Should government abandon the OJEU?

23 August 2010
Catching up with a well-respected colleague who is trying to sell his services to the public sector, he bemoaned their insistence upon public sector and OJEU experience. Why would you insist on this experience - bring in more of the same - to bring about change? We both agreed this is the last thing you need if you want to bring about a real transformation. In another conversation with the owner of a procurement recruitment company, it was stated they choose not to go after public sector business because of excessive bureaucracy and lack of genuinely strategic expectations of candidates. This is not a favourable image for the public sector - and as we know, perception is often reality. We all know change only happens by doing something different, so below I take aim at procurement regulations, which I argue are to the overall detriment of the effectiveness of public purchasing. The intentions behind the regulations are noble. The OGC describes that their purpose is “to open up the public procurement market and to ensure the free movement of goods and services within the EU”. The problem is they seek to do so in a prescriptive manner, while also ensuring openness and transparency in purchasing. The result is a disconnect between the procurement process and any overall strategy. In contrast, the very best procurement organisations in the private sector achieve the same objectives via applying appropriate use of local and global sourcing strategies. They do this while following a consistent and open process that supports the overall strategy of the business. They recognise an unfair process only serves to damage their reputation with suppliers and ultimately will reflect in the terms they negotiate. The OJEU process is bureaucratic, widely misinterpreted and serves to diminish the role of procurement to the transactional. Purchasing’s role becomes focused upon steering the organisation through a complex system of regulation to protect the organisation from litigation by bitter bidders. This disturbing trend is on the increase, which implies a further disconnect. If a supplier is willing to litigate over process, there is no concern for a longer-term relationship. The prescriptive nature of regulations serves to the detriment of any strategic focus on individual procurements. And the fear of litigation also serves to stifle innovation, doing nothing to attract and retain the best talent in the public sector - which is the exact opposite of what the government would like to see happen. I would argue OJEU itself is at least in part, responsible for the ineffectiveness of public sector procurement and represents a formidable barrier to public sector buyers in deploying modern purchasing practices. So should the government call time on OJEU? Since it is public money being spent, there will be a need for some regulation. But this must not bring about an undue focus on procedures to the detriment of strategy and adopting best practices. It should also not promote a culture suppliers can later exploit in the courts. There is much to be learnt from the private sector, and with the right guidelines there is no reason why the public sector cannot behave more like it.
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