Presentation to FMI

Making Contracting Work in the CRA May 22, 2013

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Agenda

• Elements of an Effective Procurement Framework

• Procurement Vision and Strategy

• CRA Authorities

• Procurement Oversight

• Supporting A Professional Organization

• Processes & Tools

• CRA Strategic Sourcing

• Success Stories

• Results

Elements of an Effective Procurement Framework:

• Procurement Vision and Strategy

• Delegated Authorities

• Strong Procurement Oversight

• A Professional Organization

• Processes & Tools

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Procurement Vision and Strategy

Our procurement vision is aimed at leveraging purchasing power across the Agency:

• Use contract independence to build procurement solutions catered to CRA operations

• Focus on value-added procurement

• Use a commodity-based approach that establishes long-term partnerships with vendors

• Use self-service to extent possible to provide more efficient and effective solutions

• Use PWGSC solutions where it makes business sense to do so

• Work closely with Shared Services Canada for IT procurement

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CRA Contracting Authority

Under the Canada Revenue Agency (CRA) Act, the Agency has full contracting authority (Section 61) excluding legal services;

High-level policy direction for the CRA’s procurement regime approved by the Board of Management

CRA Procurement Policies consistent with PWGSC but uniquely CRA’s

The CRA procurement delegation instruments effectively

supports: • Procurement by F&A national procurement team for all

national procurements and regional procurements subject to trade agreements

• Regional procurements below trade agreement thresholds centralized in a regional centre of expertise (in Laval, Quebec)

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Delegation Authorities Model

Acquisition Limits:

Procurement Methods:

Roles and Responsibilities

Budget Manager

Designated Procurement Specialist

Regional Centre - Laval

Contracting Officer

AD - HQ

Acquisition Card ($5K)

E-Procurement (Synergy)

Acquisition Card

E-Procurement (Synergy)

Requirements Definition

Development of Statement of Work (SOW

Create Requisition CAS Role 25

Budget Release of Requisition - Expenditure

Initiation Section 32- CAS Role 26

Receipt & Inspection of Goods

CAS Role 35

Section 34 Approval of Invoice

Contract Management

< $25K for Goods

< $78.5K for Services

Call-ups

Low Dollar Value Contracts

Contract Award in accordance

with policies and procedures

Contract Management

Advice and Guidance

Role 24/124

All values for goods and/or services

Establish Strategic Sourcing

Arrangements:

Standing Offers

Supply Arrangements

Contracts

Policy Development

Training Framework

Monitoring Framework

QA Framework

Contract award in accordance with

policies and procedures

Contract Management

Advice and Guidance

Role 24/124

Financial Delegation Procurement Delegation

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CRA Oversight & Compliance • AC level Procurement Steering Committee approves procurement

strategies for all high dollar/ high risk procurement

• Regular cyclical review of all aspects of procurement by Corporate

Audit and Evaluation Branch (CAEB)

• Separate Compliance and Program Review Section

External Oversight • Canadian International Trade Tribunal (CITT)

• Office of the Procurement Ombudsman (OPO)

• Office of the Auditor General (OAG)

Reporting

• Quarterly reporting to Board of Management

• Disclosure of contracts over $10K

• Annual reporting to PWGSC

Procurement Oversight

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Clients are to follow these steps in selecting the procurement approach:

• Select applicable catalogues from Synergy;

• Use acquisition card under $5K where allowed;

• Proceed with contracting action by Laval or Ottawa

Implemented an acquisition card monitoring program with the regions and new

on-line tool to administer the program;

• Monthly monitoring to identify and investigate transactions that appear outside the

norm

• Remedial actions taken where appropriate

Processes & Tools

Processes & Tools

CRA Self-Services Catalogues for Clients: • 1,300+ Synergy users using 18 Synergy catalogues for

supplies(e.g. office supplies, paper, computers, translation

services, IT Supply Chain and 12 External catalogues using

acquisition cards (Health Services, Language Training, etc.)

• 64,000 client transactions annually under self-service.

