the exception, as opposed to creating an environment where people are going to come and be able to drive value for the government. We've dumbed it right down to the lowest common denominator from a risk aversion perspective. When we do that, we get in our own way. The business stakeholders, again to the point that Dan made, are not owning and leading the process. We need our business leaders in front of this.
The talent required to create these arrangements and to co-develop solutions with the private sector is not necessarily sitting in our procurement group today. We need to rethink the talent agenda, the career paths, the compensation, where we recruit, and how we develop procurement officers. I think you need to look at all the options around whether that's even a core competency of government or whether others could do it better.
Create the ability to co-develop and communicate with vendors throughout the procurement process. I've been on every side of the government procurement process. I've been a vendor and I've been an adviser. I'm thinking about a process that we've been involved with very recently. From the time we were told we were the lead incumbent to the next conversation was 18 months. It was 18 months of hiding behind we don't know what, not being allowed to talk to a human being. Your business has changed dramatically in 18 months' time, so what you're originally trying to procure compared to current-day needs is almost unrecognizable. If a conversation had been allowed through the life of that process, we could have continued to evolve our solution so that it stayed current. That's the kind of thing that we need to be able to build in.
On slides four and five, I've gone through, on the left-hand side, some of the problems, and I've put some of the specific ideas that you might want to consider as you're contemplating reform on the right.
In terms of rigidity, the processes need to create the space for co-development, engagement, and communication with the vendors. Whether those are large or small, we need to have a much more open process that allows that communication back and forth.
I used to lead the transformation program for the Province of British Columbia. I was a deputy minister there about 10 years ago, actually. I worked with Joyce Murray at one point in time. We developed a process called joint solution procurement. You will have probably heard about this. This isn't for every project that you would do, but it's for those large, complex ones. If we think about Phoenix, about the e-procurement process, and about what you're trying to do in terms of a lot of the digital agenda, you have an outcome you're trying to achieve. You define that, and you define the constraints you're operating under, and then you put it out there and let the vendors come through. It's a very competitive process. It's very transparent. It follows all the rules. It requires a very smart government team to manage this process, but what you get at the end of it is a co-developed solution that's going to ideally meet your needs. That process has been well established, and it works exceedingly well, but you need to have the talent on the government side to really pull that off.
We can provide lots of information on joint solution procurement.
Value gets lost over the life of the deal, and we talked a little bit about this earlier. It's one thing to actually sign a contract, and everyone has a “Yahoo!” moment, but the value over the next three years, five years, or 10 years tends to erode, so we need to put just as much energy, focus, and talent into the management of that long-term relationship, if this is a long-term type of thing, as we do into getting to the deal. Again, it's about making sure you have the talent, the incentives, and the capability to do that lifetime contract management, and also to make it flexible enough and to anticipate, when you do enter into some sort of solutioning relationship with a provider, that technology's going to change, business needs are going to change, and demographics are going to change. Things are going to happen, so you build regular checkpoints into that process so you can continue to evolve it so there's value on both sides.
We've talked a lot about contract flexibility and the ability to make sure you're inviting and allowing the participants in the process to propose alternative solutions and creative solutions. It's very difficult for them to do that right now, to fit that into those little ticky boxes that are impossible to manipulate. There's no incentive to do it. Most often in the procurement processes that happen today, there's no way of scoring that. What happens when people do come with a creative, higher-value solution is that they usually get disqualified, because the government doesn't know what to do with it. It either cancels the procurement process entirely and starts again, or it disqualifies the person who's put it in.
Again, when you're looking at all-of-government types of solutions, you often start with a few ministries or departments, and then it scales up over time. It's important, when you put your original procurement documents out there, that you anticipate and you encourage to allow the scaling so that you can onboard other parts of government, other parts of the broader public sector. That way you don't have to keep going back to the street over and over and over again to procure the same thing. If the provider is performing and exceeding the outcomes you set, and you put much more in place around a performance-based evaluation, it allows you to scale along with the provider.
Finally, I'll just spend a minute on talent. We talked a little bit about this. We could fix the processes and we could fix the documentation, but if you don't have the talent on the government side of the procurement group, you're not going to be able to get there. There is, I would say, an urgent need to look at the kinds of skills that are required, the career paths and compensation, and that needs to be completely revamped so that you can have the same level of talent on the government side of the table as you're hoping to attract from around the world.
I'll stop there.