Strategic sourcing savings

Summit, Jan/Feb 2005 by Posthuma, Hans

Ideally, awarding a contract will lead to a long-term relationship with a supplier, thereby avoiding needless repetition of the tendering process. In order to balance that convenience with the ongoing need to ensure good value, contracts may initially be set for a one- to three-year term but include options for longer-term renewal. "As long as the business is good, we can continue," says Houde. "If it's not good, we have an opportunity to tender again and get new vendors."

CRA's current approach has evolved from a combination of public and private sector practices. Houde says he and his staff reviewed a number of models to find the best match and rather than finding an off-the-shelf solution, "we had to put together different concepts, different processes, and make one big process for us. It's a joining of several models that gave us what we were looking for."

Not surprisingly, others are interested in what CRA has done. Over the last two years Houde has shared CRA's expertise with other groups, including a presentation in October 2004 to the Canadian Public Procurement Council. Even PWGSC, which itself is exploring options for better ways to buy, is interested in hearing more.

Since its initial success with strategic sourcing of office products, CRA has since inked deals with suppliers of various other products, including paper, translation services and computers. Others are in the works, including proposals for courier services and multi-function printer/photocopier units. "It's the way to go now" Houde says simply.

Hans Posthuma is an Ottawa-based freelance writer and editor.