Procurement Risk Assessment (PRA)

Procurement risk assessment isn't a standalone process you'll find neatly packaged in the Supply Manual. Instead, it's woven throughout your procurement activities—from planning through contract award. When you're identifying and evaluating potential problems that could derail your procurement, you're doing risk assessment work, whether or not you call it that.

How It Works

In Canadian federal procurement, risk considerations show up explicitly in several places. The Supply Manual's Section 4.35.5 requires bidders to describe project risks and their mitigation strategies as part of rated criteria during evaluation of technical data. This shifts some responsibility to vendors—they need to demonstrate they've thought through what could go wrong and how they'd handle it.

Here's the thing: when the Office of the Procurement Ombud (OPO) conducted their procurement practice review of PSPC in May 2023, they identified the three highest-risk procurement elements based on actual issues and complaints. First, establishing evaluation criteria and selection plans. Second, the bid solicitation process itself. Third, evaluation of bids and contract award. These aren't theoretical risks—they're where things actually go sideways in federal procurement.

The Directive on the Management of Procurement takes a risk-based approach to planning and oversight, which means you should be calibrating your effort based on complexity and potential impact. A $50,000 services contract needs different scrutiny than a $50 million IT infrastructure deal. Your formal procurement plan should reflect this reality. The OPO has also emphasized how vendor performance information helps mitigate risks during procurement strategy development and contract award decisions—past performance matters because it predicts future problems.

Key Considerations

• Mandatory criteria are your risk filter. Non-compliance with mandatory requirements results in bid disqualification. This isn't just bureaucratic rigidity—it's how you eliminate proposals that can't meet essential needs before they cause bigger problems down the line.

• Your evaluation criteria create risk exposure. Poorly designed or ambiguous criteria are a primary source of procurement challenges and complaints. The OPO's findings make this clear: if bidders can't understand what you're asking for or how you'll assess it, expect problems.

• Contract mechanisms matter for performance risk. Building objective-based mechanisms into your contracts—deliverable schedules, performance standards, penalty clauses—gives you tools to manage the risk of poor or non-performance after award.

• Documentation protects you during review. Your assessment decisions need to withstand scrutiny against the Financial Administration Act, Treasury Board Contracting Policy, and the Directive on the Management of Procurement. If you can't explain why you made certain risk judgments, you're creating procedural risk.

Related Terms

Evaluation of Technical Data, Evaluation and award, Formal Procurement Plan

Sources

• Supply Manual, Chapter 4 and Section 4.35.5

• Procurement practice review of PSPC - EPA/PPR 05-2023

• Directive on the Management of Procurement

Risk assessment isn't a checklist exercise you complete once during planning. It's an ongoing judgment call throughout your procurement, informed by policy requirements, past experience, and the specific circumstances of what you're buying.