This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
Public institutions must ensure that their contract award decisions are shielded from inappropriate political interference. To achieve this end, a clear definition of roles is essential to implementing accountability mechanisms and avoiding the unnecessary confusion and inefficiency caused by role overlaps and accountability gaps. In its review of municipal good governance standards, the 2003 Toronto Computer Leasing Inquiry/Toronto External Contracts Inquiry Report, known as the Bellamy Report, noted the importance of proper role definition in the procurement process:
Experts and practitioners alike agree that a lack of internal clarity with respect to the relative roles and responsibilities of different players in the procurement process poses a high risk for both the integrity of the process and the likelihood of a value-for-money outcome. This includes roles and responsibilities for the central purchasing authority, the buying department, legal counsel, finance/budget staff, etc.
The best practice in this area is relatively straightforward — to identify and describe these roles and responsibilities in clear and unambiguous terms as part of the overall purchasing policy and to embed these descriptions in training, guidelines, handbooks, checklists, case studies, etc. as part of ensuring a clear and consistent understanding across the organization.
In the aftermath of the Canadian federal government’s sponsorship scandal, Justice Gomery’s 2006 Restoring Accountability: Recommendations, Phase II Report, known as the Gomery Report, echoed these observations, noting that the sponsorship scandal arose within a climate of vague accountability structures that failed to properly define the role of ministers and their staff in relation to the award of public contracts:
In my first Report, I was able to establish that there had been partisan political involvement in the administration of the Sponsorship Program; insufficient oversight by senior public servants; deliberate actions taken to avoid compliance with federal legislation and policies; a culture of entitlement among political officials and public servants involved with Sponsorship initiatives; and the refusal of Ministers, senior officials in the Prime Minister’s Office and public servants to acknowledge any responsibility for the mismanagement that had occurred. I asked why it is that we have a system of responsible government, yet no one is prepared to accept responsibility for the abuses committed in the administration of the Sponsorship initiatives. No one has provided an answer.
As the Gomery Report noted, this lack of accountability resulted in a systemic collapse in proper procurement practices, as illustrated by:
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clear evidence of political involvement in the administration of the Sponsorship Program;
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insufficient oversight at the very senior levels of the public service which allowed program managers to circumvent proper contracting procedures and reporting lines;
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…
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the refusal of Ministers, senior officials in the Prime Minister’s Office and public servants to acknowledge their responsibility for the problems of mismanagement that occurred.
Where major public procurement projects are concerned, setting out the scope of roles and responsibilities is critical to avoiding overlapping accountability wherein no one is clearly accountable for decision-making or project outcomes, and to avoiding responsibility gaps that can leave critical issues unaddressed and unresolved. Given the often complex and multi-disciplinary nature of such large public infrastructure projects, it is crucial to establish a common, universally understood allocation of roles, responsibilities, and process roadmaps for the administration of both overall procurement practices and specific procurement projects. However, as the Gomery Report notes, the articulation of proper roles and responsibilities within the procurement process is neither clear nor universally understood:
There is a remarkable lack of uniformity in the abstract definitions of responsibility, answerability and accountability offered by the Government, by career officials and by academics. A cynic would say that each definition depends on the interests of the person proposing it or the particular circumstances under which the definition is required. Elected and career officials are left to try to make sense of these concepts in practice, and this ambiguity can make life difficult for those working in government. Clear and simple definitions are needed.
Public institutions require a coherent set of roles and responsibilities to help govern their major procurement projects. The failure to establish these clear support mechanisms and governing frameworks for a project team can lead to unnecessary delays and confusion, and can undermine the quality of the outcome by drawing attention away from the effective execution of a project and directing critical planning time towards the creation of ad hoc self-governance measures.
The Gomery Report emphasized the importance of establishing a clear understanding of respective roles between elected officials and public institutions:
The public service is the organ of government that is responsible for the administration of government programs. The public service has many responsibilities and commitments: to the public it serves; to the laws that govern its powers and management; to the Ministers who are the political heads of departments; to future governments that might some day be in power; and to the Parliament that passes the laws and approves the budgets administered by the service. Many of these obligations extend beyond the duty of the public service to the politicians who form the Government of the day.
These multiple responsibilities can create tensions between the duty of the public service to serve the Government and its ethical obligation to promote the public interest. Obligations and responsibilities create accountabilities. Resolving these tensions requires that two issues be examined: first, the role and identity of the public service apart from that of the Government of the day; and, second, the accountability of the public service, and particularly whether its accountability is entirely internal, within government, or whether Parliament should have a role as well.
As the Bellamy Report noted, elected officials on municipal councils can play a legitimate role in the procurement process by providing overall spending approvals and general oversight of the organization:
Experts suggest that in best practices jurisdictions — U.S. and Canada, federal, provincial/state, and municipal — elected officials understand the importance of remaining outside of the competitive tendering process. …
In discussing the role of politicians, most experts emphasize the up-front role of elected officials to:
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Approve procurement policies, including identifying which types of projects require their express approval.
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Ensure that a professional purchasing infrastructure exists.
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Pre-approve the organization’s purchasing requirements as part of the overall budget process.
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Approve any purchasing needs that exceed approved budgets before any formal purchasing activity is initiated.
For the most part, the above are seen as relatively straightforward and non-controversial….
