Building infrastructure does not happen overnight, and the process starts long before foundations are laid. One of the most crucial preliminary steps is the procurement of resources needed to build a proposed bridge or road or facility—and effective cost-conscious procurement can make all the difference in the budget and timeline of a project.
In Saskatchewan, these vital procurement strategies are the responsibility of Treasury Board Crown corporation SaskBuilds. Created by the Saskatchewan government in 2012, SaskBuilds is on a mission to manage and advise the construction of Saskatchewan’s large-scale infrastructure projects.
Through its dedication to its core values, including integrity, transparency and innovation, SaskBuilds is working to ensure that Saskatchewan projects are completed on time and under budget to best serve the province and its population.
“We have committed to being transparent in our actions and our integrity is demonstrated in our accountability to that commitment,” said SaskBuilds President and CEO Rupen Pandya. “Our work is highly innovative in nature. We are committed to improving traditional procurement by applying the lessons we learn through alternative procurement, and by leading a comprehensive long-term capital planning process.”
Entering the field of P3
“Saskatchewan has experienced remarkable growth over the last several years, and with growth comes an increasing demand for new highways, schools, healthcare facilities and more to support an improved quality of life for Saskatchewan people,” said Minister Responsible for SaskBuilds, Hon. Gordon Wyant. Part of SaskBuilds’ mandate to examine the best procurement options has included a thorough look into alternative procurement models, including public-private partnerships (P3).
“For large and complex projects – generally in the $100 million or more range – P3s have proven to be the right approach for building infrastructure projects on-time and on-budget,” said Wyant. “The long-term nature of the contract ensures there is a strong incentive for the private sector partner team to build operating efficiencies and innovation into the project’s design, construction, and long-term maintenance.”
But as Wyant explains, SaskBuilds approaches the P3 model from an analytical point of view—to engage in this alternative model, it must offer value and make financial sense for Saskatchewan.
“Saskatchewan people trust the government to make the best possible investment decisions with their taxes. That is why SaskBuilds explores and compares procurement options to make recommendations based on which model of procurement, traditional or alternative, will drive the greatest value for taxpayers,” he added. “P3s are not the right approach for every project—there needs to be sufficient complexity in the project to drive the value. For this reason, pursuing a P3 is not made on the basis of ideology—it’s based on the numbers. There needs to be qualitative and quantitative value for taxpayers.”
Projects on the agenda
That growth that Saskatchewan has experienced is still going strong. SaskBuilds is currently overseeing several major infrastructure projects including 18 elementary schools, a bypass to improve safety in the Regina region, a long-term care centre, and the new Saskatchewan Hospital North Battleford facility.
All of these projects are being developed with the goal of improving everyday life for Saskatchewan citizens. For instance, through careful planning SaskBuilds predicts that the full Regina bypass project will be completed under budget by 2019. “This is a full six years sooner than could have been achieved through a conventional approach,” said Pandya. “Coming in $380 million under the budget we estimated for a traditional build, the bypass is delivering savings of almost 17 per cent and will be an important asset in the national transportation network.”
Leveling the playing field for Saskatchewan business
“Ensuring local Saskatchewan businesses have a level playing field to compete upon is a priority for our government,” said Wyant. “We created Priority Saskatchewan to look at procurement across government ministries and the Crown sector to see where there are opportunities to do things better – more strategically and more consistently.”
Priority Saskatchewan is a branch of SaskBuilds dedicated solely to looking at alternative procurement methods and ensuring that all procurement across ministries and the Crown sector is kept fair and transparent. As a central strategic infrastructure agency, Wyant explains, SaskBuilds was a natural fit to take on the responsibilities of Priority Saskatchewan—and when the agency found that there were clear opportunities to improve, it took action with the launch of the Procurement Transformation Action Plan in March of 2015.
“The Procurement Transformation Action Plan resulted from the Priority Saskatchewan team reaching out to more than 140 businesses, associations, municipalities, colleges and universities, and other government partners to understand what was working and what needed to be fixed,” said Wyant. SaskBuilds used this data to build an implementation strategy into the procurement system for both vendors and buyers.
“The plan looks at procurement from all angles,” he added. “Everything was on the table from simplifying documentation and language, to awarding contracts on best value versus lowest cost, and ensuring we use all available room in the trade agreements to benefit Saskatchewan businesses.”
The priorities for SaskBuilds are always clear: deliver on the projects at hand. This remains true with the current projects: Pandya notes that a key milestone for both the SaskBuilds team and the Government of Saskatchewan is delivering its current five P3 projects on-time and within-budget. With that in mind, SaskBuilds also has further overarching goals it is working to achieve.
“We will continue to make progress implementing the Procurement Transformation Action Plan’s initiatives,” says Pandya. “Concurrently, we will continue to engage with industry to identify opportunities for further improvement. We see procurement improvement as an ongoing process.”
As an ongoing process, SaskBuilds sees continuous improvement as a part of its strategy well into the future, as a means to keep improving the process of strengthening Saskatchewan’s public infrastructure.
“We will continue leading long-term integrated capital planning to ensure best practices are being consistently applied across government,” says Pandya. “Building in the discipline of rigorous upfront planning is a win-win. It not only ensures ministries take the time needed to develop the business cases, but also ensures decision-makers have the best possible advice upon which to base infrastructure investment decisions.”