Why is public procurement challenging and hard to get right?
Private sector procurement teams are charged with delivering quality and value, mitigating risk, and ensuring continuity of supply.
Their public sector counterparts must do all of that plus:
- Deliver government policy through procurement activity, for example, foster wider use of SMEs, shape procurement strategies to allow access by the Third Sector, and ensure other sustainability goals are woven into procurements. Balancing this with cost and quality considerations requires careful thought and deep understanding of the numerous factors
- Work in areas where the failure of supply may directly impact the well-being of many citizens, for example, Health and Social Care, public services and construction projects
- Working with a complex group of stakeholders, which could include citizens, politicians, interest groups as well as technical experts, aligning these views and requirements requires outstanding engagement skills.
and
- Follow an intricate regulatory landscape, including the Procurement Act, complex case law, government procurement policy notes, and a changing National Procurement Policy Statement. Failure to fully comply with all aspects of this changing and complex set of rules may lead to challenges – potentially leading to increased cost to the public purse and reputational damage, meaning it is vital to keep abreast of the changing regulatory landscape and translate the regulation into practical sourcing or contract management, the technical expertise required…
…while
facing great difficulty getting and retaining the right commercial resource. Public buyers must be commercially minded and deliver excellent value for money while confidently navigating the complex regulatory, legal framework and stakeholder landscapes.
Public procurement teams set out to be non-compliant, but sometimes, it is hard to keep aligned with all they are expected to deliver. When something does go wrong, it can result in a ‘Procurement Challenge.’
What is a ‘Procurement Challenge’?
A challenge is when an interested party, usually an unsuccessful bidder, claims that the contract the Public Authority has awarded or is seeking to award has not been awarded in line with the relevant regulation.
What might prompt a ‘Procurement Challenge’?
Any area where the procurement may not comply with the many rules could give rise to a challenge. A key area of focus is bid evaluation and scoring; areas that get authorities into hot water include, for example:
- Not following the process that the buyer set out in the tender documents.
- Making material errors – for example, marking down a supplier for not providing something that is, in fact, in their bid.
- Not being able to clearly articulate why a score was awarded.
- Material changes to scores without a clear audit trail explaining why.
Sensible ways to reduce ‘Procurement Challenge’ risk
The government maintains a Sourcing Playbook with an excellent Guide to evaluation. Key takeaways include:
- Get your timetable, resources, process, and approach to good record-keeping established right at the start when preparing the tender.
- Select the right amount of qualified and non-conflicted evaluators and ringfence their diaries.
- Appoint trained and experienced moderators who understand how to properly guide a panel to consensus on the right score with the right depth and detail of feedback.
- Apply thought to the evaluation model (Criteria, Weighting, Thresholds) and test it rigorously.
- Evaluate the bids by applying the model without deviation.
- Clarify correctly and fairly for all bids, keeping a clear audit trail.
Biggest Challenge – becoming too risk-averse
The impact of a ‘Procurement Challenge,’ whether successful or not, maybe great, so it is understandable that some public body buyers become risk averse. This may lead to an overfocus on avoiding challenges, which can stifle innovation and even lead to poor sourcing decisions.
The best public buyers are confident that they understand the regulations and potential risks, creating procedures that are compliant without being excessively cautious. The biggest challenge for authorities is finding and keeping these buyers.
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