THE BLOG

Government Purchases: Someone Needs To Look At How Sausage Is Made

01/27/2014 02:43 EST | Updated 03/29/2014 05:59 EDT
When it comes to a lot of government activity, taxpayers often want to ignore how the sausage is made: Just take as little of our money as possible, spend it wisely, and make sure the services we depend on are there when we need them.

Bureaucracies love that apathy -- it allows them to escape scrutiny of their actions and policies.

Thus taxpayers must remain vigilant, looking in on every aspect of government management, even the parts that may cause eyes to glaze over (or stomach to turn). If we don't, abuse and waste can occur - and we end up picking up the tab.

Government purchasing policies, for example, are an area ripe for mismanagement, abuse and even criminal activity, as several startling examples of such waste have recently revealed.

A Freedom of Information request published by The Province revealed that 10 different scams involving provincial government employees were investigated by the comptroller general in the second quarter of 2013.

Several of those scams involved purchasing decisions. There was an undercover investigation into two suppliers and two government employees who may have been working a kickback scheme -- billing taxpayers for non-existent services. Another case involved an autism service provider who appears to have been charging government for kids who did not exist.

A scam by Vancouver Island's Victoria Ann Rutenberg ended up in court. Rutenberg was convicted on three counts of fraud after billing the provincial government $357,000 over two years for taking care of children who didn't exist. 

Bad government purchasing decisions come in a variety of forms, and not only extreme, illegal ones. Some are caused by inadequate vetting of suppliers or no verification of invoices. Others come through sole sourcing. Often, terms of reference will be tinkered with to ensure only one supplier can meet the criteria - thus eliminating the power of competition. The common thread: they all cost taxpayers.

Last year, when the Vancouver Island Health Authority sought bids for a home medical equipment supplier, it tailored the bid specifications to mirror precisely what the current supplier, the Red Cross, offers. Private home medical equipment dealers were effectively shut out, and taxpayers lost the benefit of competition to drive prices down. 

In Surrey, the city wanted to purchase a hoist system, so their mechanics could better maintain their fleet of vehicles - a normal use of tax dollars. However, the bid specifications appear to have been tailor-made for one particular brand of lifts.

Hanging the bid on those precise specs ruled out other competitors and may have driven up the price for this equipment. At the very least, it snuffed out other options. It's similar to a city demanding a Ford one-ton truck, instead of asking for price quotes on a truck capable of hauling one ton. By cutting out Chevrolet, Toyota and other dealers, the price goes up.

Politicians usually go to great lengths to avoid purchasing issues, as they are rife with the potential for conflicts of interest and scandal. Yet, Vancouver mayor Gregor Robertson met with opinion firm Vision Critical a few weeks before the company was given an untendered, $151,000 contract, according to documents uncovered by reporter Bob Mackin. Surrey went with the same company, but at least they put out a call for expressions of interest from other firms before settling on Vision Critical.

Taxpayers need to demand vigilance from our governments, pushing elected officials - our voices in the bureaucracy - to protect our interests. That means asking tough questions about how their organization spends their money, and investigating process complaints.

No politician runs for office solely on a platform to reform purchasing, but this is an important issue that they need to address. Are taxpayers getting as much value as possible from every dollar spent? And are government purchasing practices being regularly analyzed and improved?

Even if you don't want to look at how the sausage is being made, someone needs to.