e-Government & the perils of procurement

At the outset of this series, four main challenges were put forth as keys to the public sector’s transition into a world of e-governance: democratic renewal, procurement and partnerships, human resource management, and security. Building on the preceding look at the first theme, this column now turns to procurement as a major determinant of success or failure in the realization of the promise of e-government.

There are many misconceptions surrounding this topic. Mention procurement, and many strategists in government might role their eyes or tune out altogether, leaving the area to more die-hard legal and technical experts. With respect to information technology in particular, many senior decision makers in government still are not beyond the view of IT as “informatics” – backroom, boring and simply not on the radar screen.

An equally important danger is the misconception of e-procurement as the logical lens through which to view purchase management in an online era. While e-procurement makes sense for transacting goods and services of a rather static and straightforward nature (such as pens and tables), it has little relevance for a digital world in which technology is strategic and fraught with risk and uncertainty.

Of course, many government managers, particularly those overseeing large scale IT projects, understand this distinction quite clearly. The Government of Canada, for example, has responded with a reform package called Benefits-Driven Procurement, an initiative that seeks to rebalance the need for cost and control mechanisms on the one hand and performance incentives and risk sharing on the other. So why, then, is BDP not front and centre in discussions about Government On-Line, the federal e-government program?

The answer is that notwithstanding glowing rhetoric, BDP does little to free IT procurement and project management from the shackles of central control. This new approach to procurement remains firmly in the domain of Public Works and Government Services Canada (PWGSC), the de facto central agency in charge of overseeing the massive amounts of purchasing and contracting undertaken by the federal government. PWGSC faces the impossible task of being both the guardian of the public purse and a catalyst for innovation.

As a response to this conundrum, the procurement of IT is gradually shifting to the Treasury Board under the auspices of GOL. The logic is clear enough: the horizontal coordination required for an effective online presence should be the domain of the Management Board where the CIO Branch examines infrastructure, inter-operability, innovation and the like.

Yet this logic may well be flawed, as one form of centralization is simply replaced by another. At the heart of procurement’s present difficulties is the fact that strong oversight at the centre stifles flexibility and adaptive capacities on the front line where it is most needed.

On the opposite side of this spectrum is New Zealand, regarded as one of the most radical reformers of public sector operations. There, nearly all aspects of administrative control, including both procurement and people, are decentralized to individual departments and agencies. The chief executives running these units are held accountable on the basis of a performance contract negotiated with the Minister, and central agencies are limited to a strictly advisory and monitoring role.

Over the 1990s, studies showed that under this system the New Zealand government realized a better performance with managing large scale IT projects than most national governments in the OECD. So while nobody in New Zealand is clamoring for centralized procurement management, along comes e-government presenting a now familiar dilemma: namely, how to ensure cross-agency ties and compatibility for a more integrative online presence.

The response from the State Services Commission (the central agency responsible for administrative advice and e-government direction setting) has been to bend over backwards in reassuring agencies and the public that e-government is not a recipe for re-centralization. Instead, new collaborative mechanisms are being forged for online initiatives. Agencies, however, remain firmly in charge of managing their resources.

New Zealand and Canada present important case studies in differing methods of trying to resolve the truly complex and often contradictory governance pressure of IT procurement when taking government online. Where the former is attempting to forge coordination in a radically decentralized setting, the latter is attempting to do so in a more centralized environment.

The Canadian government faces the greater handicap. Within Treasury Board, CIOB is rightfully attempting to assert itself as a new kind of leader – seeking horizontal collaboration across departments that are, in turn, empowered with the necessary tools to focus on performance. Yet, even setting aside the Board’s historical baggage as a central guardian and chief administrator, the broader procurement architecture of centralized contracting and layers of procedural oversight casts a large shadow.

Jeffrey Roy is Director of the Centre on Governance at the University of Ottawa. He may be reached at roy@management.uottawa.ca. Please visit the Centre at www.governance.uottawa.ca.