Project shines a spotlight on procurement

Craig Milley , Director of Procurement

Craig Milley is the first Director of Procurement for the Civil Service. His Project Future project on “Improving Government Procurement” has engaged him in establishing the Government’s first Central Procurement Office and working with the Procurement Law Committee on new legislation.

Q1: Why does this project matter?

CM: Procurement is important to the Cayman Islands as a whole; it is even mentioned in the Constitution.  In the 16/17 budget (18 months), the government, including SAGC’s will procure $346 million of supplies and consumables. That’s approximately 30% of Government’s total recurrent expenditure.  If we want to get value for money we need to have trained persons to do the procurement and a robust legal framework to support the function.

Q2: How is procurement done at the moment?

CM: Although there are some procurement regulations in the Public Management and Finance Law, there is no over-arching framework for Government procurement.  Back in 2011, the Office of the Auditor General issued two reports that were highly critical of the management of procurement.

Q3: So this project aims to address these areas of weakness?

CM: Yes. We are working to address issues with existing public procurement government governance and practice. We want to bring a more professional approach to procurement, train public servants. We also want to achieve better value for money and bring down the costs of running the government.

Q4: This project was already in progress when the Project Future programme was launched in November 2015.  How did it start?

CM: In January 2013, a Procurement Sub-Committee report recommended the creation of a central procurement office, improvements in procurement processes, enhanced oversight of processes and leveraging of shared contracts”.

Q5: So your appointment as Director came as a result of that work?

CM: Yes, I was appointed in January 2015.  The EY report had been published just a few months earlier, so as I moved forward, I was aware of the recommendations included in the report around improving procurement. These were largely accepted by Cabinet for the Project Future programme.

Q6: It’s been a year since your project transitioned onto the Project Future programme. What progress has been made?

CM: The passage of the new Procurement Law in October 2016 was a key milestone for the project.  We have also trained over 160 public servants on the new law since June 2016 and this is ongoing.  We have rolled out new templates for digitalized bid documents, new software that allows us to do electronic bid receipts, and online evaluations.

Q7: Will local suppliers benefit from this new procurement regime?

CM: Local companies will be given preference in the procurement process, as long as value for money is maintained. We need to take into account the socio/economic factors to encourage local suppliers. This may involve simplifying tender documents, not placing unreasonable demands in the specification or considering splitting projects into smaller ones sot that the local market can respond.

Q8: One of the key deliverables for your project was the introduction of an Electronic Reverse Auction Pilot, to identify and pursue savings.  What exactly is this?

CM: A reverse auction is a type of auction in which the roles of the buyer and seller are reversed. In an ordinary auction buyers compete to obtain goods or services by offering increasingly higher prices.  In a reverse auction, the seller competes to obtain business from the buyer and prices will typically decrease, as seller underbid each other.

Q9: You’ve actually introduced the reverse auction concept already. How did it go?

CM: The first reverse auctions have resulted in costs savings of CI$ 155,475 for the procurement of ICT equipment. In December, we will conduct a reverse auction for the first Government-wide contract for office supplies and paper products. We are expecting some significant savings, working with the local supplier community (this auction is limited to on-island suppliers).

Q10: What else is on your agenda as your project continues?

CM:  Getting the new Procurement Law was important. This marks the beginning of the next important phase, which is the implementation of the Law. This involves the development of new Regulations, and the establishment of new bodies such as the Public Procurement Committee, the Public Sector Investment Committee, and entity procurement committees within individual Ministries. We are also working on developing a new public reporting facility for contract opportunities and awards, to build a repository for all of the tools and templates for public servants. We will be developing a procurement Code of Conduct, to regulate the behavior or both suppliers and public servants involved in the procurement process, to deal with issues such as conflicts of interest.

Q11: It seems that training for public servants will need to continue as an ongoing priority.

CM: Training for public servants will continue to be one of our main areas of focus, on the new law, new methods, new technology.  It really is a paradigm shift.

Q12: How have these changes been received so far?

CM: I’ve been blown away by the level of readiness to change.  I haven’t experienced a lot of resistance. Everyone wants to do better.  Now it is more about having the capacity to respond to demand.

Q12: How have you used the Project Future project management methodology in your project?

CM: It has meant that there is a  focus on planning, documentation, critical thought and a disciplined approach to change and improvement.  Now that we are in the Execution phase.  I am constantly going back to my Work Breakdown Structure, and I use this as a touchstone for where we have come from and what still needs to be done.

Q13: What is the most important things you will take away from this experience?

We are in a transition period- not where we ultimately want to be, but we are making significant progress. There is a lot of work remaining that needs to be done in a careful thoughtful way. And in a way that is sustainable.

Craig Milley , Director of Procurement