Overview

The Government of Canada spends approximately $20 billion a year on various goods and services. This includes specialized goods such as military hardware as well as many goods and services – information technology, temporary help, furniture, cars, hotel rooms and airline tickets – that are common to most large organizations. The common goods and services category accounts for over $1 billion of spending per month, amounting to $12 - $14 billion per year.

The new Government of Canada (GC) is committed to providing Canadians with fiscal prudence and better stewardship of their tax money. It will save $2.5 billion over five years by changing how the government buys goods and services. More specifically, it will improve the design, management and delivery of procurement across government. These important savings will be used to finance other priorities of Canadians.

Why transform procurement?

The new government has a responsibility to get the best possible value for money on behalf of Canadians and to do so in an accountable and transparent manner. Best value is not just about price. It includes quality, the ability to meet the government’s specific requirements, experience, etc.

The procurement of goods and services is an important component of program and service delivery to Canadians. Just like any other part of program and service delivery, procurement needs to be constantly improved.

In conducting this transformation, PWGSC is committed to:

Ensuring increased transparency and accountability in the procurement process;
Making it easier and less costly for suppliers to do business with government;
Improving access for SMEs to compete for procurement;
Considering economic and social impacts (Aboriginal, regional and environmental);
Consulting with affected industry sectors.

How is the government proceeding?

The government is modernizing how it purchases a number of goods and services bought by most departments (like computers and temporary help¹). The government will adhere to the following procurement practices:

Functionality rather than brand, technical and supplier based specifications. This allows suppliers to propose innovative products and solutions to meet functional needs.
Fewer models and configurations. The goal is to reduce the range of goods (e.g. from hundreds of models of chairs to a few dozen), but maintain reasonable choice.
Factoring value into the evaluation of goods and services. This means quality and other factors are considered, not just price.
Active price competitions and taking advantage of market prices. This is not new. It gives suppliers an opportunity to update their prices periodically to reflect changing market conditions.
Supply continuity with the qualification of multiple suppliers for certain goods and services.
Ensuring that government operations in every region have access to local support where this is needed (e.g. printers).
Level competitive playing field and open, fair competitions which will reduce the cost of bidding. For instance, testing for furniture will be performed after successful award of business rather than as a requirement to bid, and testing will be conducted on far fewer models.
Steps to make it easier to compete and conduct business with the government. For example, joint bids from consortia of small firms will be treated equally to bids from large firms.
More business for suppliers who win competitions.
Faster execution of orders. Using standing offers will result in procurements being done in 1-4 days rather than the current 30-60 days.
Using electronic tools to have more information about who buys what, when, at what price and from whom. That information will then be used to negotiate even better value for Canadians.

In addition, PWGSC is working to improve access for SMEs by:

Increasing opportunities to bid;
Addressing possible barriers for SMEs to compete; and,
Reducing the complexity and costs of doing business with the Government of Canada.

PWGSC has already taken other steps to address the needs of SMEs by:

Opening regional Offices of Small and Medium Enterprises (OSMEs) across Canada;
Eliminating fees to compete on the Government of Canada’s electronic tendering system (MERX); and,
Using plain language templates for bid documents and contracts that are simpler and shorter.

Ongoing consultations

PWGSC understands that the transformation of federal procurement practices is a significant change. A change that requires consultation with industries and suppliers.

PWGSC routinely consults with industries and suppliers in the course of its activities. And it will continue to do so as it considers and implements changes. In addition, for three specific and complex industry sectors (temporary help services, informatics professional services, and furniture), the department has asked an independent third party – the Conference Board of Canada – to conduct formal consultations.

Procurement transformation will deliver better value for Canadian taxpayers, increase accountability, and simplify procurement. The government will be a more demanding customer. This is what taxpayers expect.

To obtain more information on the Procurement Transformation initiative, please visit www.pwgsc.gc.ca.

The core supply categories list (commodities) includes:

Ground Effect Vehicles, Motor Vehicles, Trailers and Cycles;
Telecommunications, Equipment and Accessories;
General Purpose Automatic Data Processing Equipment, Software, Supplies and Support Equipment;
Furniture;
Office Supplies and Devices;
Clothing, Accessories & Insignia;
Fuels, Lubricants, Oils and Waxes;
Information Processing & Related Telecom Services;
Professional, Administrative and Management Support Services;
Travel, Transportation and Relocation;
Health Services and Related Financial Services & Medical Supplies and Equipment including Drugs and Vaccines;
Others.

For procurement purposes, these categories will be subdivided as required.

¹See the common commodities list at the end of this document.