SMEs and Procurement Reform

Background: Procurement Reform

The work to transform procurement is a wide-ranging Government of Canada strategy led by PWGSC to find innovative ways to deliver services smarter, faster and at a reduced cost. As the federal government's common services provider in procurement, PWGSC is committed to achieving the best value on behalf of Canadians. There are two fundamental objectives at the core of the transformation: saving money by maximizing efficiencies, taking advantage of economies of scale and leveraging existing expertise; and doing these things in an open, fair and transparent manner,preserving the confidence of Canadians in the fundamental accountability of government procurement. The transformation focuses on achieving efficiencies in three key areas: procurement, property management, and the use of information technology. The strategy also includes leading the government's efforts to green its operations.

Transforming Government Procurement

The Government is committed to saving $2.5 billion over five years by taking a more uniform approach in the procurement of certain goods and services, by consolidating the government's buying power to get better prices, and by using electronic tools to make the procurement process simpler and other steps to improve purchasing.

Recent changes include a requirement that all government departments and agencies use mandatory standing offers for the purchase of certain goods and services.

Savings on procurement will come from price reductions and from improved acquisitions management.

Price savings will accrue from two sources. First, the government will ensure that purchases are with low cost suppliers. Second, the government will negotiate price discounts with large suppliers.

The government will also extract considerable savings through better acquisitions management. First, these savings will come from administering fewer overall contracts. Second, administrative savings will come from significant systems automation, standardization and centralization. PWGSC, in cooperation with other key government departments, is well into the planning and implementation of the transformation of procurement.

The Effect on SMEs & the role of the Office of Small and Medium Enterprises (OSME)

The SME community has concerns about the procurement renewal initiatives underway and the impacts these may have on their ability to do business with government. PWGSC recognizes this fact, and is committed to continually monitoring the impacts of procurement changes on SMEs. The new Office of Small and Medium Enterprises (OSME) has been launched to support SMEs.