Public procurement 'poor' say New Zealand's business leaders

26 August 2015

Less than a quarter of senior business leaders in New Zealand rated public sector procurement as “good” in a recent survey.

A study by the New Zealand Council for Infrastructure Development surveyed 32 senior leaders in the professional advisory, contracting and construction, engineering and banking and finance sectors.

When asked to rate the expertise in public sector procurement in New Zealand, only 22 per cent said it was good, with 37 per cent describing it as fair or poor, and the remainder neutral.

In contrast 53 per cent of respondents rated procurement in the private sector as good. Some 9 per cent said it was poor or fair, while 3 per cent described it as excellent.

The New Zealand Transport Agency (NZTA) was the top rated agency for infrastructure procurement and was praised for “consistently delivering, good procedures, stock standard methods of evaluation”.

Organisations where average procurement was reported were the Ministry of Education, Transpower and Waterfront Auckland, as well as cities with populations between 50,000 and 100,000.

Bodies rated below average included the Ministry of Defence, the Ministry of Justice, Auckland Council and District Health Boards.

There was also some negative general feedback from the survey. “Some agencies are just bloody hopeless – no funding certainty, the future work programme is non existent or unreliable and nothing ever starts on time,” said one respondent. Some agencies were branded “confused” and “arrogant” by others.

The three most commonly cited changes needed in procurement organisations were: providing a forward works plan of future procurement opportunities, engaging more with suppliers to understanding market trends and innovations, and adopting consistent standards and tools across public sector procurement.

Establishing more panel and frameworks agreements, and reducing the length of tender time frames were also mentioned.

When asked who should be leading thinking about best practice procurement processes in New Zealand, more than half of respondents said it should be a collaborative working group including government departments and business and community leaders. The Ministry of Business, Innovation and Employment, and the Treasury, each got 13 per cent of the vote.

When asked what structure would best support excellent infrastructure procurement in New Zealand, the most popular response was a continuation of the existing model where each organisation is responsible for their own procurement, followed by designating a lead agency for sectors, and establishing a centralised procurement function in one agency.

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