The Ontario government spends $30 billion a year on procuring goods and services, said the Ontario Chamber of Commerce (OCC) this week, but often fails to deliver value for taxpayers, doesn’t foster new markets or spur economic development with its immense spending power.
Yet during the first year of pandemic in late 2020, the province created Supply Ontario, a Crown agency that is mandated to strengthen supply chain management and procurement involving provincial agencies, the health care sector, and other publicly funded educational institutions.
As to to the impact that government can have on the economy, the chamber points to the U.S. federal agency, DARPA (Defence Advanced Research Projects Agency) as a prime example of a government entity that helped launch the Internet, the Global Positioning System and other technological breakthroughs.
The main shortcomings of Ontario’s procurement process, the chamber said, is narrow focus on price versus long-term value, a lack of collaboration between the procurer and industry, excessive risk being placed on vendors, insufficient information sharing, and administrative barriers that discourage small and diverse-owned businesses from the bid process.
To toss some advice their way, the OCC released a report – Power of the Purchase Order: Modernizing Public Sector Procurement in Ontario – offering 23 recommendations to achieve better outcomes across the broader public sector with a focus on innovation, attracting investment from a range of businesses, and health care procurement.
Among the key recommendations in the report are:
- Rethinking Procurement: Embrace collaborative, value-based procurement (VBP) for complex purchases, with an emphasis on life-cycle costs, innovation, economic development, supply chain resiliency, and other long-term outcomes.
- Attracting Investment: Encourage participation through competitive contracts, transparent information sharing, and policies that support access for small, local, diverse, and green
- Innovating Health Care: Facilitate data sharing, ensuring health care procurement continues to be driven by technical expertise, and tackle implementation barriers to health care innovation.
“Procurement modernization is a major opportunity to transform health care and other public services, build more resilient supply chains, and improve value for Ontarians,” said Chamber President-CEO Rocco Rossi in a statement.
This report assesses the current procurement challenges in Ontario and offers 23 recommendations to drive better outcomes across the broader public sector, with a particular focus on innovation, attracting investment from a range of businesses, and health care procurement.”