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Canadian Nuclear Safety Commission

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Audit of Contracting and Procurement

Management Response to Audit Recommendations

Audit Recommendations
1. Monitoring and Reporting CMS should ensure that effective quality control mechanisms are implemented to ensure that contract files are processed in accord with policies and procedures and that actions and decisions are adequately documented. This should include specifying information to be included in contract files, and regular quality control reviews of files using a risk-based approach. Management reporting mechanisms envisioned in the proposed Contract Review Committee terms of reference should be designed
Unit Responsible	Management Response		Timeline
Contract Management Section (CMS), Security Contracting and Procurement Division (SCPD)	In June 2008 the CMS launched several quality control and process improvement initiatives. Most of these initiatives have only just recently been fully implemented and will provide the required Quality Control mechanism as identified in this audit finding.
	1) Implementation of a revised contract signing authority delegation instrument. Central to this new delegation instrument is the introduction of increased senior level oversight, review and approval based on the increase complexity and dollar value of the contract.		The revised contract signing authority delegation instrument was implemented in February 2009
	2) All contracting and purchasing processes are now fully documented in the CMS process manual. This manual had been provided to all CMS staff as a reference guide and contains detailed descriptions of the steps to be taken when processing contracts and purchase orders. Each process is accompanied by flow charts and checklist.		The documentation of the Contract Management Section process manual was completed in March 2009
	3) In July 2008 an additional senior contracting officer was obtained through an Interchange agreement with another department. One of the tasks assigned to this senior officer is to assist the Chief of contracting in monitoring and improving the quality control of contract files based on the recommendations of previous internal and external audits of the CMS.		The Quality Assurance monitoring framework will be revised by December 31, 2010 and maintained on an ongoing basis thereafter.
	The Contract Review Committee (CRC) Terms of Reference (ToR) are currently under review. A revised benchmarking exercise is being undertaken to ensure that the CNSC Contract Review Committee can model itself bases on best practices of comparable organizations.		The CRC revised ToR are expected to be finalized by October 31, 2009, with a reactivation of the “revised Contract Review Committee” via the Management Committee presentation by December 31, 2009.

2. Performance Measurement A formal, documented performance measurement framework should be developed to enable assessments of the efficiency and effectiveness of the contracting function, provide reliable information on contracting activities, and support management decision-making processes. The framework should include identifiable business objectives and outcomes; sufficient, adequate performance indicators; methods for collecting performance data; and mechanisms for monitoring and reporting performance information.
Unit Responsible	Management Response	Timeline
CMS, SCPD, Information Management Technology Directorate (IMTD)	Due to other priorities the Procurement and Contract Management System (PCMS) will have to be revisited in for fiscal year 2010/11.
	The CNSC will update its financial systems (Freebalance) in the spring of 2010, and the CNSC intends to maximize procurement functionality (under Freebalance v6.2) to improve its business practices and reporting capabilities where applicable.	Spring 2010
	One of the main goals of the Procurement and Contract Management System is to collect data on the activities and to facilitate the analysis of the performance management of the section. Information regarding turn around times for contractual transaction, business volume and client satisfaction will be accumulated and analyzed to provide management with performance data related to the CNSC contracting function.
	The CMS is also working on a revised set of service standards based on the section’s current reporting capability that would allow for tracking of certain initial performance measurement data.	The revised CMS Service Standards should be implemented by the end of 2009.

3. Contract Review Committee (CRC) and Post-Contract Evaluation The CNSC should implement the proposed CRC to fulfill the TB policy recommendation of a formal review mechanism and to ensure effective oversight of contracting activities. CNSC should implement a formal post-contract evaluation process in line with the recommendation of the TB Contracting Policy to ensure good value in contracts. This could be addressed in the mandate for the CRC.
Unit Responsible	Management Response	Timeline
SCPD, the Finance and Administration Directorate (FAD)	As stated in the response of Finding 1, the ToR of the CRC are currently under review with a goal of re-activating a review process that would be responsive to the needs of the CNSC.	The CRC revised ToR are expected to be finalized by October 31, 2009, with a reactivation of the “revised Contract Review Committee” via the Management Committee presentation by December 31, 2009.
SCPD, the Finance and Administration Directorate (FAD)	The CMS will conduct a review of other similar organization’s post contract review processes. The results of this review will be used to establish a proposed Post contract review system that could be established to suit the needs of the CNSC.	The review and development of a post contract evaluation process is planned for implementation in the final quarter of FY 09/10.

4. Risk Management CNSC should implement a formal, documented risk management framework for contracting activities. Management should ensure that the proposed Risk-Based Approach includes sufficient procedures to identify, assess, mitigate, monitor and report risks.
Unit Responsible	Management Response	Timeline
SPCD	The CMS has developed a Risk Assessment Framework for the issuance of CNSC contracts. This framework is currently in draft format and is currently under review within the FAD. The framework provides guidance on the interpretation of contract risks and guidelines on peer review contract files and increased senior level oversight based on increase complexity and risk of the contracting activity. This new framework will also outline criteria for the review of contracting actions by the upcoming revised CRC.	The Risk Assessment Framework is expected to be finalized by the end of the 2009 calendar year.

5. Management Fundamentals Training The Human Resources Directorate should ensure that a module on contracting that adequately addresses procurement planning and requirements definition is included in the Management Fundamentals training program
Unit Responsible	Management Response	Timeline
SCPD, Strategies, Programs and Learning Division (SPLD), Human Resources Directorate (HRD)	The CMS and the SPLD are currently working on the development of a contracting module for the management fundamentals training program. This module will provide managers with guidance on contracting issues such as procurement planning, requirements definition as well as post-award contract management.	The development of the contracting module of the Management Fundamentals training program is expected to be completed in December 2009. The delivery of the training is subject to the formalization of the HRD training schedule but has been initially forecasted for early 2010.