Public Sector Procurement: A Comparative Look at the UK and the US (Part 2)

Spend Matters welcomes commentary from Peter Smith, the editor of Spend Matters UK/Europe. See yesterday's post here.

Yesterday I outlined the way procurement has featured highly on the agenda for the UK public sector over the last eight years or so. Today we'll cover some of the critical success factors and identify what we've learnt in terms of trying to drive better procurement performances.

Not surprisingly, capability has been a key issue. Many large government departments, and indeed hospitals or local authorities (state or county level) have increased the seniority of the procurement head of function, and there have been some high profile recruits from the private sector. Many -- although not all -- of these have been successful, and there is no doubt that bringing in professionals with experience in dynamic private firms has helped. On the other hand, we have many long-serving public servants in procurement, and some are excellent (perhaps our most highly regarded professional has been in public service for 35 years now!).

Many public sector organisations offer a salary supplement of up to £4,000 ($6,500 dollars a year) to procurement staff once they are qualified. But I am not sure that the UK has succeeded in improving the performance of the 'average' operational level procurement officer very much over the last few years. Many more have CIPS (Chartered Institute of Purchasing and Supply) qualifications, but in too many cases, people obtain CIPS and that is the end of their development programme. A greater focus on continuous professional development and training, and performance management (we VERY rarely fire a public sector worker) might have helped here.

Jason mentioned technology in his post and the UK has seen a major growth in the use of electronic sourcing in particular, often allied to spend analytics. BravoSolution, for instance, has hundreds of clients amongst local councils, hospitals and similar, and there are other sourcing platforms widely used (PRocServe, EGS, In-Tend), some of which are quite sector specific. Emptoris has several of the biggest central departments as clients; and auctions, while not as well used as they should be, are no longer rare, with Intenda and Trading Partners used extensively, as well as the sourcing providers mentioned above.

While EU regulations do constrain what can be done to some extent, almost all major procurements use complex evaluation processes that focus on whole life cost and look genuinely at best value rather than lower price. The sealed bid, lowest price tender has died out. In fact, I might argue that some evaluation has become overly complex for simpler contracts, and maybe we need a little more focus on low prices given the state of our economy! But, again assisted by technology, procurement has learnt how to assess quality, service, even innovation and softer supplier offerings, alongside the hard pounds or dollars. And we don't have the US "qualification based selection" system, which to me seems madness in professional procurement terms.

So those are a few critical factors where the UK has seen some success. On Monday, we'll discuss one major area where things haven't gone so well.

- Peter Smith

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