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Thoughts on procurement — in real life

April 4, 2011

Last month, Toronto Community Housing’s procurement practices came under scrutiny by the Auditor General, City Council, the media and the public. For many fair-minded people, the failure to follow the rules was a stumbling block. They believe that, no matter what, there has to be a transparent and fair process in obtaining sub-contractors to do jobs, even small ones.

I have a different take.  Yes, when applying correct and exacting standards, any departure from what‘s in a policy has to be noted – even if just to try to improve imperfect policies.  But what is the point of any policy and any practice?  It’s to try to guarantee fairness and best possible practices and services.

If you are housing tenants who have few options about where else they can live, you want to keep the building in top working condition – for everybody’s sake.  We would all agree that is fair and good practice.

And given a choice between strict adherence to the law and a more effective efficient choice, maybe sometimes one chooses to go with effectiveness.

Reality breaks in

Here’s my observation on real-life procurement for building maintenance, based on managing a small non-profit supportive building for eight years.

Sometimes, following the Law can incur extra costs in staff time and tenant discomfort (think about a breakdown in plumbing, or no hot water, or a heating unit that has failed).  Note the steps in following the Rule – they take time and they cost:

(a)        researching local tradespeople.

(b)        contacting and arranging schedule of visits,

(c)        preparing a Scope of Work,

(d)        taking each tradesperson to the site of the problem,

(e)        briefing each tradesperson on the problem and any previous problems in the area,

(f)        waiting for each to submit a quote,

(g)        selecting and establishing the date for work to start.

If care for tenants is a prime goal, along with not wasting financial resources, the quickest and least costly option is often to turn to the sub-contractor who is familiar with the building and whose prices have never seemed out of line.  You know he’ll come right away, get the job done quickly, and not overcharge, because you have a positive history with the firm.  And making the arrangements can all be handled by a part-time Property Manager, the norm for most buildings.

The cheapest bid isn’t always – in fact, rarely is – the best choice in terms of longevity of the repairs, quality of the products used, skill sets of the work team.  Sometimes there was a low bid but we knew that that contractor had too many jobs going on and didn’t meet his deadlines.

Jobs arise when a sub-contractor is at work in the building and discovers a totally unexpected gap or block, something needing to be quickly fixed if he/she is to proceed.  Often, asking that contractor who is already on the job will be the quickest and least costly way to move ahead – no bidding process makes better sense.

A Note on Purchasing

Purchasing is a tricky business.  The lowest price is rarely the best buy unless you want to pass on costs to the person taking your job after you.  A refrigerator lasting for 10 rather than 15 years does have to be replaced. (Did the original budget expect the 15-year life?)  Factor in service calls: there are a lot of repairs called for on large appliances in social housing. At the time of installation a good supplier has an informed delivery person explain to tenants how to work the machines.  Only ¼ cup detergent in the front loading washer; shift the frozen peas so they don’t block the defrost drain; report a door rubber seal that’s torn so months don’t pass with a door not properly closed.  It makes all the difference in the number of service calls and wear and tear.  A good supplier provides this but not usually at the lowest price point.

If you’ve hired well, there are good people balancing all the elements, making sound choices, and recording the reasons for their decisions.

I think it likely that TCHC kept doing that, with a modest degree of slippage.  Other thoughts welcomed.

One Comment leave one →
  1. November 21, 2011 7:31 am

    Very informative, thanks for this. Appreciated.

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