Public & private sector procurement – what do you think of the differences?

We published the results of the survey on the differences between public and private sector procurement a while back. The survey was carried out in conjunction with the organisers of the eWorld conference. We intended to publish the results of the final question, which was a free text “Please add any comments you have about the differences between procurement in the commercial and public sectors”.

But we forgot! So here is a selection of the comments – you can see the whole selection here...

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:

“The EU regulations and the effect they have on the whole process reduces the flexibility that public sector buyers have.”

“I see the main difference being the recognised value and strategic benefits that procurement can bring to the organisation; in private, it is seen as integral to the organisation, 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.”

“Because of the Public Contracts Regulations most of the public sector is too risk averse to procure effectively”

“One significant difference is that the public sector seems frightened to talk to suppliers, relying too much on the use of formal processes & arms length negotiations.”

“Public sector procurement is too rules based (for very understandable reasons) to allow for much innovative procurement and to take advantage of shifts in the market.”

Others believe one of the main differences lies within the skills of each sector.

“The profession is under skilled and complacent. We need to recruit young professionals with university degrees, give them massive drinks from firehoses in training, and manage their careers with balanced assignments in numerous ‘Specialties’.”

“The general perception is if you work in the public sector you are lazy with poor skills and wouldn't last five minutes in the private sector where the real work gets done.”

“For all the grandstanding announcements of this government's focus on driving up standards the standard of basic skills has deteriorated over the few years, an issue that is not truly addressed”

“The standard of central government procurement delivery skills is lower than any time I can remember over the past 25 years”

“Whilst the private sector inevitably has more commercial focus, the public sector often underestimates its own skills, particularly given the very different legislative environment that we work within.“

Some believe this is down to lack of communication and leadership skills.

“Procurement lacks leaderships skills and teeth, is too easily told what to do and does not have sufficient support at Exec Director level. In the commercial sector you have the full range of capability from well run, well resourced, appropriately governed procurement units running efficiently and effectively whilst maintaining a suitably risk controlled environment.”

“My department (Public sector) is so huge that communication from senior levels often seems diluted or ineffective and doesn't drive performance or change among the staff delivering procurement.”

Others believe it’s down to the Public sector having to take much more into account when going through the procurement process.

“Public sector procurers have to put up with more - adverse headlines,constant government interference, competing priorities (aggregation for savings v disaggregation for SME involvement), more legal uncertainty, the constant pressure of challenges etc.”

“Public sector procurement has to juggle so many more objectives, outcomes and stakeholders than the private sector than just looking to provide an improved service or margin. It is also still seen as a functional service and therefore under-resourced and not seen as a key player in delivering corporate objectives”

“Propriety, transparency and compliance place greater demands on public sector people and processes.”

Moving away from the more popular opinions, a few of our survey participants made some interesting opinions about what differences they think lie between the private and public sectors in procurement, including:

“The profession must be larger: Acquisition. Not just purchasing or procurement. CIPS must move up the food chain and produce acquisition professionals who can operate equally well in public or private sector. They really are not that different.”

“The differences are always down to the quality of procurement leadership and the level of top level support the function attracts”

“My concern is that we are experiencing too much central control at the moment and this could leave a a pool of talent on the fringes being neglected and and forgotten.”

“Biggest difference I have seen to date has been the value the organisations place on procurement - public sector pretty much still sees procurement as a means to place orders and have goods delivered - they do not understand the potential value add at this time and look to procurement to just make baseline savings”

What do you think are the differences, if any, between procurement in the private and public sectors? We’d love to hear your opinions!

Voices (13)

  1. xavier:

    I can not make a mistake, when I say that both public and private sector procurement are needed because are complementally but public are compliance than private.

  2. Samantha Coombs:

    Public sector individuals rely on the OJEU rules and can’t think for themselves whereas private sector and think for themselves based on commercial knowledge.

    Most public sector individuals I’ve worked alongside lack competence, are afraid to speak up, afraid to challenge the status quo, and without the OJEU bible by their side they panic through fear of job loss.

    1. Secret Squirrel:

      Whereas most private sector individuals I’ve worked alongside are fly by night, get things done in a hurry with no rigour, are more interested in personal gain and when asked to do something thoroughly make it up as they go along.

      Or perhaps we could dispense with the false generalisations.

      1. bitter and twisted:

        Yeah but they have their bad points as well.

    2. Guitar Man:

      Samantha, You’ve probably met the public sector officials who came in fast racked from the private sector on an inflated wage for their ability and thus were over promoted. So many of those imports I’ve met over the years were somewhat overrated I’m afraid to say.

  3. KaleMick:

    There are definite differences between the two sectors. Public procurement doesn’t have the drive that private does, and that allows multiple agencies to convolute things. Luckily we have groups like the Public Procurement Authority (http://ppa-or.gov/) so as to improve efficiency in the procurement process, and reduce solicitation and procurement costs. Primarily working with fire department purchases, they provide a mechanism for increased standardization of industry tools, equipment, and technology, which allows other public agencies to benefit from Master Price Agreements secured by them. The PPA works closely with NPPGov, the FireRescue GPO and the Law Enforcement GPO to secure publicly awarded contracts that can be offered to members of these organizations.

  4. Jacob jaili:

    I do agree with comments that in public procurement there is lack of flexibility due to too much observance on prescribed procedures. Even creativity among the professionals is affected. If you do not do or do something spelt in guidelines in a different way in bid to cut down costs and in good faith, you will be accused of going contrary to the provisions. this does not mean public procurers are lazy it is matter of the environment in which they are operating.

  5. Kalumuna Pierre-claver:

    in public sector every thing is ok.

  6. Mecktilda:

    in private there is a real procurement practices but in Negotiation and decision making sometimes its done centralized this hinders the ability of procurement personnel especial inexperienced one to grow in terms of carrier growing

  7. Jason Kay:

    I have worked in both sectors, although would class myself as a “private sector” procurement professional.
    From what I have seen in more than one area of the public sector, is the big difference seems to be the lack of drive and ability to deliver. It often seems that in the public sector there hasn’t been a need to perform as funding just keeps coming, whereas within the private sector, businesses and hence procurement have to perform and constantly improve or they don’t survive. I’m sure I’ll get some flack for these comments, but the public sector really need to improve now funding is being cut and they/we are more under the spotlight than ever. Procurement in the public sector do however, need to start taking some responsibility and making things happen rather than looking to someone else to do it. Lets stop bleating about how hard it is (It isnt!) and lets get on with it.

  8. Dan:

    Procurement legislation. Media Headlines. Supplier Challenges. Freedom of Information requests. Political interference..

    Procurers in the private sector should count their blessings.

  9. John Diffenthal:

    I’ll just take one comment completely out of context:

    “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.”

    I’m not sure from the comment whether they mean internal or external challenge. In an increasingly litigious environment with grumpy suppliers looking longingly at the profits to be made from winning the public sector tender that they are bidding for currently, it would be a huge surprise if local government buyers did not look at the risk of challenge as both real and growing.

    1. Dan:

      I think I’ve read somewhere that procurement challenges have doubled year on year over the past few years. Indeed, in the recent articles that Peter wrote on the committee discussions, the CEO of ESPO indicated that they get around one challenge a week.

      Given the harsh measures that can result (amendment of the contract, redoing the procurement, damages and a fine), buyers would be crazy not to minimise the risk of challenges.

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