Integrity: Vendor’s Role

Christian Laverdure Senior Director

Policy, Risk, Integrity and Strategic Management SectorAcquisitions Branch

Public Works and Government Services Canada

September 14-16, 2011Santiago, Chile

Multilateral Meeting on Government Procurement III

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Table of Contents

1. Overview

2. Background

3. Internal and External Drivers

4. The Past

5. The Present

6. The Future

7. Discussion

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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

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The Pendulum

• The “Tipping Point” in the Canadian context

• Compliance (Risk Aversion)

versus

Flexibility / Efficiency (Risk Mgmt)

• Not more regulations but more oversight

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Balances competing interests for Balances competing interests for the public goodthe 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-economicconsiderations

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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

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The Past

• Cost and Price Analysis

• Cost Audit

• Standard Clauses and Conditionshttp://ccua-sacc.tpsgc-pwgsc.gc.ca/pub/acho-eng.jsp

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The PresentAdd to that:

• The Federal Accountability Act

http://www.tbs-sct.gc.ca/faa-lfi/index-eng.asp

• Vendors’ Code of Conduct

http://www.tpsgc-pwgsc.gc.ca/app-acq/cndt-cndct/conduite-conduct-eng.html

• Perception of Bid Rigging issues (administrative reviews)

• Increased media attention (and Access to Information)

• Increased public awareness (value for money)

• Vendor Performance Policy

http://www.tpsgc-pwgsc.gc.ca/app-acq/arp-pns/ap11r2-pn11r2-eng.html

• Commissioner of Lobbying of Canada

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Vendors’ Role

• Associations role (peer pressure)

• Standards (ISO)

• Subcontractors (supply chain)

• Whistleblowers

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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

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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?

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Questions?

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Legislative and Regulatory FrameworkLegislative and Regulatory FrameworkLegislative 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)