Can anyone defend the state of public sector procurement?

7 September 2010
I was hesitant to post another public sector topic, but following the overwhelming response to my last post on the OJEU, I felt it warranted further analysis. The responses have left me with no doubt that the public sector is not only in need of radical reform but also that this would be welcomed by many. So what are the issues that came out of this discussion? First, we know (thanks to Roy Ayliffe for pointing this out) the OJEU is to the benefit of the supplier, not the buyer – who must choose a balance between compliance and litigation. Second, their objective is widely ineffective, as the post from RKH states: “I work in the public sector and in the six years I’ve been managing procurement, not one tender have we received from another EU member state; we’ve had more interest from suppliers in India than from within the EU.” Third, there is unanimous acceptance that the OJEU is disdained, bureaucratic and costly to administer. Fourth, there is a perception we (in the UK) are stuck with the OJEU, while other EU members cherry-pick the bits they like. And lastly, there is widespread misinterpretation of the directives, while those that do understand them apply their creativity to navigating stakeholders through the rules. Call me a naysayer, but I don’t believe this paints a healthy picture of public sector procurement, which to quote bitter and twisted’s comment: “The point of it is to give the taxpayer value.” Looking at it like this, I cannot see how the current state is defendable. The critical element missing is any form of strategic framework to manage public sector procurement. This is a key area for government to address. How many heads of procurement actively participate in the strategic planning process of their organisation (a question that equally applies to the private sector)? There needs to be a co-ordinated viewpoint across public sector buying organisations of the strategic purpose that they are there to fulfil. Procurement leaders must agree the competitive priorities and put in place proactive plans to execute on them. By putting in place centrally managed and common processes, governance, systems and compliance mechanisms it should be possible to create a more sensible organisational structure. This will support more effective collaboration in public sector procurement, to deliver the desired value for taxpayers while beginning reform of the OJEU. Such strategic frameworks already exist in large complex global private sector organisations so there is no need to reinvent the wheel. They provide the necessary operating environment to support the comment posted by Steve A, who says: “If every public sector organisation was professional and transparent and acted in the best interests of the public sector as a whole then OJEU would become redundant.” * A news analysis of the discussion will appear in the 16 September issue of SM
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