Procurement Strategies Management Buying Smarter: Strategies to Raise the State Buying Power Normand Masse Director General Services and Technology Acquisition Management Sector Acquisitions Branch Public Works and Government Services Canada September 14-16, 2011 Santiago, Chile Multilateral Meeting on Government Procurement III

2 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

3 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

4 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

5 5 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.

6 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

7 High-Level Procurement Strategy Development Process Preliminary Analysis Preliminary Analysis Formal Consultations Formal Consultations Review & Revise Review & Revise Implement Strategy Meeting Strategy Meeting Detailed Analysis (Targeted) Detailed Analysis (Targeted) Questions Options Impact Options Impact Alignment Procurement Market Supply Demand (Issues Gathering) - Manager - Director - Director Generals 1 Page Summary Of Meeting 1 Page Summary Of Meeting Issues Round 1 Issues Round 1 Issues For Meeting Issues For Meeting Records of Decisions Records of Decisions (Questions) - Manager - Director - Director Generals  Supply Channel  Vetting  Validation  Change  Clients  Suppliers  Target  Timeline Procurement Market Supply Demand  OPI/OSI  CM  Green  OSME  If Required Draft National Strategy Draft National Strategy Final National Strategy Final National Strategy Analysis ImplementStrategyConsult and Revise

8 Strategic Direction Departments Suppliers Buying for Results From prescriptive transactions to innovative solutions Recognize Procurement as an Investment From Consultation to Engagement Trusted, Effective Procurement PWGSC Government of Canada Self-serve tools Engage Improved e-access Continuous improvements

9 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

10 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

11 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?