CPO News – October 2, 2015

Posted by Matthew York on October 2nd, 2015
Stored in Articles, Chief Procurement Officers, General, People, Strategic Sourcing

Bombardier Names Bucholz as Senior Vice President and Chief Procurement Officer

In early September, Bombardier, a Montreal-based manufacturer of aircraft and trains, announced that it has hired Nico Buchholz as Senior Vice President and Chief Procurement Officer (CPO). Bucholz will lead the company’s strategic sourcing and supply chain efforts and help Bombardier consolidate its supply chain for its air and ground units. In doing so, he will help Bombardier overcome some of the challenges it has encountered recently, particularly in the development and production of its CS jetliner. Prior to joining Bombardier, Bucholz was the Executive Vice President of Fleet Management for Lufthansa, where as chief buyer, he helped to influence the development of the CS jetliner, the first of which were bought operated by Lufthansa.

Bucholz brings 25 years of experience in the aerospace industry to his new role at Bombardier, including 14 years at Lufthansa, two years at Rolls-Royce as their Senior VP of Commercial, and ten years of sales and marketing experience at Airbus. Bucholz has studied at the Technical University of Berlin, Cranfied University in London, and Columbia University in New York. We congratulate Nico on his newest role and wish him all the best.

Pemex CPO Resigns Amid Photo Scandal

In mid September, the Wall Street Journal reported that Arturo Henríquez Autrey, the CPO of Petróleos Mexicanos (aka, Pemex), Mexico’s national petrochemical company, had resigned amidst an apparent conflict of interest scandal. Gustavo Escobar Carré, the assistant procurement director, has taken his place. In late August, Reforma, a Mexico City-based newspaper, published a photograph from 2013 in which he was seen socializing with the owner of Oceanografía, a Pemex contractor that at the time was being audited by Pemex. Later in 2014, Oceanografia was barred from doing business with Pemex and led to U.S.-based financial institution, Citigroup, claiming losses of roughly $400 million. Henriquez claims that his resignation is for personal reasons and not linked to the scandal.

Houston CPO Leaves Position, Reasons Remain Unclear

On September 1, the Houston Press reported that Lourdes Coss, former CPO for the City of Houston, resigned her post in late August under conflicting and unknown circumstances. Citing city officials, the Houston Press reported that Coss resigned, but Coss and emails subsequently provided by her state that she was told to resign by Kelly Dowe, the Director of Finance for the City of Houston. According to Coss, Dowe claimed that Coss “did not get along with” certain Finance Department directors and executives, despite repeated attempts by Coss to reach out to them and win their buy-in. Coss had just finished implementing sweeping change in procurement operations within the City of Houston’s Strategic Procurement Division, which resulted in increased transparency, fairness, ethics, and accountability in the sourcing and procurement processes. The City of Houston had also passed a procurement code in July, the first of its kind for the city. Despite these improvements, Coss resigned from her position in late August, and the City of Houston will begin searching for her replacement before year’s end. It should be noted that there is no question of impropriety and that Coss’s departure appears to be personality driven.

World Bank Prioritizes Speed, Agility, Engagement in Procurement Reform

In late July, the Board of Directors at the World Bank approved the most significant set of reforms for the financial institution in more than 50 years. The changes, which will be implemented beginning in 2016, will include prioritization of speed, agility, and sustainability, and flexibility in its contracting and procurement practices. For the first time, procurement professionals at the World Bank will be able to consider values other than low cost, such as value and sustainability, in sourcing and awarding decisions. Under specific and controlled circumstances, clients will be able to use the procurement processes and frameworks of other partners or agencies. Also, high risk/high value contracts will be reviewed more frequently. And the Bank will work with clients in “fragile countries, small states, or others in the greatest need” for procurement assistance.

U.S. Court of Appeals Rules Conflict Minerals Reporting Requirement Unconstitutional

In mid August, the Washington Post reported that the D.C. Circuit Court of the U.S. Court of Appeals had, once again, ruled that the reporting requirement of Section 1502 of the 2010 Wall Street Reform and Consumer Protection Act (i.e., the Conflict Minerals Provision of the Dodd-Frank Act) is unconstitutional. Forcing the more than 6,000 publicly-traded companies in the U.S. to publicly state whether or not their products and components are “DRC Conflict Free” is compelled speech and thus infringes upon an organization’s First Amendment rights. The Court had ruled the reporting provision unconstitutional in April 2014, but that decision was then challenged by the U.S. Securities and Exchange Commission (SEC) in December of 2014. The SEC argued that the Court had taken a narrow interpretation of what it considers compelled speech, and that there was recent precedent for the government interpreting it more widely, as in the case of American Meat Institute v. U.S. Department of Agriculture. However, in the Court’s most recent decision, it ruled that the two cases are fundamentally different and legal precedence does not warrant its original decision to be overturned. The reporting requirement remains “compelled speech” and thus unconstitutional.

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