Tilting at windmills no
E-procurement up and running in Nova Scotia
by Barbara Webber
Anyone who has ever ordered or purchased goods and services is well aware of how much paperwork can be involved in the process. For government, time, volumes and costs can be tremendous. The Nova Scotia government has met these challenges with its new electronic bidding system, the Tender Opportunities and User Resources site ( www.gov.ns.ca/finance/tour/ ).
"A business can either submit a bid online or print to submit. We expect long-term that most people will bid online," says executive director of procurement, Greg Lusk. He emphasizes that the intention is to encourage competition and bids from all businesses, large and small. While not flashy, the site provides access to points of importance such as tender notices, policies and guides, related links, results/award notices, standing-offers, department contact, comments, and other information, as well as new policy releases, mission statement and overall principles.
Currently, the Nova Scotia government has most of its policy documents online. The department responsible for ensuring the purchase of goods, services, construction, and facilities for the province advertises through MERX and also allows MERX to obtain its information. Lusk explains that this year, if money is available, the province will have electronic ordering, inevitably moving that process to the desktop. People in the various government departments will be able to place orders electronically and feed them back into the system for payment. Cleaner, simpler technology will be invaluable for standing offers and catalogues.
Lusk is enthusiastic about the site as it gives local and regional suppliers a chance to compete. This is different from private marketplaces that are based on private-sector operating practices, he says, which "simply don't apply to government as it doesn't allow or encourage local or regional participation. We have an obligation to provide meaningful opportunity for local and regional suppliers.
"There was a concern, when we started the online bidding, that national and global businesses would come in and take over. What we found was that local suppliers are competitive." That said, Lusk admits the reality that the larger market dictates; however, he feels that only raised the bar for local suppliers.
The system saves time and therefore money, but, argues Lusk, that was not the reason for the change. "We developed our systems with the premise of supporting businesses and our departmental customers and made our mandate how best to supply those services. We also looked at what the system itself could support."
The team developed the system in an informal manner and Lusk explains that "to date, we have not had an incremental budget for developing the system. There has been no additional funding. This has been accomplished through the dedication of the team, who, through sheer enthusiasm and technical skill, made the electronic bidding system a reality."
Lusk, responsible for Real Property and Procurement, heads the team of professionals. His background in procurement includes more than 10 years with the Alberta government, three years with the Saskatchewan government and now over six years with the Nova Scotia government. Lusk describes Ernie Englehart, the director of Information Technology, Acquisition responsible for this particular project, as "a visionary from the outset." Jim Donohue developed the website and bidding application and Tim Bateman oversees the electronic standing offers.
Lusk calls his team the Don Quixotes of this procurement philosophy, adding that people didn't think it could be done. Now, it is becoming a prototype. "Everybody is acutely aware of having to move down this path." Alberta is talking about having electronic ordering, and recently the federal government visited with Lusk and examined the Nova Scotia site.
One of the major concerns, he says, is how to begin to coordinate practices and understandings with other governments and exchange information. Intensely involved in cooperating with other governments, Lusk is a member of the Canadian Public Procurement Council and the Internal Trade Secretariat Electronic Tender Working Group. He is actively involved in facilitating dialogue, getting federal, provincial, and municipal governments, as well as public institutions such as hospital boards, to talk and cooperate. "[Nova Scotia] has a good working relationship with other provinces, especially Prince Edward Island, New Brunswick and Newfoundland. The Atlantic Procurement Agreement and the Atlantic Procurement Coordinating Committee enables conversation about regional and local issues and how best to coordinate efforts. There is some joint buying currently, such as school buses and snowplow blades. There is trust, respect, sharing of resources."
Although Lusk says the cost-saving argument for developing the system wasn't an issue, it does save money. "We took a very conservative estimate - $75-$150 per transaction. The reality is we can reduce these costs to approximately $30 or less. The problem with the savings argument, however, is that unless you can actually capture the cash savings, it is hard to convincingly argue that you have saved anything. You may be more effective or efficient but you can't demonstrate tangible savings.
"The other reality is that everyone is having their budgets reduced, so you have to act and manage within your budget allocation - and, there is that part of our philosophy that says participating in public procurement should be free-of-charge." The only charge is for larger project drawings. Even then, technology has changed so that some drawing incremental costs are very low.
According to Lusk, it's about managing change. "Technology exists. So we used the technology to very critically assess what constitutes providing service, public access and providing opportunities to give good value for public expenditure.
"I view procurement as the inverse of marketing in that it provides the critical inputs and support to help the organization perform its mandate well and strategically manage consumption of the organization. Government has an impact on the community and must be respectful of the needs of the public. What we are trying to ensure is that we craft a process that satisfies these criteria. We must demonstrate a fair, equitable process that provides value."
Lusk sees process simplification and streamlining in the future as "people spending their time providing expertise and knowledge, guidance and services as opposed to filling out a form. No machine can replace the flexibility of human judgment, intuition and interpersonal relations. Technology is as a tool to free our buying professionals to be just that, professional."
Barbara Webber is a freelance business writer based in Halifax.