Letter to Commissioner Duheme regarding the issue of Procurement (October 2024)

October 16, 2024

Commissioner Mike Duheme
RCMP National Headquarters
73 Leikin Drive
Ottawa, Ontario  K1A 0R2

 

Dear Commissioner,

On behalf of the Management Advisory Board (MAB) for the Royal Canadian Mounted Police (RCMP) in my capacity as the Lead for the Finance and Administration Standing Committee (FASC), I am writing to provide you with our collective advice regarding the issues surrounding procurement processes at the RCMP. Recognizing that the RCMP must operate within the standards and regulations put in place for all Government of Canada organizations, the FASC has tried to focus its recommendations to elements the RCMP can address internally, or through consultations with partners.  

In March 2024, the MAB Chairperson met with you and members of the Senior Executive Committee (SEC), where the procurement of goods and services essential to RCMP operations was identified as a recurrent issue. In a letter from the MAB to you dated March 25, 2024, the MAB committed to exploring this topic, including how best to understand and address it. Since that time, the FASC has been steadfastly working to gain a better understanding and knowledge of procurement within the organization.

Throughout the summer of 2024, the FASC met with senior RCMP officials across the organization, and was provided with a contextual overview of existing challenges and ongoing work on the matter. This allowed us to gain an enhanced understanding of the complexities in relation to procurement, particularly within an operational organization such as the RCMP. These consultations highlighted critical areas where the RCMP could benefit from improvements in its procurement processes. The FASC recognizes the complex framework that command how procurement activities must be completed within the Government of Canada, and the delicate balance between the work of procurement professionals who are accountable to ensure procurement activities comply with the federal government procurement framework while meeting the needs identified by RCMP clients. 

The FASC also acknowledges that the RCMP Internal Audit, Evaluation, and Review (IAER) unit has plans to conduct an audit of Procurement and Contracting Services in the 2024/25 Fiscal Year as indicated in the organizational Risk-Based Audit and Evaluation Plan. This will deepen and continue the important work on this priority issue. While the RCMP is working on making procurement improvements, many initiatives are still in their early stages with long-term deliverables expected in two to three years. To address immediate concerns, the RCMP must consider short-term options that can be implemented swiftly until long-term reforms are realized.

While the FASC cannot comment on the Government of Canada requirements and standards as a whole, our review highlights significant inefficiencies related to the RCMP’s procurement processes, leading to frustrations among stakeholders due to their length and complexity. These inefficiencies cause delays that impact operational effectiveness, strain resources, and affect morale. The existing governance and approval structures are viewed as inflexible, failing to support the agility needed for timely acquisitions.

Throughout our discussions with senior officials, the FASC identified the emergence of five (5) overarching themes: 1) Procurement Process, Intake, and Life-Cycle Management; 2) Resources and Recruitment; 3) Procurement Training; 4) Exemptions; and 5) Delegated Authority Levels. We have laid down a summary of the key information we heard, as well as our recommendations for each of these themes below.

THEME 1: Procurement Process, Intake, and Life-Cycle Management

The RCMP’s procurement process is currently burdened by complex, significant paper-based processes and multi-layer approval requirements, which results in substantial delays. This complexity can cause operational inefficiencies and funding pressures. For example, competitive goods requirements above $25,000 can take up to 52 weeks or more to be awarded. The Treasury Board Secretariat (TBS) Directive on the Management of Procurement and the requirements to comply with Trade Agreements and other socio-economic initiatives complicates matters further, as they are designed for a wide range of federal departments and do not fully account for the unique needs of an operational policing environment. The onset of needs assessment and investment planning can also be delayed due to budgetary constraints. Early financial planning is critical to ensure that funds are available before the process begins.

The RCMP also has high standards for equipment specifications to ensure the safety of its members, which contributes to an already complex and lengthy procurement process. Currently, the RCMP is seen as “reinventing the wheel” by defining needs and requirements from scratch, regardless of whether another police agency has already gone through the process for that specific good or service and it has met RCMP standards.

Good life-cycle management of policing equipment and other goods by the RCMP require a robust administrative process to ensure the seamless replacement of items at the end of their life-cycle.  In recognition of significant delays due to ineffective life-cycle management, the RCMP has taken steps to better manage standards and frameworks governing the full life-cycle, such as the development of the Policing Assets Program and the Materiel Management Policy Centre.  However, there is a sense that there are still gaps, in particular when it comes to a common understanding of who is responsible for tracking the life-span of assets, as delays for the replacement of essential equipment continue to affect those on the front-line.

