6 Summit SeptemBer/octoBer 2010

PUBLiShER’S PROfiLE

an interview with

Shahid minto

Federal procurement ombudsman – an office making a difference

by Kevin McGuinness

SeptemBer/octoBer 2010 Summit 7

under the Department of Public Works and Government Services Act, the Federal Procurement Ombudsman is required to review procurement practice at federal

departments to assess their fairness, openness and transpar-ency and to recommend improvements to those practices; review complaints respecting the award of any contract below the Agreement on Internal Trade threshold amount; review complaints respecting the administration of a con-tract for the acquisition of materiel or services; and finally, ensure the availability of an alternative dispute resolution process.

Minto pulls his various responsibilities together in one theme: “Improving communication and strengthening an ethical environment would strengthen Canadians’ confi-dence in federal procurement. Our business model is less about just following the rules and much more about doing the right thing. Procurement decisions should always take ethical considerations into account. The real question is not just what minimum actions government officials must take to meet a narrowly defined policy or legal requirement, but how those actions ensure that the principles of fairness, openness and transparency are upheld.”

the office of the federal procurement

ombudsman was created following the

implementation of the Federal Accountability

Act. Shahid minto was appointed as the first

such ombudsman in may 2008, after serving

28 years with the auditor general of canada,

followed by service as the first chief risk officer

in public Works and government Services

canada (pWgSc). With this experience, a law

degree and a ca qualification, his credentials

would be difficult to match. Sadly, from the

perspective of those who are committed

to enhancing professionalism in canadian

government procurement, minto retired in july

2010. until a new ombudsman is appointed,

deputy procurement ombudsman oriana

trombetti is in charge of the office. When

i bumped into him at this year’s annual

purchasing management association of canada

conference he agreed to an interview.

The ombudsman’s mandate includes all phases in the procurement life cycle, from defining the requirements or specifications, through developing a procurement strategy, soliciting and evaluating proposals, the award of the con-tract, its administration, and its closing out. Globally, the basic objective of the office is to strengthen Canadians’ con-fidence in federal procurement. “Parliament gave the office a clear and focused mandate,” Minto observes.

The overall approach under Minto’s administration has been to build trust and confidence among all the stakehold-ers in public procurement. Doing so, is a two-way street, and as a result of this process of dialogue the process has been much smoother going than some might have expected when his office came into being. In the view of many observers, this is very much attributable to the man and his approach. He notes that, “The feedback we have received from all stakeholders confirms that our dedicated staff is profes-sional, knowledgeable in procurement and impartial; the recommendations we make are reasonable, well thought out, affordable and practical. Informal inquiries indicate that stakeholders have found our interventions to be very helpful and significant actions have already been taken on recom-mendations we have made to departments and agencies.”

We turned our discussion to the difficulties encountered in creating a new government entity. He explains that it was literally necessary to build it from scratch. “When I began, it was just me and a summer student. Now the office has a full-time staff of 24 professionals. Yet, it remains nimble.”

Minto considers the process of creating and shaping the ombudsman’s office during its early days to be one of the things that he is most proud of. He points out that his office is now consulted by other countries, who are interested in improving the accountability and transparency of their own procurement systems.

Reaching this point was far from easy. The office came into being in the shadow of the Gomery inquiry. Despite the media criticism focused on federal procurement at that time, Minto points out that the vast majority of people engaged in public procurement in the federal government are hard working, dedicated public servants, who must often carry a heavy file load. He feels that the media focuses too much on isolated scandals. This constant criticism undermines morale and the confidence of Canadians in public procurement. Low morale was a serious problem he discovered while set-ting up the ombudsman’s office. “Many of federal procure-ment people were reeling,” he observed, “yet at the same time we found a system that has a lot of highly competent professionals and solid achievements of which it should be proud.”

He sees problems with the federal procurement process as largely the inevitable result of volume, inadequate training and too many rules. “The federal government spends about $14 billion annually on good and services under 340,000 contracts. The sheer number of contracts makes disputes inevitable. It is in everybody’s interest to resolve disputes quickly and preserve the working relationship.”

Minto and his team have chosen to implement a business model that focuses on a collaborative approach to ensure

8 Summit SeptemBer/octoBer 2010

efficient and timely resolution of issues between the govern-ment and suppliers.

“Our commitment has been to be part of the solution. We seek resolution of individual concerns to the satisfaction of all involved; and to make balanced and useful recommendations to strengthen the fairness, openness and transparency of gov-ernment procurement. We follow a collegial and cooperative approach with suppliers, departments and agencies, as well as parliamentarians who of course play the ultimate oversight role.”

This approach has paid dividends in terms of voluntary compliance. “Deputy ministers in all departments have pro-vided us with key contacts in their organizations, and we have developed good working relationships with them. Our collegial approach to procurement disputes has been very well received, and the results are impressive. Most of the complaints brought to us have been resolved without our resorting to detailed investigations, saving time and effort on the part of both sup-pliers and government officials.”

He is happy with the contributions that his office has made to federal procurement, and (while recognizing that improvements can still be made) is generally very supportive of the efforts of the public servants involved in the procure-ment process:

“Our public service does a lot of things really well. We don’t give them enough credit for the positive contribution that they make to Canadian life.”

Encouraged by parliamentarians to pursue a broad agenda, the ombudsman has intervened successfully in a wide range of procurement areas, with the result that the ombudsman’s office has quickly developed a reputation as a benchmark entity in the procurement field. The timeliness of their efforts has helped the office develop cred-ibility both within government and with suppliers. He requires all queries to be responded to within 24 hours, and within 48 hours after that there must be a substantial response. The goal is to get matters resolved within a 10 to 12 day time-frame.

