LA REVUE GAUCHE - Left Comment

Reinventing Government, How the Entrepreneurial Spirit is Transforming the Public Sector, by David Osborne and Ted Gaebler published in 1993. It became the bible for the reduction in government services in order to reduce deficits by using contracting out, outsourcing and public private partnerships. It was the bible of the ‘new ‘ way for governments to do ‘business’. It was a liberal version of the harsher conservative view that all government services could and should be privatized.

It became the rallying cry of governments under siege from business and the right wing. In the United States it was embraced enthusiastically by the Democrats and Vice President Gore. In Canada it became the Chretien Liberals alternative to the Klein Revolution in Alberta. And it is the reason that Canadian Firearms Program ended up being a billion-dollar boondoggle.

Facing a massive deficit and debt crisis that was world wide, governments began to end their Keynesian approaches to social spending and embrace the new neo-conservative agenda. Reduce spending, outsource government contracts and increase tax cuts to business. The Liberals were no different, and Reinventing Government became an internal bible within the various departments. It was read by Cabinet Ministers, deputy ministers, and most importantly its ideas of contracting out and outsourcing was embraced in every department as a way of supposedly saving money.

The Liberals began the promotion of private-public partnerships (P3’s) and contracting out not based on any real economic analysis but based on popular business ideology. One of the areas the government saw, as perfect for outsourcing was its IT needs. The computer and information technology boom meant that the government could easily contract out these services rather than developing them in-house. Various departments began wholesale contracting out of IT services, including hardware purchasing and installation, computer programming and data base construction, as well as data inputting.

Unfortunately in their rush to privatize and outsource, they failed to develop a business plan that would allow for project oversight, and worse they failed to tender specific contracts for services. The government became a slush fund for private sector IT companies which were not the small computer companies of struggling entrepreneurs of the Wired generation, but large-scale corporate monopolies.

Such was the case with the Canadian Firearms Program, as is clearly shown by all the audit reports. In the case of the creation of the CFC, not only was the IT contracted out but also so was all the staff who did data intake, customer service and data input. The entire Centre is one large venture in private delivery of government services. Cost overruns occurred because of having “ multiple headquarters deployments (Edmonton and Ottawa) and processing sites (Montreal and Miramichi).�? These were staffed not by public sector workers, but by contracted out workers.

Management was the only area that was not contracted out, but in this case the management also did not have the knowledge or experience to oversee the IT component of creating a brand new data base for registering Canada’s gun owners.

Ex-DND employee being sued over billing scandal

Updated Thu. Aug. 12 2004 7:03 AM ET

CTV.ca News Staff

Paul Champagne, an Ottawa man who claims his wealth comes from the stock market, is being sued by the federal government and Hewlett-Packard.

They allege the former Department of National Defence employee stole over $100 million of taxpayers' money and they want to recover some of it.

But the fact remains that Champagne's signature appears on cheques he personally received from military computer sub-contractors. CTV saw one such cheque that was for $95,000.

"He was telling people the contracts were all top secret military work so no one really knew what was going on except Paul Champagne," said investigative journalist Andrew McIntosh of the National Post.

In court documents, the government and Hewlett-Packard allege that over a 10-year period, Champagne stole over $100 million using a phony invoice scheme.

Ex-DND employee's signing authority questioned
By Scott Foster, Ottawa Business Journal Staff
Mon, Aug 30, 2004 12:00 AM EST

Gordon O'Connor, defence critic for the Conservative Party, has said the Champagne case brings into question the system of checks and balances within DND.

But Howard Grant, founding partner and president of Ottawa-based Partnering and Procurement Inc., said the Champagne case is an isolated event and should not colour the public's opinion of public servants.

"The majority of public servants work hard and do their best to provide a good service to the public. We have tarred all public servants with the same brush and, in essence, told them we don't trust them."

Public servants must deal with a lot of rules designed to protect them from appearing to favour particular private sector vendors, said Mr. Grant.

However, some of those rules actually hinder public servants from making sensible business decisions, he added.

For example, if the government needs a small piece of business done quickly, public servants still have to tender to at least three companies, which is a "prolonged and expensive process for both the government and the vendors", Mr. Grant said.

"Vendors are unwilling to spend, for example, $3,000 to have a hope of winning a $20,000 contract. Approval processes leave projects hopelessly delayed before they even get started," said Mr. Grant.

Another example is when the government has selected a private sector vendor to do the first part of a project and then is unable to contract with that same vendor to do the next stage without again going out to at least three companies, he said.

"Assuming the private sector company has done a good job on the first phase, switching companies mid-project just doesn't make sense."

Currently, the system causes procurement officers to use "work-arounds" to achieve the outcome that was "the sensible decision" in the first place, said Mr. Grant.

"We see procurement officers having to split a large contract into several small ones because the approval processes to select one vendor are just so cumbersome.

"So sometimes when procurement officers are seen to be breaking the rules, they are actually doing so to get their projects underway and are improving the service to the public by saving time and money."

Mr. Grant believes the system needs an overhaul but said the government needs to move away from task forces that discuss the issues and move toward making "tangible changes that will support those public servants who want to be both accountable and do a good job for their departments and the public".