There is consensus that the RCMP process to obtain operational goods and services could be improved. Yet, no formal feedback on the procurement process functionality has been sought from clients. Performance measurement is one of the mechanisms to identify gaps and areas for improvement based on user experience, as data is essential to inform evidence-based changes and potential solutions. It can also be leveraged to support future initiatives and make compelling business cases.  

Recommendations:

• Modernize Processes: Implement Lean Six Sigma^{Footnote 1} methodologies to streamline and optimize procurement processes. Lean Six Sigma focuses on eliminating waste, reducing variability, and improving process efficiency. By applying these principles, the RCMP can simplify the procurement process, minimize delays, and enhance overall efficiency while ensuring compliance with the federal government procurement framework.
• Leverage Digital Tools: Given that the anticipated implementation of the S4T^{Footnote 2} system and its “Procure to Pay” module will not occur until 2026-27, explore short-term digital solutions to address immediate procurement needs. Readily available tools that can integrate with S4T could provide rapid enhancements to the procurement process. These tools should focus on automating manual processes, tracking progress, and simplifying intake.
• Alignment with RCMP Financial Planning Cycles: Procurement planning needs to better align with the financial planning cycles to ensure that the allocated funds are available for procurement acquisitions. Better financial planning leads to more efficiencies, reduces risk of delays in acquisitions and lapses at the end of fiscal year, and would help contracting partners with their respective financial planning cycle and processes. Early identification of funding needs should be done hand-in-hand with procurement planning, and in tandem with contract partners, where and when feasible.
• Needs Identification: Adopt a comprehensive approach by defining and identifying needs at both the divisional and national levels early in the process in consultation with Procurement. This could involve setting up mechanisms to capture requirements from the field and translating them into national procurement tools with standardized options within the RCMP’s Operational Needs Identification process, thereby addressing common regional and organizational needs. This would allow for more time and resources dedicated to the procurement of equipment specific to geographic terrain and/or specialized units.
• Improve Asset Life-Cycle Management: Strengthen asset life-cycle management and planning practices by clearly communicating the division of roles and responsibilities to ensure equipment is replaced in a timely manner. Develop systems to track the lifespan of assets, identify replacement needs early, and ensure that procurement decisions are made well before equipment reaches the end of its life-cycle through the full utilization of the Operational Needs Identification process within the Policing Assets Program. Implement live dashboards to monitor the status of procurement requests and identify potential delays early, allowing for timely interventions.
• Learn from Partners: Collaborate with other policing agencies and federal departments/agencies to leverage and learn from their procurement practices to avoid duplicating efforts. Explore sharing procurement policies (where feasible) and practices to improve efficiency and cost-effectiveness, such as those observed in Ontario (e.g. shared uniform requirements with different patches). Pursue and develop methodologies for sharing of information between select policing partners for mutual benefit.
• Review Readily Available Product Utilization: Continue to explore the use of readily available products for standard police equipment (e.g., flashlights, radios, etc.) to expedite procurement and reduce costs. Evaluate alternative specifications and consider proven vendors that are already vetted by other police services to enhance procurement practices and ensure timely availability of equipment.
• Improve Efficiency through Performance Measurement: Regular review and assessment of the procurement process could help address gaps and inefficiencies. Performance metrics could be a valuable tool to bring needed improvements and inform changes to the procurement practices.  The RCMP must also ensure that there is ongoing oversight and review of these tools to ensure they are updated and relevant.

THEME 2: Resources and Recruitment

The RCMP's procurement reporting structure varies across regions and divisions, which leads to inconsistencies in the reporting structures and practices. This lack of standardization contributes to inefficiencies and complicates the procurement process, with some procurement officers reporting directly to Divisional Commanding Officers, and others reporting directly to the Chief Financial Officer, resulting in the uneven application of procurement practices. Additionally, the recruitment and retention of qualified procurement officers is challenging across the Government of Canada due to high turnover rates, limited supply of qualified talent in a competitive labour market, competition for bilingual staff, and discrepancies in classification levels compared to other federal departments. Retaining procurement officers is critical for the continuity of operations.

Recommendations:

• Standardize Procurement Officer Reporting Models: Develop a national standardized procurement reporting structure to ensure uniformity in procurement practices. This model should address the current discrepancies and promote best practices across the organization.
• Enhance Recruitment and Retention: Revise recruitment and retention strategies for procurement officers to identify root causes for and address high turnover and staffing challenges. Implement retention programs to maintain trained personnel and reduce the impact of turnover on procurement operations. Develop strategies for corporate memory and business continuity to relieve the pressure on staff.
• Streamline and Resource Procurement-Dependent Processes: Increase efficiencies in procurement-dependent processes, such as security clearances and staffing, to reduce delays. Recognizing the complexity of these types of processes, one option may be the development of pre-emptive and ongoing procurement specific staffing processes open to all applicants so there is always a pool of potential qualified candidates to choose from.

