By Taryn Quarmby*
Major changes are occurring in local governments across Australia. Recent investigations into the transparency of procurement and purchasing within local government have led to overhauls to help improve communication with local suppliers.
Sourcing local can be a faster and more affordable procurement strategy for local government. With a greater understanding of the many benefits of sourcing from within the local area, local governments are focusing on new, effective communication tools that enable them to engage with local suppliers.
These efforts involve combining the work of economic development and procurement departments to provide the best possible outcomes for both suppliers and local government.
By adopting technology that intuitively enables both economic development and procurement departments to share information, local governments are finding it easier to communicate with local suppliers in a transparent manner.
By providing a way for procurement teams to tap into the work that economic development is doing within the region, local government general managers can potentially save countless hours in duplicated work as well as ensuring that the process is open and honest.
However, current concerns facing local government procurement and purchasing departments have resulted in a rethink of the way these systems are being managed.
The issues facing these departments are many and varied and will require a long term, multifaceted approach both internally, through the development of new processes, as well as from external support.
Continuing concerns of corruption combined with the need to effectively advertise to appropriate suppliers, identify those who are interested, filter through expressions of interest in a timely manner as well as maintaining a transparent approach have resulted in a minefield of issues.
Making these potential areas of concern even more difficult to navigate is the fact that online systems have traditionally been difficult to use for both local government and suppliers and due to their own financial concerns have led to spamming and security concerns. Systems such as Industry Capability Network’s (ICN) Regional Gateway portal have been designed with the current complex concerns of local government in mind.
Many regional local governments that I speak with find it increasingly difficult to identify the right local suppliers.
Whilst obviously trying to provide locally-based suppliers with opportunities, numerous procurement managers have stressed that it can be incredibly time-consuming to scour the region in search of the right capabilities for an opportunity. Thus in an effort to best utilise the minimal resources available the same suppliers are often used for successive opportunities. This can reduce competitiveness of price and lead to complacency.
A potential solution to this common concern is to use a system that suppliers can register with for free and receive updates from council through an email alert system.
When local suppliers are able to enter their company details and register their interest in upcoming opportunities they are actively engaged in council activities. This not only provides a powerful communication channel, it also delivers transparency of local government procurement processes.
By using a third party opportunity alert system, councils are now able to connect with suppliers in a way that was not previously possible. Through a simple, free, online advertisement, suppliers can search for council projects through common search tools such as ‘Google’, receive daily email alerts suited to their capabilities and location, and register their interested in opportunities.
These processes work to remedy three of the primary concerns of local gvernments – how to identify local suppliers, how to communicate with them and finally how to know who is interested in upcoming opportunities.
One of the most time intensive parts of the procurement process can be filtering through the many suppliers who have registered their interest in any opportunity.
By asking the right questions at the registration stage, the time that this process takes can be significantly reduced. Finding a system that enables your purchasing and procurement departments to input the right questions for the jobwill significantly reduce the time that the filtering process will take.
Something that is perhaps obvious, but often forgotten is that suppliers also need to be able to answer these questions. By using unnecessary jargon in overcomplicated questions, suppliers could be confused leading to unsuitable responses or worse no response at all.
Some online systems, such as ICN’s Regional Gateway, allow local governments to generate their own reports based on the responses provided by suppliers who are interested in an upcoming opportunity. Such reports can be sorted by these prequalification questions, helping to ease the work required when receiving expressions of interest.
Another area that I am constantly asked about is how the increasing necessity for procurement transparency can be achieved without taking up any more time or costing council any more money. With complex procurement regulations as well as intricate internal guidelines at many local governments, procurement departments have been experiencing increased pressure to carefully adhere to a number of rules that may seem to conflict.
According to the recent Operation Jarek report released by the Independent Commission Against Corruption (ICAC) in NSW, local governments should “analyse their procurement processes to identify points of corruption risk and take steps to improve the design of their procurement processes.” Such a process is complex and involves the cooperation of disparate departments within a local government.
Management needs to find a way to provide a balance between the business approaches of suppliers with the transparency of processes at council.
However this can be a difficult balancing act. By using an online system where all procurement details must be registered and comprehensive reports can be easily generated, council management can keep on top of procurement actions while allowing the department to work without interruption.
An ongoing concern of local governments is that while the relevant departments are actively attempting to use new online systems to improve procurement processes, many of the systems and tools on the market are difficult to use and quite expensive for both council and local suppliers.
You really shouldn’t need to have a computer science degree to share information about upcoming opportunities with your local suppliers! Choosing a system with a simple ‘form-style’ layout for entering project details is integral to ensuring that all departments within council are able to fully use the software.
The financial side of selecting an online procurement tool is also incredibly important. Many have hidden costs or lock you into long, ongoing contracts – with very little benefit. It is also important to ask what the costs are for suppliers, whether they must pay to register, receive email alerts, submit their interest for projects.
A system that is free and provides email alerts for relevant opportunities is ideal for ensuring that suppliers are receiving information applicable to their business and not wasting their time or money.
An online procurement system is only as good as the suppliers receiving the information. By selecting a system that is too complex or expensive for suppliers to use, you risk not reaching the people that you need to be speaking to.
Suppliers also need to be able to use the system. Not only are many suppliers new to using online systems, they often do not have the time for the complexities involved in several online systems. Finding a system that is quick and easy for suppliers to use is essential.
In addition to the complexity concerns of these systems, another potential issue is that many are owned by companies with their own financial concerns. This is often unintentionally led to unwanted spam and unsolicited emails or phone calls through details being sold.
This leads me to the incredibly important issue of security when using online procurement tools. When providing council details to a third party, it is vital that the security of these details can be assured. Further to this, suppliers also need to be comfortable providing their details to this third party.
By working with an organisation such as Industry Capability Network (ICN) that is fully funded by federal, state and territory governments across Australia, local governments and suppliers can be assured that their details are secure.
ICN is a business network that introduces Australian and New Zealand companies to projects across the two countries. Effectively a matchmaker, ICN provides a new business source for suppliers and a sophisticated search service for project managers. Our comprehensive online system, ICN Regional Gateway, helps identify and build business partnerships. This powerful tool has around $247 billion worth of projects and more than 60,000 suppliers listed.
*Taryn Quarmby is managing the roll out of ICN Regional Gate way across NSW. This system is available nat ionally. To find out more, please call 02 9927 3100 or email email@example.com. You can view ICN Regional Gate way at regional.icn.org.au.
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