Public Works’ procurement changes rile CATA, SMEs

John Reid, president of Canada’s largest high-tech association, still wonders how plans to reform the way vendors do business with the federal government went so far without anyone noticing.

According to Reid, changes proposed by Public

Works and Government Services Canada (PWGSC) could create closed standards, complete with selected suppliers through which other vendors would have to work through in order to take part in government contracts. This could exclude many technology firms from procurement opportunities, said Reid, who leads the Canadian Advanced Technology Alliance (CATA)

It may all boil down to small and medium enterprises (SMEs) depending on the good graces of the larger companies named as the government’s preferred suppliers, said Reid, and many of these larger entities would have little incentive to divvy up the awarded contracts.

“”People are not widely aware of the developments. I’m incredulous as to how we let them (PWGSC) get this far down the road,”” said Reid, adding backroom politics led to the creation of the new structure the government is promoting. “”We were able to get our hands on some of the internal documents…All of these changes have been made.””

In one internal e-mail CATAA obtained and passed on to ITBusiness.ca, David Marshall, Deputy Minister of PWGSC, informed colleagues about proposed changes in the procurement area that would better allow the government to negotiate favourable prices. Dated Mon., Dec. 20, 2004, the message suggested that significant cost savings of $1 billion a year could result from the strategy expected to be adopted over the next five to eight years.

CATAAlliance has also opposed to PWGSC’s plans to create a Special Operating Agency to manage the gateway to procurement and contracts. Instead, it has suggested a number of solutions such as creating a procurement auditor who would report to Parliament and establishing U.S.-like set-asides programs that would create opportunities for SMEs.

Mario Baril, a spokesperson for PWGSC, said the federal government is not only committed to providing a level playing field for suppliers, but also determined to considering the interests of SMEs in the procurement process.

“”Proposed changes, such as making procurement documentation more user-friendly, developing more targeting qualification requirements and (encouraging) greater use of e-commerce would make it simpler and less burdensome for suppliers to do business with government,”” Baril said via e-mail.

Because the proposals being promoted by PWGSC would take years to implement, “”there’s still time to influence the process,”” said Joanne Stanley, vice-president of marketing for CATAAlliance, stressing her organization has already started mobilizing industry support.

Infoterra Inc., which provides grant management solutions to automate public sector and non-government grants and contribution programs in Canada, the United States and Australia, is one of the companies throwing its support behind CATA’s awareness campaign.

“”The challenge we see as a boutique software provider…is (the reforms) risk shutting out vendors like Infoterra,”” said Peter Andrews, CEO of the Ottawa-based firm. Because it offers set-asides programs designed to allow smaller businesses to do business with government, he said, the U.S. government is becoming an increasingly attractive customer. “”It’s easier to do business with the U.S. government than it is to do business with the Canadian government.””

John Foreman, vice-president of marketing development, application services at CGI Inc., Canada’s largest independent IT services firm, said his company would continue working with smaller firms even if PWGSC’s reforms proceed.

“”Procurement in the government space is always a difficult area,”” said Foreman, who also sits on the CATAAlliance’s board of directors. He added CGI would have a problem if the government made the procurement process more restrictive. “”We don’t believe the changes they’re suggesting are gong to achieve the best (results).””

Contemplating the back-and-forth arguments between those for and those against the possible changes, Massimiliano Claps, senior research analyst at IDC Canada Ltd. in Toronto, said it’s possible for PWGSC and the Canadian IT sector to benefit from the reforms. According to Claps, the federal government can simply follow the lead of the U.K government’s Office of Government Commerce (OGC). The OGC has created a couple of lists of pre-qualified vendors, he said, but it also enables other businesses to apply to be added to the lists.

“”As long as the process is transparent and open, there are few risks of being excluded,”” said Claps. “”(PWGSC’s) intent is to reform the procurement and to fulfill the strategic objectives to save money.””

But these changes, if carried through, would be disastrous to SMEs, insisted CATA’s Reid, who said that in addition to meeting with Members of Parliament, his organization is also alerting members about what’s at stake. A survey on its Web site, for instance, enables members to weigh in on the issues.

“”We’ve done a significant amount of mobilization,”” said Reid. “”We’ve met with Members of Parliament in the Liberal Caucus and department leaders who are not on side with this…We’ve gotten over 100 companies that have given input on what this will mean to their businesses.””

The next step will involve participating in consultations with the government covering how the reforms will proceed, he said.

Comment: info@itbusiness.ca

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