The Differences Between Public and Private Sector Procurement

- November 14, 2013 4:11 PM
Categories: Public Sector | Tags:

This post, written by Jonathan Messinger, originally appeared on Public Spend Forum

A while back, we took a look at the survey of public and private sector procurement pros that our friends over at Spend Matters UK put together. Well, they’ve just released the final installment, some interesting responses to their open comment call at the end of the survey. As they did in their story today, I thought I’d highlight some interesting ones. As we noted before, the survey asked public and private sector practitioners their opinions of their own path and the other. Public sector didn’t fare too well, not ranking low in the eyes of the private sector, but in its own estimation as well.

So that’s the context for the responses here. As Spend Matters UK’s Claire Herbert notes, “While a few believed that the two sectors really aren’t that different at all, others disagreed; we found a few opinions that trended throughout the answers. The first of which was about how the Public sector is ‘too routine’ and not flexible enough due to regulations and having to meet certain targets.”

Complaints over risk aversion formed a common thread:

“I see the main difference being the recognized value and strategic benefits that procurement can bring to the organization; in private, it is seen as integral to the organization, however in public its merely routine /operational / transactional…almost a means to an end.”

“Private sector are more flexible and open to innovations; they are profit and people driven. Public sector is highly regulated and sometime can be seen as inflexible.”

“Procurement in the public sector (local government) is mechanically driven to meet procedures/regulations and often interfered with politically. Risk of challenge is not seen as a serious concern.”

One comment, though, stuck out to me from the rest of the risk-aversion crowd:

There are good and bad practices in both sectors—it isn’t sector specific. Currently the biggest difference is that the public sector (Central Gov, Local Gov & HE) is unable to budget effectively as they don’t know where the next cut is coming from and most medium term planning is effectively only 6 months ahead, particularly in Local Gov. Because of the Public Contracts Regulations most of the public sector is too risk averse to procure effectively.

I’m not sure if an American expat snuck into the survey, but much of this comment could easily apply to public sector pros in the States.

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