Procurement ombudsman says Federal buying policy unwittingly helping to create monopolies

Posted on July 26, 2010

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“A supplier taking all the work ultimately leads to a monopoly.  As the number of bidders shrink, service declines, and prices and profit margins creep upward, said procurement expert Jon Hansen, who runs a consultancy called Procurement Insights.”

from Federal buying policy raises alarm (Government unwittingly helping to create monopolies, procurement ombudsman says) by Kathryn May, Ottawa Citizen July 16th, 2010

Like the Carly Simon song “Coming Around Again,” it is interesting that just a few short years ago when I had made the above referenced statement it was generally looked down upon by government officials as being a lot of talk with little real meaning or substance.

After all, who could forget the Executive Director, Chief Information Officer, Treasury Board of Canada, Secretariat Bob Mornan telling me that everything I was saying, including my questions surrounding the award of a major contract to a vendor in which their promised savings could never be achieved, may very well be true but what was important is that the government followed bid procedures.

Ahh those were the days of the good old boys club when the Canadian Government’s oligarchical fraternity of ex-IBMers and the like would close ranks and politely snub their noses at both common sense and the rest of the world.

Bob of course has long since retired, and with him the memories of the golden days of the Canadian Way Forward initiative.  His legacy, and those who shared his arrogant sentiments, is that today the very tenets of Canadian government procurement in the first half of the decade have manifested itself in the recent announcement by the procurement ombudsman Shahid Minto, that the Fed’s policies back in 2005 had “unwittingly” helped to create monopolies.  Unwittingly?

Minto went on to say that the “market dominance by few firms may be an “unintended consequence” of the government’s 2005 decision to make standing offers mandatory for the routine goods and services bought by government.”

In the process continued the ombudsman “The government has inadvertently created the conditions (for monopoly),” and that “It’s not what the government intended to do and that’s why we think a review would be beneficial to see what the impacts are, including the unintended effects.”  Unintended consequence?  Inadvertently created the conditions and, unintended effects?

Perhaps Mr. Minto should visit the Ottawa Citizen archives for a story dated September 2, 2006 titled “Treasury Board reviews how PS fills top jobs: Treasury Board is reviewing a controversial program that has parachuted about a dozen high flyers from private technology and consulting firms into key executive jobs within the public service.”

According to the story, the “Treasury Board (was) reviewing a controversial program that (had) parachuted about a dozen high flyers from private technology and consulting firms into key executive jobs within the public service.”  Again IBMers (and the like) such as Mornan, Ken Cochrane and Dan Belanger, immediately come to mind.

Speaking from first hand experience, this tightly knit group as well as the others which infiltrated the government’s decision-making hierarchy was anything but unwitting, unintended or inadvertent in their manner and vision.  Surrounding themselves with sycophants or alternatively politically adept, practically neutered players such as Jamie Pitfield, where the government is today is by no means an accident.

The only real question is what took Minto so long to realize and then acknowledge the mess caused by these individuals.  Even more important, why the kid gloves in terms of the platitudes of incompetence?  I cannot help but feel that this is reminiscent of the Gerald Ford pardon of Richard Nixon.

In the most simplest of terms, Mornan, Cochcrane et al were nothing more than arrogant members of an exclusive club whose sole interest was being right versus actually getting it right.  Mr. Minto this, and this alone, is at the root of all your problems today.