Leadership answer to smarter procurement

By Adam Coleman

Of government projects that fail, more than 50 per cent of those failures are ensured during the procurement process and leadership need to recognise they can and must do something about the problem.

That is the message from Gartner Research managing vice president and former CIO of the state of Michigan, John Kost, who says that too many government leaders accept that the procurement process is as it must be. 

“In fact, there are lots of creative ways to alter the process to drive a greater likelihood of success.”

According to Kost, the public sector procurement model is much too rigid.

“How do we do procurements in most governments? We write ever stinking specification down …and then the vendor tells how you do it. As opposed to here is our problem, have you got any better ideas about how to solve this problem? We don’t do that because we have no idea how we evaluate that. We have to get passed the procurement mindset that many of us are stuck in,” he says.

In terms of best procurement practises, Mr Kost says that while people talk about buying best value instead of low prices, “I don’t think many have done a particularly good job of executing that.”

The challenge lies in the evaluation process, he says.

“Rather than spending hundreds and thousands of pages finding the [specifications] right down to the colour of the wires, why not identify what our business problem is and then have the vendors propose solutions to that.”

Procurement professionals should work with the political leadership to ascertain what a department’s corporate values are.

“Do we care more about outcomes, to ensure we get the good stuff done, or do we care about process, ensuring that bad stuff doesn’t happen?”

He says that public sector procurement is primarily based on one assumption, that all employees of government are either crooks or incompetent.

“If you change that assumption public sector procurement looks entirely different than it does today," he says.

"Most political leaders I talk to don’t have a clue about procurement, they assume it is the way it has to be for some mystical reason going back to the ancient Egyptians. When you ask them what do you care more about getting results or preventing bad things from happening, they’ll say ‘I really want results.’”

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