However, the Bellamy Report also noted that it is in the self-interest of elected officials on municipal councils (and at all levels of government for that matter) to avoid direct involvement in specific procurement processes:
Experts suggest that one of the important benefits of a having a highly professionalized procurement function is the ability to insulate and protect politicians from allegations of attempting to influence procurement decisions …
To the extent that problems with political involvement in the procurement process arise, they tend to be either during or at the back-end of the process, e.g. at the contract award stage or in the handling of debriefings and/or complaints.
Unfortunately, the Bellamy Report noted that this ideal of enlightened “hands-off” political leadership is not always observed in practice. Its analysis of the municipal level of government in Ontario revealed that elected officials often exercise an inordinate and inappropriate amount of direct influence over the public procurement process, particularly when local suppliers are involved in the bidding process:
According to the experts, politicians do not always support fair and open competition, particularly when constituents are involved, i.e. not understanding that their direct intervention on behalf of a constituent would affect the fairness and equity of the process for other bidders. Typical examples of poor practices on the part of individual elected officials include:
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Becoming directly involved in the development of request documents including involvement in the development of the detailed specifications.
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Attempting to provide direction to staff with respect to any aspect of the request document’s development that would influence who might ultimately be able to bid on a project.
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Requesting or receiving copies of draft specifications or even complete request documents prior to their public release or out- side of the formal internal approval process.
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Meeting with bidders and/or their lobbyists after a request document has been released. (According to experts, in best practice jurisdictions, elected officials often decline meetings with bidders/lobbyists at an even earlier stage, i.e. once a certain stage has passed in the request document development process.)
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Directing or attempting to direct staff to waive or disregard mandatory criteria from a request document, e.g. missed deadline for submission, incomplete bid document, late amendments to a bid document.
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Entertaining complaints from bidders and/or their lobbyists with respect to a current or closed competition instead of, as a matter of course, referring the complainant to the appropriate internal complaints resolution process.
The Bellamy Report attributed part of this interference to a lack of clear role definition. It also noted a lack of appreciation on the part of some elected officials of the control mechanisms that are in place, or should be in place, to ensure the proper administration of procurement processes.
As a general rule, there should be no political influence over government contract award decisions. In his research study published in the Gomery Report “Defining Boundaries: The Constitutional Argument for Bureaucratic Independence and its Implications for the Accountability of the Public Service”, Professor Lorne Sossin acknowledged that some administrative procurement decisions, such as the creation of new spending areas, are appropriately subject to political considerations. However, he observed that a constitutional convention of bureaucratic neutrality should generally apply to buffer specific contract award decisions from political considerations and favouritism:
… First, the constitutional convention of bureaucratic neutrality operates to ensure that public servants owe a primary obligation to the Crown (and, by extension, to the people of Canada) and not to the party which happens to control the government of the day; and second, the rule of law ensures that executive decision-making is animated only by proper purposes, good faith and relevant criteria set out by law. Together, I argue, these principles represent a constitutional norm of bureaucratic independence. This norm suggests a requisite spectrum of separation between bureaucratic and political decision-making. In some areas, this separation will be near absolute, as in the case of criminal justice decision-making involving courts or prosecutors. In other cases, such as policy-making spheres, where political direction may be decisive, the separation may be subtle. The Sponsorship Program, and procurement generally, lie toward the end of the spectrum requiring more independence. While political direction may create a sponsorship program, for example, it is difficult to imagine appropriate political intervention in the decision as to which advertising agency to award a contract.
Rather than micro-managing specific projects and specific contract award decisions, the Bellamy Report suggested that the proper approach to be adopted by Ontario municipal councils to ensure accountability is to establish appropriate governing frameworks and support mechanisms for procurement staff:
Experts suggest that politicians who understand their role and the importance of fairness and equity in procurement would tend to focus on quality assurance, i.e. whether the approved process was followed and used appropriately. Only in the most exceptional circumstances would a staff recommendation be rejected or a competition cancelled. Even more unusual would be for a Council or Standing Committee to ignore a staff recommendation and make an award to another bidder.
Where this kind of understanding does not exist, the political level can often become overly and in the view of many experts, inappropriately involved in the details of the award. This could include wanting to review the RFP in detail, wanting to see actual bid documents, scrutinizing individual evaluations, meeting with individual vendors, etc. At its most extreme — and in terms of the integrity of the process, highest risk — this could involve a Council or Standing Committee beginning to engage in re-evaluating the bids and making its own decision about the outcome.
To maintain the integrity of the bidding process, contract award decisions, like the decision on the selection of a proponent for the award of a contract in a major project, need to be based on the objective application of transparent evaluation criteria. The integrity of the process and quality of the outcome can become compromised when the decision-making becomes politicized, is open to the influence of lobbying activities, or is otherwise based on factors other than the application of predetermined transparent criteria.
When establishing and defining appropriate roles and responsibilities for major projects, great care should be given to setting up a clearly delineated separation of roles between:
- elected officials;
- the senior management officials responsible for establishing and enforcing compliance with procurement rules; and
- the front-line procurement professionals responsible for specific procurement processes.
Elected officials, senior management, and front-line procurement staff should all have a clear understanding of the scope of the front-line procurement staff’s discretion to make tactical decisions and their need to be sequestered from inappropriate interference with that decision-making.
