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Procurement

Roundtable roundup: Best practices for crown corporation procurement

At Bonfire, we get to work with hundreds of public procurement professionals every day. Our platform connects you to tools and resources that make your jobs easier. But we also do our best to connect you to each other, so you can reap the benefits of working together.

On March 15, we brought together procurement professionals from crown corporations across Canada for a virtual roundtable discussion. Participants heard from industry experts, shared best practices, and forged new connections with their peers.

If you missed the event, don’t worry! In this post, we’re rounding up all the highlights, so you can put some of the big themes and takeaways from our conversation to use.

What general policies do crown corporations follow when it comes to procurement, POs, and contracts?

Crown corporations purchase a variety of goods and services, from professional services to technology to general goods. Roundtable participants said under a certain threshold (around $100K for services and $25K for goods) their client departments have full discretion on how to source. If the amount is over the threshold, sourcing is led by the procurement team, whether through a public bid, NOI, or limited tendering option.

Most agencies require a purchase order (PO) for almost every purchase in order to issue payment. A small minority of purchases can be governed by PO terms but, in most instances, a supporting contract needs to be executed prior to the PO being created. Depending on the purchase, contract lengths are generally 3-5 years with the option for renewal.

How are crown corporations in Canada levelling up their procurement practices?

For the most part, the folks who attended our roundtable said their organizations use an assortment of disconnected systems and tools for different parts of the procurement process. Going forward, the agencies that use a patchwork approach are working towards adopting a single tool that will streamline their processes and support procurement success.

Bonfire allows them to bring every stage of the procurement lifecycle into a central platform where the procurement team and relevant stakeholders can collaborate on RFPs and evaluations with full visibility into the process. eProcurement is appealing because it can help agencies move the needle on strategic goals, including project efficiency, stakeholder collaboration, and vendor engagement.

What strategies are crown corporations using to deal with the current price uncertainty in the market?

Inflation is a real concern for public sector budgets today. When we asked participants how they’re approaching price uncertainty, they spoke about the importance of system portability. With prices for cloud-based software-as-a-service (SaaS) subscriptions fluctuating relative to the market, it’s important to make sure you can stay on top of fees and look for alternatives as required.

We also discussed the strategy of reverse auctions in which suppliers compete to offer the lowest price possible. Vendors can see each other’s pricing (usually in real time) and try to beat those bids by going lower. The end goal is to drive purchase prices down for the buyer. In Canada, procurement professionals are hesitant to use this method, although they recognize that it could be a useful tool for certain types of projects. Overall, participants worried about getting overly involved in price, since it could negatively impact relationships with vendors.

How important is planning to procurement project success?

According to Canadian procurement lawyer Paul Emanuelli, 95% of project failures are caused by poor project planning. With that in mind, roundtable participants talked about how the early steps of a project impact their overall procurement outcomes.

Participants agreed that shortchanging the planning stage of the procurement process ultimately leads to problems downstream. Not only does poor research and requirements gathering create bottlenecks, it also leaves the outcome to chance and makes it difficult to determine if project objectives have been met.

While it can be difficult to get business owners to spend the time upfront on the planning process, ultimately, this approach saves time and mitigates risk down the line. Proper planning allows clients to achieve their goals within their timeline, ensures agencies allocate the right internal resources to support projects, and enables vendors to meet client expectations. On top of that, a thorough approach to planning minimizes change requests and cost overruns, while making sure potential risks are identified and transferred, mitigated, or absorbed appropriately.

How are organizations promoting diversity and sustainability in their purchasing strategies?

Vendor diversity and sustainability are becoming increasingly important for procurement teams. For many of our roundtable participants, this focus is being driven by organization-wide mandates. Folks shared how their teams are doubling down on these priorities, including:

  • Engaging consultants
  • Developing policies and strategies
  • Creating guidelines and tools (e.g., tip sheet for low-value purchases)
  • Enhancing RFPs (e.g., opportunity identification worksheet, clause menu, evaluation criteria)
  • Conducting pilots (e.g., starting with high-impact RFPs with eventual rollout to all RFPs)
  • Providing training for staff and internal clients
  • Recruiting a dedicated resource to focus on social purpose and sustainable procurement

 

As part of their approach, agencies are including new types of social, economic, and environmental sustainability criteria in their evaluation grids. They are aligning evaluations to policy areas, such as environmental impacts, social impacts, and Indigenous reconciliation.

Of course, increasing vendor diversity involves contracting with new suppliers, which comes with its own set of challenges. Participants shared that factors like due diligence, manual processes, and compliance reviews all create bottlenecks in the process. eProcurement can help resolve many of these issues and improve vendor engagement by automating tasks, keeping processes transparent, and supporting 100% compliance.

What Canadian-specific procurement resources do you use?

To close out the session, participants let us in on their go-to sources for public procurement best practices, industry news, and support, including:

  • Networking with other Canadian procurement professionals
  • Webinars and resources from Canadian procurement law firms like Paul Emmanuelli’s
  • Provincial and federal government resources
  • International procurement websites that cover issues faced in Canadian procurement

Be part of the community

Are you ready to discover more support from your public procurement community? Join Bonfire’s Open Access Community Projects today to continue leveraging your peers’ insights through free RFP templates and project planning resources.

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