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Procurement Perspectives: Growing concerns regarding outside consultants

0 97 Government

by Stephen Bauld

Over the last several years the papers have been reporting large consultant fees being paid for government projects.
Stephen Bauld
Stephen Bauld

A further area of general complaint relates to what may be described as the apparent abuse of the consultancy process. A clear abuse of the use of consultancy is where "consultants are hired as political payback and do little to no work."

Another is where a member of staff is incentivized to take a severance package and is then immediately hired back on a consultancy contract to do exactly the same work that he or she was previously performing as an employee. This is particularly evident when the new "consultant" is then paid a premium over his or her previous salary.

A third case of consultancy abuse arises when staff use a consulting contract to reward someone for past favours.

Some years ago, a municipality carried out a routine check of its consultancy contracts. It was surprised to discover that a large number of such contracts had been awarded to a former senior officer with the municipality for a price just below the point at which an open competition for the contract was required.

My company, Purchasing Consultants International, bids for many consulting contracts for all levels of government across Canada and North America.

These are related to procurement-type issues and we almost always get on the approved bidders list for five year contracts.

However, this is just the first step after taking the time to fill out 50-page prequalification documents. The next step is more difficult and requires you to bid on individual RFP's as they come out with respect to each contract related to the approved list, or Vendor of Record.

The scoring process on this section is usually measured against "experience 40 points, approach 30 points and price 30 points" for a total of 100 points. With this type of system of evaluation, the owner has a very wide subjective view on who they want to do the work. Often the evaluating team can affix points as they see fit to pick the company that want to work with. For the most part the lowest price is usually not the winner. It is critical as a consultant to call for a debrief every time you do not win a contract. The main reason for this exercise is to see how you can improve on the next bid and not continue to make the same mistake over and over again.

A common view is that of the "consultant as an oracle." Consultants, like oracles, are supposed to possess great wisdom. This wisdom is usually based on a mixture of research, training and real-world, hands-on experience. Consultants filling the role of oracle do not perform the work of their clients but, rather, guide the efforts of their clients. This requires both an appropriate understanding of their clients' needs and the timely dispensing of advice.

As a government organization you often see them continue to go with the large brand name consultant firms with high-dollar price tags. They rarely try smaller firms that could be better equipped to complete specific contracts.

A consultant should be hired to bring a specific and critical skill set to the municipality or any other levels of government that it otherwise would be lacking. For instance, the ability to solve some technical problem or to gather, manage and analyze data of a particular kind more efficiently than municipal staff.

When a rotation of consultants is used in government it can also play the role of a catalyst for change. Sometimes the internal forces within an organization stifle reform.

In such a case, the solution may require change within the organization and identifying what steps need to be implemented.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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