This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide.
The ability to manage resources for the greater good remains the ultimate litmus test of advanced economies. Governments are largely measured by what they build or fail to build in the public interest; however, public institutions have failed to adequately resource and train the procurement staff that are responsible for translating tax revenues into social spending. This training gap represents a growing crisis that should be immediately rectified.
Serving the Public Interest
Public institutions spend billions of dollars annually to maintain our standard of living. Citizens in advanced economies tend to take their public infrastructure and services for granted and consider them to be basic entitlements; however, building and maintaining that infrastructure and delivering those services is no easy task. While select groups of predominantly large private-sector suppliers enjoy the profits of servicing our public infrastructure and systems, the public officials responsible for maintaining the public procurement process tend to toil away in obscurity until something goes wrong.
While government operating departments receive annual budget allocations to fund their procurement projects, procurement departments, which are often dismissed as operational overhead, tend to get short-changed in those annual allocations. Procurement professionals are expected to keep purchasing systems running on shoestring budgets and outdated technologies so that government operating departments can keep awarding contracts to the private companies that help maintain the infrastructure and systems that give us access to the clean water, electricity, healthcare, education, transportation, law enforcement, and national defence that we typically take for granted. However, someone needs to keep these procurement systems running properly so that the social supply chains that maintain advanced living standards can continue to function. If our procurement systems fail, the underpinnings of advanced economies will quickly erode.
Penny Wise, Pound Reckless
Global trade treaties have exposed public institutions at all levels of government to an unprecedented level of complexity based on international procurement rules and standards. However, the agencies, municipalities, universities, colleges, school boards, and health sector entities responsible for providing most of the front-line services to the public have been left to fend for themselves when it comes to allocating resources and training to keep their procurement systems running. Sadly, senior-level governments have been quick to set up rules that allow suppliers to sue public institutions over spending disputes, but slow to fund the systems and training necessary to avoid the bad practices that lead to lawsuits in the first place.
A Rapid Action Plan
At the end of the day, though, each public institution remains accountable for its own spending. Senior decision-makers within our public institutions need to allocate greater portions of their departmental spending towards updating their central procurement systems and enhancing training programs for their procurement staff. These programs should include training on the proper drafting of contract specifications and bid evaluation criteria, on using tendering formats that help avoid legal risks, on properly documenting group evaluations and bidder debriefings, and on properly conducting contract negotiations and managing awarded contracts. Finally, public institutions should also train staff on how to properly handle bid disputes under open tendering rules before they escalate into formal bid protest proceedings.
It should be a self-evident proposition that the procurement professionals responsible for properly spending vast amounts of public funds should have access to the necessary resources and training to ensure value-for-money and to protect the public interest. Given the rising tide of complexity washing across our public procurement systems, we cannot afford to maintain a business-as-usual approach. We can either meet this challenge head on with proper resources and training for our procurement departments, or we can watch the rapid erosion of the social infrastructure that we will no longer be able to take for granted.
