Why Is It Important to Undertake Good Planning …

1 Why Is It Important to Undertake good PlanningBefore undertaking a Procurement Process?Andrea DemeAUTUMN 2009 FMI**IGF JOURNAL11 This topic will be explored from within thecontext of federal government procurementprocesses, however, sound Planning is anactivity which would be of benefit in any fieldin which public (and private) sector officialsmay find themselves engaged. As in alldepartments and agencies, contracting or theprocurement of goods and services is a legit-imate managerial option to support Planning is seen to beimportant, and even more so inlarge and complex, multi-yearand/or multi-million dollar requirements,where people will change over time orrequirements will evolve and where riskand scrutiny increases. Nevertheless itwould appear that good Planning is notdone as often as it should be.

2 As a keyproject activity, the need for planningappears to be underemphasized at the ini-tial stages of procurement projects but theabsence of it is highlighted at projects end. Procurement Planning is supportedand encouraged by project managementexperts and government departments(TBS, PWGSC and OAG1to name afew) because the procurement/resultingcontract can lead to dissatisfaction andtime-consuming detours when it is notdone; and its absence is usually the causalfactor identified when auditing theentrails as to what went Office of the Auditor General ofCanada (OAG) has often emphasized theimportance of Planning within its audits having found that Planning documen-tation or some evidence on the file thatplanning took place is what is often miss-ing in the audit review process, and usu-ally something that is pinpointed asabsent when things go all recall headlines of contractsgone wrong - those with amendmentsfor billing dollar increases overtime ( than two times the initial value),evidence of reduced contractual control( extensive subcontracting withoutdepartmental approval), frequent anduncontrolled changes in the scope orrequirements of the work ( scopecreep)

3 , etc. The underlying messagewould appear to be that if only they hadplanned, these outcomes might havebeen avoided or aspect of contracting that attractsnegative observations in every depart-ment or agency is the use of amend-ments. Some amendments are necessary requirements can and do change orevolve. The key is to anticipate, wherethe department can, what these changesmight be or if not possible, to build acontract structure that will help themanager manage the change effectivelyand fairly (and the Contractor to man-age that change too).2 Treasury Board s Contracting Policyallows for amendments, but a series ofamendments to a single contract maysuggest poor Planning or managementand has been used by the OAG as a flagin its sample selections for some beware: all departments subjectto the Contracting Policy of the Gov-ernment of Canada (GoC) must submitreports on contracting activities.

4 Therisk of a public gotcha by an auditingdepartment, the media, suppliers and thepublic should not be the only reason formanagers to plan their procurements. Atthe end of the day, projects and procure-ments should be well planned for rea-sons other than exposure or reputationalrisks; they should be well planned toensure the establishment of compliantand effective contract mechanisms thatwill ensure the provision of qualified,capable and professional results todepartments. The analysis necessary to achieve bestvalue should not be confined to the actualprocurement process; it should begin in theplanning and appraisal of alternatives andcontinue through the definition ofrequirements. Treasury Board (TB) Contracting PolicyThere would appear to be very littlepolicy guidance for government officials,with the potential that obligations thatexist in relation to procurement plan-ning may be easily overlooked.

5 Perhapsgood Procurement Planning is not wellunderstood or is perceived to be a time-consuming activity with the potential toslow down the procurement process;either way, it might not be as hard aspeople ResourcesThere are some resources available togovernment officials and existing guid-ance and guidelines for the activity ofProcurement Planning within the feder-al are government procurementunits or contract/procurement reviewcommittee processes that may be inplace (to a greater or lesser extent with-in departments/agencies) that can sup-port the Project Authority in planningan acquisition. These processes can behelpful, but can also be perceived asslowing the procurement process also usually occur at a point in theprocurement process after the horse hasGOOD Planning before PROCUREMENT12 FMI**IGF JOURNALVOLUME 21, NO.

6 1left the barn so to speak. Contract/Pro-curement Review may occur just prior tocontract award, or just before an RFP isready to go out, while still valuable as afinal verification before the contract issigned, this is well after the requirementshould have been appropriately Treasury Board ProcurementReview Policy3is mandatory for anyprocurement in excess of $2 Million andessential for projects costing $20 millionand up. Public Works and GovernmentServices Canada (PWGSC) providesadministrative assistance to this manda-tory process. The policy s objective is toenhance the use of procurement in sup-port of industrial and regional develop-ment and other national objectives in amanner that is fully consistent with thegovernment s approved procurementobjectives, 4and with Canada s interna-tional commitments within the WorldTrade Organization (WTO), the NorthAmerican Free Trade Agreement(NAFTA) or other trade rights and major element of the interdepart-mental procurement review process isthe application of an evaluation frame-work.

7 This framework is utilized toassess proposals in support of the pro-curement objectives. A ProcurementStrategy Committee, chaired byPWGSC with participation from a num-ber of departments and agencies, pro-vides guidance to review committees onprocurement objectives and criteria to betaken into account in the Planning ofindividual procurements and the con-duct of socio-economic analyses of indi-vidual or aggregated procurements,required under the evaluation frame-work, as early as possible in the require-ments Planning procurements required to under-go these review processes, the documen-tation required or produced through theCommittee process may provide someplanning documentation. As witnessedwith numerous department acquisitions,review of previous contracts and relateddocumentation, including lessonslearned and best practices, can also helpplanning the next are numerous GoC and profes-sional sources that emphasize the impor-tance of Planning (TB, the PWGSCS upply Manual, OAG audits/reports;and the Project Management Body ofKnowledge (PMBOK) Guide5and otherProject Management sources).

8 Chapter 6 of PWGSC s Supply Man-ual6, which contains PWGSC s depart-mental purchasing policies andreferences to relevant government lawsand conditions, outlines the guiding pro-curement strategy approval processes forall requirements $50,000 and over. TheContract Planning and AdvanceApproval (CPAA) or formal Procure-ment Plan must be approved before theNotice of Proposed Procurement,Advance Contract Award Notice or bidsolicitation request for standing offer isreleased. As a practical guide for man-agers and contracting officers, Section6F provides a Solicitation Checklist tobe used in Planning and preparing a bidsolicitation, by ensuring that require-ments are clearly defined and policy andrisk items have been considered, such asgovernment sourcing procedures anddepartmental policies.

9 Relevant infor-mation ( statement of work, evalua-tion criteria and contractor selection,security requirements and special claus-es, basis of payment, etc.) is then to beincluded in the bid approval processes and plan-ning tools aim to reduce the risk of adepartment s non-compliance with anygovernment contracting and depart-mental policies, one of the problems ofpoor procurement Planning . Depart-ments would be forced to re-tender anysuch examples, a costly endeavour, bothin terms of dollars and Treasury Board Secretariat s Proj-ect Management Policy7requires proj-ect leaders to follow, and include inproject agreements, standard projectmanagement principles, such as theguidelines set out in the Policy togetherwith those found in the Project Manage-ment Institute s PMBOK.

10 In accordancewith the Project Management Policy, project leaders must ensure that projectmanagers perform adequate projectplanning that addresses the size, scope,complexity, risk, visibility and adminis-trative needs of specific projects. Appli-cable to procurement Planning , thePolicy provides guidance for projectmanagement practices, and the prepara-tion of risk assessments, Project Profileand Risk Assessments (PPRAs), support-ing documentation, and progress andevaluation reports in Appendices Bthrough addition to some coverage andoverlap of the requirement/recommen-dation to plan procurement within TB smain Contracting Policy, on April 16,2009, the Treasury Board Secretariatissued a revised draft of a proposed pol-icy on managing procurement.