Performance Reporting — Continued

Goal 3: Government's procurement of goods and services is fair, open and competitive

Effective management of public resources and tax dollars requires that best value be obtained through open and competitive procurement, innovative management practices and reform of existing procurement legislation. Introduction of the new BC Bid system as a single one-stop window for suppliers to access public sector contract opportunities streamlines processes for buyers and suppliers, reduces paper and saves time.

Objective 1:

• Increase the total value of goods and services obtained through competitive procurement practices.

Core Business Areas:

• Procurement and Supply Services

Strategies:

• Develop legislation and policy for procurement reform
• Pursue new opportunities for volume purchase of goods and services
• Create private sector opportunities for the commercial use of government's intellectual property

Procurement and Supply Services' management of centralized procurement activities for all of government is intended to provide partner organizations with high-quality services capable of generating significant cost savings. This measure encompasses both the efficiency of the centralized purchasing function as well as the total value of purchasing opportunities supported. Higher savings value indicates an improved ability to provide Ministry clients with increased value and competitive benefit in procuring goods and services. A standard industry methodology is used to calculate the savings on on-off goods purchases and draws on Master Standing Offers. A savings rate of 15 per cent on service acquisitions is considered the industry standard by the National Institute of Government Procurement.

• An estimated $18.72 million was saved on approximately $152.8¹ million goods purchased in 2002/03.
• An estimated $37.28 million or 15.2 per cent was saved on $245.8² million services purchased in 2002/03.
• In total, an estimated $56.0 million was saved on the $398.6¹ million of goods and services purchased through Purchasing Services (14.1 per cent savings) in 2002/03. This figure does not include cost avoidance savings, which were included in last year's figure.

This measure evaluates the efficiency of the government's central procurement services. The cost required to operate the procurement services is contrasted with the value of goods and services managed. The industry standard is that operational costs as a percentage of value of total goods and services purchased should be less than one per cent. A lower percentage indicates greater efficiency and cost-effectiveness in the delivery of procurement services. For 2002/03, the central procurement operational costs, as a percentage of total goods and services purchased, was 0.73 per cent, exceeding the industry target by 27 per cent.

Results provided by the measure assist the Ministry in monitoring the cost-effectiveness of its operations as well as ensuring transparency and accountability to the clients we serve.

• Total value of goods and services purchased through Purchasing Services was $398.6¹ million.
• Operating costs were $2.9 million and include salaries, benefits, travel, training, information technology and contractor support costs incurred by Purchasing Services to provide procurement services to government.

This performance indicator was not measured in 2002/03. In October 2002, responsibility for procurement governance was transferred to the Procurement Governance Office (PGO) in the Office of the Comptroller General. Discussions will take place with the PGO to determine the best way of assessing supplier satisfaction with procurement practices and the baseline will be established in 2003/04.

Objective 2:

• Increase opportunities for online procurement to save costs and maximize value.

Core Business Areas:

• Procurement and Supply Services

Strategies:

• Improve BC Bid system to function as a single-window electronic access point for public sector procurement
• Market BC Bid for use by the broader public sector
• Enhance the online system for master standing offers and seek other ways to increase use of electronic procurement

The new BC Bid system was implemented in February 2003, enabling two-way electronic bidding — a major step towards a fully integrated and paperless procurement, payables and payment process.

BC Bid is a one-stop window for suppliers to access public service procurement opportunities. The number of procurement opportunities posted on BC Bid by ministries increased 34.6 per cent to 4,046 bid notices in 2002/03 from 3,007 bid notices in 2001/02.

Public sector agencies include Crown corporations, municipalities, academic institutions, school boards and health authorities that are registered to use BC Bid and posted at least one notice during the year.

The number of procurement opportunities posted on BC Bid by these other public sector agencies increased 151 per cent in 2002/03 from 66 to 166. The large increase in usage is attributable to a significant rise in the number of local government, post-secondary institutions and school districts posting bids on the site.