Peter Diekmeyer of the Diekmeyer Report highlighted the contribution of Paul Emanuelli to a recent Canadian Public Procurement Council forum in Montreal in his article “Government Purchasing Professionals Beef Up Expertise” in Purchasing B2B Magazine (October 2014):
Learning from project failures
One of the major added values provided by the Canadian Public Procurement Council Forum was the ability that it gave participants to draw lessons from the experiences of others. Paul Emanuelli, general counsel and managing director of the Procurement Office (and a frequent contributor to Purchasing B2B) presented case studies of public sector procurement debacles in national defence, infrastructure, transportation, healthcare and energy that helped fire up subsequent discussions.
“Failures tend to recur in the same areas: failure to meet operational needs, stay within budget, deliver on time or to follow process rules,” said Emanuelli. “Project teams that ignore these ever-present risks do so at their peril.” The Harper Government’s mismanagement on the defence procurement front provides examples of all four categories of failure in acquisitions ranging from helicopters to ships.
Emanuelli quoted former general Andrew Leslie, who said that the government had “the worst record,” on military procurement of any government in the last 50 years and that it “can’t even buy a fleet of trucks painted green.” For example the Harper Government’s issuance of no-bid contracts to Lockheed Martin related to F-35 Lightning II joint strike fighters, the largest procurement in Canadian military history, violated a basic rule that any private sector procurement junior learns her first day on the job. According to an auditor general’s report, the government took key steps out of sequence. This led to bid specifications being drawn up advance at a low level in defence and public works department hierarchies, which effectively ruled out all competing options.
This resulted in the choice of a highly controversial aircraft, using widely optimistic forecasts as to projected costs, which were ultimately revised upwards four-fold. All this for an aircraft which Emanueilli quotes Michael Hostage, a US general, as saying is incapable of flying solo missions, as it cannot properly defend itself against enemy fighters.
The botched Joint Stike Fighter initiative, which is currently under review, provides a perfect example of what Emanuelli calls an “optimism bias” which characterizes public sector projects. This consists of small initial cost estimates, which tend to inflate as the project is accepted and gets underway, which demonstrates a pressing need greater rigour in initial estimates.
