Office of the Procurement Ombudsman

1. Office of the Procurement Ombudsman Presentation to the Institute for Competition and Procurement Studies Bangor University Frank Brunetta Procurement Ombudsman of Canada Bangor, UK, March 21, 2013 Promoting Fairness, Openness and Transparency in Federal Procurement

2. Canadian Context • Westminster parliamentary system • House of Commons, the elected lower half of Canada's federal bicameral legislative body, the Parliament of Canada. • The political party with largest number of elected members of Parliament forms the government – party leader becomes Prime Minister. • Prime Minister selects Cabinet Ministers from the Party’s elected Members of Parliament. • Public Service is professional and non-partisan • Career bureaucrats provide advice and services with the highest standards of accountability, transparency and efficiency 2

3. Procurement ~ fourth largest Canadian federal expenditure • C$157.9B - Transfer Payments • C$42.3B - Personnel • C$ 30.8B - Debt Payments C$15B - Procurement 1% of GDP Source: 2010-2011 Main Estimates 3 3

4. Canadian Federal Procurement C$15-C$20B annually 92%+ LDV (355,000) LDV-Low Dollar Value < C$25K – Goods & Services ~385,000 contracts ~C$1.5B (~8% of annual expenditure) Source: Treasury Board Secretariat 2008-2009-2010 3 year averages

5. Canadian Federal Procurement ~ Roles and Responsibilities... • Treasury Board of Canada Secretariat (TBS) • Develops government-wide procurement policies • Establishes limits on the project and contract approval authorities of ministers and approves projects contracts above established limits • Department of Public Works and Government Services Canada (PWGSC) • Services to other departments and agencies : • procurement • real property management • 100+ Departments and Agencies • Develop operational requirements for goods & services • Contract for goods (when delegated) and for services within ministerial limits 5 5

6. Roles and Responsibilities (cont’d) • Justice Canada • Provides legal advice on procurement transactions and issues • Canadian International Trade Tribunal – quasi-judicial institution • Examines supplier complaints concerning federal government procurement covered by NAFTA, WTO and other trade agreements • Auditor General of Canada • Audits government operations to ensure compliance with policy and value for money 6 6

7. Procurement in Canada… can be complex… • Legislated, Regulatory and Policy framework: • More than 15 Acts • Federal Accountability Act – fairness, openness and transparency • Criminal Code – prohibits bribery and fraud against government • Public Disclosure – all contracts more than $10K made public • Financial Administration Act – Government Contracting Regulation • More than 35 policies to be considered/respected • Contracting founded on the concept of competition; a cornerstone of Government Contracting Regulation

8. Government Contract Regulations ~ Concept of Competition • Bids must be solicited, except: • Pressing emergency • Valued under C$25,000 • Not in the public interest • Only one vendor capable of performing contract 8 8

9. Office of the Procurement Ombudsman 2008 – Office of the Procurement Ombudsman • Federal • Accountability Act • - strengthen ethics • truth in budgeting • qualified appointments • access to information • whistleblower protection • strengthen auditing • clean up procurement • Procurement Ombudsman 2006 – Conservatives elected

10. Procurement Ombudsman • Main feature of Federal Accountability Act • Prior to 2008: • suppliers had limited recourse mechanisms on low dollar value contract disputes • no third party dispute resolution mechanism • No dedicated body for oversight of federal procurement activities

11. Office of the Procurement Ombudsman~ An Independent Organization • Government-wide mandate operating at arm’s length from departments • Reports to the Minister of Public Works and Government Services • Regulatory requirement to produce Annual Report • Minister required to table report in Parliament • Neither a lobbyist for suppliers nor an apologist for federal departments

12. Office of the Procurement Ombudsman • Mission • Promote fairness, openness and transparency in federal procurement • Mandate • Review complaints respecting the 1) award and • 2) administration of contracts • Review procurement practices of departments for acquiring goods and services • Provide Alternative Dispute Resolution (ADR) services

13. When Suppliers Call Us... • Suppliers often: • concerned or frustrated • Do not fully understand the procurement process • want answers! • Our role is to: • first and foremost  Listen • be helpful • point callers in the right direction • facilitate whenever possible

14. Office of the Procurement Ombudsman • Our goal: Informal Resolution • Shuttle Diplomacy • Dialogue • De-escalate • If all else fails...

15. Office of the Procurement Ombudsman- ADR Service • Terms and conditions of contract at issue • Voluntary • Requested by one party/ agreed by both • Quick and no fee for service • Discussion without prejudice • Results are confidential & Legally Binding

16. Our experience to date... • Avoids lengthy and costly litigation: • Less time consuming • No fee service appealing to SME’s • Minimal risk to both parties • Possibility of reaching legally-binding settlement • Confidentiality is key • Preserves business relationship

17. Office of the Procurement Ombudsman Questions? www.OPO-BOA.gc.ca

18. Federal Accountability Act • Streamlined procurement policies and replaced transaction-level requirements and rules with basic principles of management accountability and transparency: • Moved from rules based Contracting Policy to principles based policy on Managing Procurement; • Ensure value for money and manage procurement in a way that supports program delivery and operations; • Link investment decisions to procurement strategy.

19. Federal Accountability Act (Cont’d) • Procurement to be conducted in an accountable, ethical and transparent manner; • Consolidation of measures on conflict of interest and anti-corruption, as well as other legislative and policy requirements; • Ensured that both public servants and vendors were working from the same statement of expectations and commitments; • Clearly outlined what is acceptable conduct when contracting with the federal government.

20. Federal Accountability Act (Cont’d) • Public servants must: • Adhere to laws, regulations, and policies; • Commit to uphold the democratic, professional, ethical and people values of the Values and Ethics Code; and, • Arrange private affairs in a manner preventing conflicts of interest (real or perceived). • Vendors must: • Respond to requirements in an honest, fair and comprehensive manner; • Accurately reflect their capacity to satisfy requirements; and, • Submit bids and enter into contracts only if they can fulfill all contractual obligations.

21. Federal Accountability Act (Cont’d) • Inclusion of integrity provisions in all government contracts; • Reduce the opportunity to exert political influence through large donations to political parties and candidates; • Strengthen the role of the Ethics Commissioner by introducing a new Conflict of Interest Act and granting powers to the new Conflict of Interest and Ethics Commissioner to enforce it; • Toughen the Lobbying Act by introducing stricter rules for lobbyist activity and giving a new Commissioner of Lobbying enhanced powers to investigate and enforce them; and, • Appointment of a Procurement Ombudsman.

22. Federal public servants committed to: • Uphold the public trust • Act and negotiate in good faith • Work within the law • Speak honestly • Use processes that are transparent to all • Act in fair and considerate manner • Deal with people equitably and with civility • Seek, consider and value input • Accept the consequences of their actions