Digital sector driving government procurement transformation

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Government speakers at recent Public Sector Network conferences emphasised that early industry engagement and raising the profile of procurement within government agencies are important for government procurement transformation.

Earlier this year, Mia participated in Public Sector Network conferences focused on government procurement transformation, held in Canberra and Melbourne.

government procurement transformation
Towards government procurement transformation (Image by Susann Mielke from Pixabay)

In Canberra, the speakers and panellists represented both the Federal Government and the ACT Government. In Melbourne, speakers were from Victorian government departments and agencies. Speakers from the Australasian procurement and construction council were also involved.

The focus of both conferences was twofold: raising the importance and influence of procurement with stakeholders within government agencies, and building earlier opportunities for government procurement teams to engage with industry.

The role of procurement

Many of the speakers emphasised that the effectiveness of enacted policy and operations is totally dependent on the success of strategic procurement. However, to achieve this Chief Procurement Officers (CPOs) agreed that they must work more collegiately with their stakeholders and build solid relationships that are based on procurement-enabling outcomes, rather than procurement being a hurdle that must be overcome before an outcome can be achieved.

Within a complex environment of policies, procedures, probity and risk, the speakers agreed there is a growing need to increase the profile of procurement as a vehicle that enables outcomes rather than just a set of inputs to be complied with.

Industry engagement

The CPOs who presented also discussed the importance of understanding the capabilities and competencies that exist within industry. This means allowing the private sector to inform government on what is available in terms of solutions, industry best practice and/or physical inputs.

Likewise, they discussed the need to better negotiate with industry to ensure the functionality and performance of the product or service being procured have been addressed and represent best value for money.

See below for additional speaker insights from Stuart Crome, JP (Manager Procurement, Exhibits and Records at the Australian Federal Police), who was one of the key speakers at the Canberra conference.

Mia’s view: towards government procurement transformation

Procurement is an essential government service and, to be most effective, it must be based on a strong industry and government partnership.

Government needs to be more aware of what business can offer. This can provide government with valuable insights into new technology, talent, training and physical goods. These industry insights in turn support policy and program development and of course product and service delivery.

Likewise, industry must better understand its client, government strategies, policies, and medium- to long-term visions.

Without this shared (government and industry) understanding, the role of procurement can often be reduced to ensuring cost efficiencies and procurement policies are met – but does that role really meet government objectives?

In this regard, it was great to hear speakers describe their dealings with potential suppliers as positive and not adversarial. They also discussed the need to broaden the supply base they engage with, not just rely on incumbents. Several speakers pointed out that understanding market capabilities enabled government to not only stay abreast of new technologies/talents/goods etc, but also build awareness of other delivery models and pricing benefits.

While Mia supports these messages of industry engagement (and early industry engagement) to achieve government procurement transformation, there still exists a gulf between acknowledging the existence of the benefits gained from greater engagement with the private sector, particularly when it comes to SMEs, and the reality of actual government engagement with potential suppliers.

Government really does need to make itself more accessible and receptive to approaches from business – in particular SMEs, which can deliver innovation, expertise, flexibility and pricing advantages. Probity flags, when there are no current tender opportunities, are not helpful in enabling the outcomes government needs through its procurement activities. Furthermore, government can use established marketplaces, registers and even public tender tactics to implement practical forums to engage early with industry in a meaningful manner that complies with government procurement and probity requirements.

At Mia we are passionate about greater engagement between government and business – and why? Because strong relationships between government and suppliers (actual and potential) matter. They benefit government in policy and operational decision-making, within a true best-value context, and they benefit Australia’s business sector.

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Speaker Insights – Stuart Crome, JP

Manager Procurement, Exhibits and Records at the Australian Federal Police

As one of the key speakers at the Canberra conference, Stuart had some very interesting things to say about government procurement transformation. He was kind enough to provide additional insight by responding to our three questions.

1. You spoke of the need for government to elevate the status/importance of procurement as a function in government’s overall strategy. Could you elaborate on this?

Procurement can tend to be a ‘downstream activity’ in the planning process – the focus is more about budgets. However, the nature of what is being procured and the size of investments being made require a more proactive and deliberative process.

Procurement is a skillset that needs to be nurtured and matured within the financial acumen domain – especially given the impact it can have on industry and the financial accountability of the size of expenditures we are involved in. Lastly, treating the procurement personnel and the capability as a profession to ensure currency, appropriate skills and effective engagement is essential.

2. You spoke on how government can achieve greater strategic outcomes by engaging with potential and actual suppliers in formulating tender approaches. Can you outline some of these strategic benefits?

My thought behind this was that there is a mindset that everything has to be done ‘in-house’ and assumes a department has the requisite skills and knowledge to undertake every task. The reality is there are aspects around the procurement of products and services where external support would enhance the outcome.

For example, consider unique or highly specialised procurements like defining the needs for a plane to deliver capabilities. The skillset and knowledge around what makes a plane good or not, compliance requirements and maintenance are things that would not normally be held within the organisation and should be obtained from experts.

3. In having greater government and business interaction, what would you like business to be more aware of when providing information as suppliers to government?

My initial thoughts are twofold. Firstly, know your customer. Invest the time to learn what the agency is responsible for and what its pain points may be in order to craft your engagement. It boils down to relevance and credibility. I am talking about the more complex and strategic procurements. Transactional engagements (e.g. purchasing stationary) do to not feature in this regard.

Secondly, once engaged I think there is a lot of opportunity to develop the strategic engagement process. Establish lines of communications about how the engagement is working, review and address any issues, acknowledge the positive, and work collaboratively. Challenge the norms of the traditional ‘fire and forget model’. This is a shared responsibility that benefits all parties.

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