This article is an excerpt from the 2020 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In Report 5—Equipping Officers of the Royal Canadian Mounted Police of the 2019 Spring Reports of the Auditor General of Canada to the Parliament of Canada, the Auditor General found that the Royal Canadian Mounted Police (RCMP) engaged in non-compliant procurement practices in relation to the purchase of light automatic rifles. The report concluded that, due to inadequate planning and decentralized procurement practices, the RCMP breached applicable procurement rules by engaging in contract-splitting in relation to the purchase of carbines.
As the report noted, since 2013 “the RCMP has acquired carbines by using standing offers established through the Munitions Supply Program, which is managed by Public Services and Procurement Canada” and that these arrangements “allow the RCMP to purchase carbines when required, through a call-up process” in which a “separate contract is formed each time a call-up is made against the standing offer.” However, the Auditor General found that after the initial acquisition of the carbine units, the RCMP’s decentralized purchasing practices led to flawed planning, which caused non-compliant practices, including improper contract-splitting:
Inadequate planning. We found that the RCMP did not have a plan for acquiring carbines after buying the first 527 carbines in 2012. It did not establish a national standard for the location and number of carbines required to ensure that its officers were adequately equipped. Rather, it expected divisions and detachments to make these decisions.
The decentralized approach contributed to the RCMP and Public Services and Procurement Canada not following procurement rules. In June 2015, the RCMP received orders from its divisions for an unusually large number of carbines. Under procurement rules, the RCMP should have submitted these orders to Public Services and Procurement Canada as a single request. However, this request would have exceeded Public Services and Procurement Canada’s own purchase authority and therefore would have required approval from the Treasury Board. Instead, the RCMP split the order into three requests, which Public Services and Procurement Canada ordered under its own authority.
In our view, this situation was a missed opportunity for the RCMP. The Treasury Board’s challenge function would have prompted the RCMP to define the objectives of the carbine acquisition and how it intended to meet them, contributing to better planning. As acquisitions increase in value, additional scrutiny is added to the acquisition process to ensure that taxpayers’ money is spent effectively.
The report also found that weak inventory management practices resulted in avoidable delays in the ultimate delivery of the carbines to the various RCMP detachments across the country:
The RCMP also did not consider all of the life-cycle stages of the carbine project, such as planning to meet the ongoing recertification needs for officers to safely operate the carbines. Nor did the RCMP plan for the need to maintain the carbines over the long term, and it had fallen behind in maintaining them. We also found that the RCMP did not provide its armouries with more resources to manage the addition of more than 5,500 carbines. In addition to conducting preventive maintenance on the carbines, the armoury was also responsible for assembling each one. We found that it took about four months for the manufacturer to deliver the carbines, and the armoury then took about five months to assemble and ship them out.
As a result, divisions that identified a need for carbines faced about a nine-month period between ordering them and receiving them in the field. In our view, had the RCMP properly planned this project, it would have been able to anticipate the increase in the armoury’s workload, as well as in recertification demands, and could have planned the appropriate increase in capacity as part of the acquisition.
Recommendation. The RCMP should properly manage acquisition projects, including ensuring that life-cycle requirements, such as training and maintenance, are addressed.
As the Auditor General concluded, better life cycle management can help ensure timely and compliant deliveries in areas of repeat commodity purchasing. In long-term demand areas, purchasing institutions should establish compliant framework agreements to help facilitate more expeditious and co-ordinated delivery arrangements.
