Be a procurement cynic – watch out for lies, cartels, monopolies, and conflicts of interest!

With time and age, one tends to get more cynical. Certainly about certain aspects of life today - the motives of those in power, the honesty of celebrities who deny having had plastic surgery, the fairness of TV talent shows, or the potential for humanity to ever live up to the ideals of socialism, just for starters.

Yet really, cynicism is a terrible thing. An attitude of constantly looking at life with a jaundiced and weary eye would make existence unbearable, I suspect. So we wouldn't wish it to that degree on the procurement profession or anyone else. But, as key guardians of our organisation’s money, we’d suggest it is beholden on procurement people to look in a tough and suspicious manner at what really drives suppliers and markets. And very often, the procurement profession is touchingly but worryingly naive. For instance, we don't tend to spot cartels very quickly - most of those that have been exposed come to light some years on, usually via the actions of whistle blowers. "I never suspected anything," says the buyer who has been exploited for years.

So in a short series, which we might snappily title “Celebrating Cynics,” we’re going to cover here some of the main areas where being cynical is, or should be, a key part of the procurement role. As well as the cartel issue, we’ll take a look at the natural inclination for businesses to attempt to create monopolies – and how procurement techniques have actually helped to drive that market concentration.

Conflicts of interest in our supply arrangements is another interesting area that deserves a closer look. The growth of “prime contracting “ strategies, and indeed the growth of procurement outsourcing, has led to many situations where suppliers are buying on our behalf, or directing our spend to certain other suppliers. But how are they choosing those suppliers? Do they have our best interests at heart? Or do they make decisions based on their own interests?

We featured here the case of Capita running procurement for a UK Council and letting contracts for translation services to a company owned by ... Capita. Of course, that decision was made on purely objective grounds, I’m sure. But it would be good to think that a deeply cynical procurement person would look long and hard at the processes and protections in this and many other cases – both public and private sector. Because we suspect that too often organisations accept claims of ‘Chinese walls’ or ‘objectivity’ far too easily in these situations.

And the final area where challenge is needed is simply around believing what we are told in a procurement and supply chain context, without objective verification or evidence. That covers a multitude of sins, from supplier selection processes to performance management, but again a touch more cynicism might help in many cases.

So several topics to explore there – and more to come in our “Celebrating Cynics” series!

Voices (2)

  1. Trevor Black:

    After all the considerable number of public procurement disasters and the usual “lessons learnt” speeches which in reality mean the complete opposite I don’t believe it is cynical to believe that lessons in the present culture will ever be learnt. I admit to being a cynic where Government issues good practice guidelines to which they expect the public sector to adhere while at the same time doing the complete opposite. Conflicts of Interest are (like taxes) just for the little people.

  2. Peter Kobryn:

    Looking forward to the “Celebrating Cynics” series Peter….but in a cautious way…..

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