Further credibility has been built through a proactive approach. Minto explains: “Our office continues to deliver on its promise to maintain an active outreach program. We made presentations on the activities of our office to suppliers and public servants across the country on more than 30 occa-sions. We also hosted international delegations from Kenya, China and the Ukraine.”

While much has been done, much more work remains. Over Minto’s tenure, the office has received a steadily grow-ing number of inquiries from suppliers. Not all are com-plaints. The majority of inquiries are only questions about procurement-related issues. Initially, many suppliers inquired regarding the award of a contract. Now, many suppliers are bringing more complex issues to the ombudsman’s attention, relating to questions of fairness, openness and transparency in the procurement process. For example, they are asking questions about the suitability of time-lines for bidding for

contracts, and other details of the solicitation, evaluation and contract award process. We went on to discuss how many of these problems stem from the plethora of rules that surround the public procurement process.

Minto had this to say: “I think that the time that it takes to carry out a procurement project is one area where there is great room for improvement. Both the public service and suppliers find it frustrating. The procurement process should support the delivery of government services. However, in practice, it often tends to become an impediment to efficient service delivery. This forces managers to try to work around the system rather than within it. Suppliers complain about the complexity and the length of the process.”

Nevertheless, he observes, a proper process is essential. He refers to a passage from the Bellamy Report on Toronto’s computer leasing inquiry: “It is widely recognized that pub-lic officials have a greater responsibility to uphold ethical standards to protect the public interest. …“In surveying the literature and research on procurement, it quickly becomes evident that a primary focus of professional attention is on policies, procedures, directives, guidelines, techniques, best practices, etc. However, procurement is about more than the technical components. Almost universally, experts offered the view that ethics-related values and principles are the essential foundation of public sector procurement in leading jurisdictions.”

Another recurring problem that the ombudsman has noted has been one of incomplete file documentation. Poor

file keeping contravenes the requirements of the Treasury Board Contracting Policy, the North American Free Trade Agreement and departmental operations manuals. Minto notes that “These impede the transparency of the federal gov-ernment procurement processes. In some cases, lack of documen-

tation has resulted in unfavourable consequences in both tribunals and courts when government decisions were chal-lenged. In fact, the Canadian International Trade Tribunal has held that ‘maintenance of complete documentation for each procurement is essential to preserving the integrity and transparency of the procurement system’.”

Although poor file keeping may be the result of work pri-orities and volume, Minto observes that “It has been evident to us during our work, a poorly documented file results in a totally unnecessary but significantly increased workload for both the procurement officials and those involved in over-sight functions.”

Minto suggests that proper file administration should be made a performance objective in annual job performance evaluations, with appropriate recognition or consequences for success or failure to achieve results.

Another recurring problem he identifies relates to poor communication between the government and the supplier community. “We were repeatedly told by supplier associa-tions, and even some Members of Parliament, that the gov-

“our public service does a lot of things really well. We don’t give them enough credit for the positive contribution that they make to canadian life.” – Shahid Minto

SeptemBer/octoBer 2010 Summit 9

ernment does a lot of consultation where public servants are hearing but not listening. Furthermore, we were informed by individual suppliers of many instances of misunderstandings and miscommunication during their dealings with procure-ment officials. There is a cost to both parties when there is poor communication and a lack of respect, real or perceived, intended or unintended.

In many of the complaints made to the office by suppli-ers, the government’s first response has been denial of either the existence of a problem or any responsibility for it. While we understand the need to minimize legal liability, unneces-sary denial leads to delays, unnecessary costs and a break-down of trust between the government and its suppliers. Just as procurement officers expect to be treated with respect, suppliers too are mature partners in the supply management team and should be treated with the same respect.”

Poor communications negatively affect relations between the government and its suppliers. Insufficient attention to communication increases the stress on the procurement pro-cess. Both supplier and government staff aggravation could be avoided by better communications between the govern-ment and the supplier community.

Our discussion turned to where Minto sees the office heading in the immediate future. One area of interest is with respect to the use of the various electronic tools that have been incorporated into federal procurement over the last few years, such as PS Online. These have been adopted in the hope of enhancing efficiency. He sees it as prudent to evaluate their success, not just to hunt for possible problems, but more to

see how the process can be further strengthened. Another area which merits some further review is construction, particularly with the large investment in infrastructure over the past year. Recent work in improving the design of government contracts may be responsible for the relatively low number of complaints relating to these projects. He suggests that it would be a good idea to check into why things have worked so well – to iden-tify the good practices that have worked, so that they can be exported to other areas.

Retirement will allow Minto the opportunity to pursue a lot of interests that have been on the back-burner for some time. And, of course, there is the benefit of being able to spend more time with his family, “particularly the grand kids.” However, it seems unlikely that he will be able to retire completely: “My career in the public service has pro-vided me with an opportunity to interact with Canadians from all parts of the country and to understand and appre-ciate the great multilingual and multicultural society we live in. My career has allowed me to visit more of the coun-try than most Canadians ever see. Working in government has given me a tremendous insight into the real workings of government. I have a real interest in putting back something into the system, particularly in working with developing countries.”

Kevin McGuinness recently retired from the ontario attorney general office. in addition to his legal work he is a noted author and has co-authored several books on procurement and leadership with Stephen Bauld, publisher of Summit magazine.