Procurement collaboration – when it’s OK to say ‘no’

While this is a public sector story, it applies just as well to large private sector organisations.

A friend of mine sits as a non-exec for a public organisation that sits at let's call it  'local' level.

They are under pressure to join in with national collaborative procurement initiatives in their sector but as she says, "we're not sure they are actually good value for money, and we're also being encouraged to support smaller and local businesses".  She gave an example of one product where a national deal with a single supplier had led to reduced competition and (over a few years) greatly increased pricing.

Could I advise her?

Well, I am a supporter of collaboration and there should almost certainly still be more across the public sector.  But if the agreements on offer to my friend's organisation are genuinely not good value for money, then something is wrong. And by 'not good value'  I don't mean you can find another supplier who can undercut the national deal by twopence; I mean significantly poor value.

But my main advice was that she should ask whoever is driving the national initiative to show her the 'category strategy' or equivalent for the goods or services in question.  That should contain amongst other things a clear explanation of how issues such as long-term competitiveness and competition will be maintained; the effect on smaller and local businesses (who can be accommodated within even a national category strategy), how the strategy will meet local needs, which may vary somewhat, and so on.

And if all they can tell her is "we've done a national deal / framework and we think you should use it" then she and her organisation are completely within their rights to politely say "no".

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