Professional Buyers supported by Synergy: • Standard processes for all buyers

• Templates in development to improve compliance

• One single tool for all documentation

Synergy (Ariba) now part of the SAP Suite (Summer

2012)

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Synergy Catalogues

Internal Catalogues

• Automated External Defibrillators (AEDs)

• Assessment Services – Executive/Cadre (EC) Group

• Chairs – Office and Boardroom

• Desktop Letter Openers

• Computers and accessories

• Envelopes

• Filing and Storage Cabinets

• Headsets (now SSC)

• Long Service Awards (LSA)

• Network Cabling and Related Services

• Occupational Health-Related Services

• Office Supplies

• Paper

• Primary Rate Interface (now SSC)

• Professional Services Supply Chain (PSSC)

• Telephone Sets (now SSC)

• Toner and Cartridges

• Translation Services

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External Catalogues

• Audio Recording and Duplication Services

• Battery Recycling Services

• Consumer and Commercial Credit Reports

• Finance and Administration (F&A) Intra Agency Courier Services

• Knowledge and Research Products

• Language Training

• Occupational Health-Related Services

• Printing, Publications

• Reference Checks

• Short Run Printing and Copying Services

• Taxi Chits

• Typesetting Services – Large Print

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Emphasis on commodity management

Strategic business relation with Suppliers

Reduce overall costs (products & process)

Improve service/delivery

Improve supplier relationships

Improve reporting capabilities

Provide the ability to interface with CRA E-procurement tool

Support acquisition card payment

CRA STRATEGIC SOURCING

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Spend Management Life Cycle

RFP

Evaluation

Contract

Performance Measurement & Reporting

Preliminary Research

Performance Measurement & Reporting

The monitoring, measuring and reporting of performance: contract

compliance, service levels, achievement of operational and strategic objectives.

Evaluation Application of the

evaluation strategy and framework, and its

application to vendor submissions.

Request For Proposal (RFP) Development of the procurement & evaluation strategy; preparation of

the solicitation documents.

Preliminary Research The research and

findings undertaken in advance of preparing a

strategic sourcing procurement vehicle

Contract & Amendments Finalizing the contract for the

delivery of strategically sourced goods and services.

Strategic

Objectives: The key goals of the

strategic sourcing

opportunity

Contract Management &

Administration Contract Management & Administration The day-to-day administration and overall

management of the strategic sourcing contract.

Approvals Management review and approvals: BMC, DMC, Functional Authorities.

Approvals

Complex Process

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Tax Program Contracts

• T1 Forms and Display Services

• Program Envelopes

• Toll Free Services - now under Shared Services Canada (SSC)

Business Services

• Process mapping

• Human Resource Support Services (Health, training, Employee Assistance Program)

• IT Supply Chain

IT Products/Solution

• Desktops/Laptops

• Synergy Tool

• CRA Application Software (non-SSC)

Agency-wide Goods/Services

• Office supplies, papers, toners

• Translation services and Language Training

Major CRA Contracts

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Issued 2 Arrangements per type: Orders sent to top Supplier at time of ordering (prices updated monthly)

Orders over $1M competed between the 2 suppliers (3 days)

In 2009 Desktops and Laptops combined together

Benefits obtained: Consistency of products, warranty and standardized maintenance level

Stable technical environment

Stronger relationship with Suppliers to resolve issues

Just in time delivery directly to end users

Life cycle warranty of three years to four years on all commodities reduces or eliminates service calls under the National Maintenance Agreement

Reduced support costs due to fewer varieties of equipment

Available on-line reducing call-ups by 1,000+ annually

SUCCESS STORIES IT Hardware (Desktops, laptops, servers)

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Key elements: Long term Strategic Alliance to improve the printing process and overall

costs for the T1 Program

Combine hundreds of transactions into one single multi-year arrangement

Improve service delivery

Obtain savings from products and processes

Benefits obtained: 3 year contract with 4 additional one year options

230 annual transactions eliminated (all previously done in 1 month)

Average savings of 10% from previous years on product costs

Clients submit forms directly to supplier under pre-established price structure

Supplier works all year to improve forms, processes to reduced costs on other products (envelopes, printing, inserting, mailing)

SUCCESS STORIES – T1 Program

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Dashboard

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Procurement Evolution: FY 2001/02 to FY 2012/13

# of Transactions (,000)

Payment w/o Reference Contracts/Call-Ups/Amendments

Acquisition Card E-Procurement

0

20

40

60

80

100

120

140

160

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Change in the Contracting Work: Contract value (# Transactions and $ Spend)

< $5K

$5K to $25K

> $25K

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FY 2012/2013 - Transactions FY 2012/2013 - Value ($,000)

Procurement Activity Distribution FY 2012/2013

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Procurement Activity Distribution FY 2012/2013

Value ($M) Transactions

Questions?