Public Works and Government Services Canada

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Public Works and Government Services Canada
The Way Forward -- Procurement Transformation
FMI - Professional Development
Week November 22, 2005 Emmy Verdun PWGSC
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Where We Came From Expenditure Review Committee

• Established December 2003 by Government of Canada
  to
• review all government spending to ensure value
  for taxpayers' money,
• reallocate the savings to fund higher priority
  programs and services
• Recommendations reflected in Budget 2005 change
  the way the Government of Canada purchases goods
  and services and manages office properties.
• Over five years, commits the government to
  savings of
• 2.5 billion in procurement
• 925 million in real property

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What was found From Review to Implementation

• The Way Forward Initiative
• The Way Forward is a wide-ranging strategy led by
  Public Works and Government Services Canada
  (PWGSC) to find innovative ways to deliver
  services smarter, faster and at a reduced cost,
  and to improve how the Government of Canada does
  business.
• The Way Forward is part of PWGSCs ongoing
  commitment to help modernize government and
  provide the best service to Canadians. It is also
  part of the governments agenda to improve
  management and accountability, save money and
  reallocate the savings to higher priorities
• There are two fundamental, interrelated
  objectives at the core of The Way Forward
• saving money by maximizing efficiencies, taking
  advantage of economies of scale and leveraging
  existing expertise and
• doing these things in an open, transparent way so
  as to preserve the confidence of Canadians in the
  integrity and fairness of the Government of
  Canada.

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Areas of Opportunity From Review to
Implementation

• The Focus is on increasing efficiencies in three
  key areas
• Buying smarter
• save 2.5 billion over five years on total
  procurement by
• reducing the price of goods and services by 10
• cutting the time it takes to buy goods and
  services by 50
• reducing internal procurement costs by 10.
• Exploring savings in real estate
• cost savings of 925 million over five years.
• Taking full advantage of information technology
  systems
• fundamentally change the way the GoC serves
  Canadians through
• secure Channel
• whole-of-government" approach to information
  technology and
• better management of IT services and products.

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Examples found Elsewhere
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Actions to Date

• Legislative/Regulatory Changes
• Spend Analysis
• Use of Standing Offers Mandatory for 10
  Commodities on
• April 1, 2005
• Commodity Management
• 5. Performance Measurement

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Spend Analysis

• Scope
• - All spending on goods and services except
  specifically excluded categories.
• Deliverable
• - Procurement savings opportunities report
• - Basis for development of plan with PWGSC and
  department to achieve savings targets.
• Status
• - Spend analysis completed for 29 departments
  representing 76 of the total government spend
• - Work on remainder continues
• - Development of savings opportunities reports
  ongoing
• - Meetings with departments to be scheduled after
  savings targets for 2006-07 announced.

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Commodity Management is the best practice
approach for managing spend and suppliers to
reduce total cost

• It is important to note that Commodity
  Management is not a stand-alone framework.
• On its own, it will not realize the procurement
  savings that the GoC is looking for.
• There are 3 key and interlocked components

• Status Report
• 7 Commodity Councils and 14 Commodity Teams
  established
• Led by PWGSC experts
• Participation by client departments and input
  from suppliers

Technology GoCM
Processes (commodity management)
People (Employees must be fully trained in
strategic sourcing and commodity management.
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Performance Measurement Plan
April 06 ? April 07
November 05 ? March 06
October 05

• Completed
• Cost Savings forSelected Commodities (HQ only)
• S.O. usage from Vendors captured (report on 10
  mandatory S.O.s only)

Phase 1

• Next Steps
• Cost Savings forAll Commodities Regions
• Process Savings captured(PWGSC only)
• Cycle Time
• Admin Costs
• Reporting period - monthly
• Performance Managementprocess evolving

• Engage Client Departmentsas data sources
• Improved S.O. Reporting System (all Master
  StandingOffers)
• Linkage to electronic marketplace systems

Phase 2
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Conclusion

• PWGSC is committed to producing procurement
  savings of
• 2.5 billion over the next 5 years.
• Full transformation of government procurement
  will take 5 to 8 years.
• To succeed, there must be continuing co-operation
  between PWGSC other departments.
• Sustained commitment will also be required.