THEME 3: Procurement Training

There is an opportunity to offer greater training for all stakeholders involved in the procurement process such as procurement professionals, delegated managers, policy centres, operational programs, and administrative staff. There is currently a lack of comprehensive, user-friendly, easily-accessible, and well-documented guidance/tools on procurement policies, to address existing gaps in the knowledge of procurement practices.

Recommendations:

• Develop a Procurement Playbook: Create a detailed “procurement playbook” that outlines all aspects of the procurement process, including roles, responsibilities, and procedures. This playbook should be accessible to all relevant staff and serve as a reference to standardize procurement practices and eliminate barriers. The playbook could also serve as a basis for reviewing current policies and procedures.
• Invest in Training: Implement targeted training programs for procurement staff and those involved in the procurement process. Training should cover all relevant aspects of procurement processes, including defining requirements, validating the needs through appropriate governance structures, preparation of requests, compliance, documentation, and timelines. Ensure that staff regularly update training materials to reflect changes in policies and procedures.

THEME 4: Exceptions

Applying for exceptions in urgent procurement situations can be challenging. Existing exceptions, such as those for national security and emergencies, are highly scrutinized. This scrutiny can, at times, impede the ability to respond quickly to critical situations. Making a compelling business case is essential to ensure that the procurement processes unfold without delay. However, these exemptions exceptions may not fully address the unique needs of the RCMP, in situations in which the threshold required under the national security and emergency exceptions is not met. This is a gap which may jeopardize the safety and security of Canadians.  

Recommendations:

• Review Exceptions: Conduct a comprehensive review of existing exceptions to determine their relevance and applicability to the RCMP’s needs. Evaluate whether the current exceptions effectively cover issues specific to the RCMP and work with the TBS to adjust as needed.
• Staff Familiarization: Ensure that staff are familiar with the criteria for applying exceptions and that the process for requesting and utilizing exceptions is clearly defined and well-understood. One way to do this would be to include a detailed module within the procurement playbook showing how to efficiently and accurately use existing exceptions with clear examples of situations they apply to, essential wording to use in requests, and explanations on how to move these types of requests quickly through the right channels. 

THEME 5: Delegated Authority Levels

Current delegated authority levels are viewed as restrictive, particularly in urgent or high-value procurement situations. This limitation affects the ability to make timely procurement decisions, potentially leading to delays and inefficiencies, and hindering autonomy, including access and/or improvements to member housing in specific geographic areas. The delegated authority levels have not kept pace with inflation and the rising cost of supplies.

Recommendations:

• Increase Delegated Authority: Evaluate and consider requesting increased delegated authority limits to provide greater flexibility. This change would help address urgent needs more effectively and improve overall responsiveness. Although there is work underway regarding increases to delegated authority levels, this is a key area in which change could offer much-needed flexibility for prioritization of requirements in the short-term.
• Ongoing Review of Delegation Levels: Regularly review and adjust delegated authority levels to ensure they align with current operational requirements and economic conditions. This review should consider factors, such as ability to remain compliant with the procurement policy framework while balancing considerations for inflation, cost increases, and the need for macro-purchasing in divisions, e.g. member housing.

The RCMP is cognizant of current gaps and challenges related to procurement, which is why it has become a key priority. However, the sense among stakeholders is that the procurement process falls short of delivering goods and services in reasonable timeframes. MAB encourages the Senior Designated Official of Procurement to increase and enhance its communication around current initiatives and future plans to improve the process through periodic updates. This could be done on a monthly or quarterly basis to keep everyone involved informed of progress.

We recognize that not all of the recommendations presented here are solely within the purview of the RCMP and would require changes to the federal government procurement framework. RCMP may require developing and leveraging relationships with partners across various levels of government and in policing agencies in order to work with them in new and innovative ways to achieve the desired outcomes. However, by implementing these recommendations and addressing the outlined themes, the RCMP can significantly improve its timing to offer goods and services required for policing, enhance operational effectiveness, and better support its stakeholders. The proposed changes aim to streamline processes, address resource and training gaps, and enhance flexibility to better meet the needs of the RCMP and its operational requirements.

We express immense gratitude for the officials who consulted with us and provided great transparency and knowledge, through which we were able to formulate these recommendations. We will continue to follow this issue and remain apprised of the work in response to our advice.

Sincerely,

Mr. Doug Moen
Finance and Administration Standing Committee (FASC) Lead
Management Advisory Board for the RCMP