Integrity: Vendor’s Role Christian Laverdure Senior Director Policy, Risk, Integrity and Strategic Management Sector Acquisitions Branch Public Works and Government Services Canada September 14-16, 2011 Santiago, Chile Multilateral Meeting on Government Procurement III

2 Table of Contents 1.Overview 2.Background 3.Internal and External Drivers 4.The Past 5.The Present 6.The Future 7.Discussion

3 Overview The Government of Canada Public Works and Government Services - Acquisitions focus Are we getting value for money? Industry is not out to get us But what are they doing to enhance integrity?

4 Background Examined internal and external drivers that have had an affect on vendor’s integrity – what are the triggers? Stakeholders: Canadian Public, Government, Parliament, Private sector, para-public groups and media Governance: Acts, Regulations, policies, departmental policies, internal manuals and guidelines

5 The Pendulum The “Tipping Point” in the Canadian context Compliance (Risk Aversion) versus Flexibility / Efficiency (Risk Mgmt) Not more regulations but more oversight

6 Balances competing interests for the public good Small and Medium Enterprises Industrial and Regional Benefits Green Aboriginal set-aside Innovation  Fair, open and transparent  Best value to taxpayers Competitiveness Legislation, Regulations, Policies Canadian Values Socio-economic considerations

7 The Drivers Internal: internal audits and findings, irregularities, less money, focus on value for Canadians and value for money External: over billing, excessive profit, bid rigging, vendor performance

8 The Past Cost and Price Analysis Cost Audit Standard Clauses and Conditions

9 The Present Add to that: The Federal Accountability Act Vendors’ Code of Conduct Perception of Bid Rigging issues (administrative reviews) Increased media attention (and Access to Information) Increased public awareness (value for money) Vendor Performance Policy Commissioner of Lobbying of Canada

10 Vendors’ Role Associations role (peer pressure) Standards (ISO) Subcontractors (supply chain) Whistleblowers

11 The Future More reliance on internal controls Stronger use of external audits, verifications, assurance programs Learning from our mistakes Let the industry tell us how to self-regulate

12 Discussion What’s the right balance? How do we ensure vendor integrity while not driving away the private sector and still expecting the best value?

13 Questions?

14 Legislative and Regulatory Framework Legislative Authority Statutes Department of Public Works and Government Services Act (1996) Establishes powers of the Minister for: Acquisition of Goods Acquisition of Services and Construction Planning and organizing the provision of goods and services for departments Defence Production Act (1951) Provides the Minister “Exclusive authority” to acquire defence supplies/construction/projects Federal Accountability Act (2006) Office of the Procurement Ombudsman (2008) Also introduced the code of conduct for Procurement (2007) Financial Administration Act (1952) Government Contracting Regulations Trade Agreements Act Modern Treaties Comprehensive Land Claims Agreements 23 Comprehensive Land Claims Agreements in effect (20 with contracting obligations) World Trade Organization’s Agreement on Government Procurement Implementation Act (January 1, 1996) North American Free Trade Agreement Implementation Act (January 1, 1994) Agreement on Internal Trade Implementation Act (July 1, 1995) Canada-Peru Trade Agreement Act (August 1, 2009) Canada-Chile (April 5, 1997)