After the COVID-19 hit, organizations have looked upon strengthening public procurement solutions to channel the recovery spending. But the world is looking forward to utilize the public procurement procedures to ensure sustainability, innovation, and inclusivity. But how?
Knowing the effective public procurement procedures can deliver ambitious recuperation strategies, the government is putting in place the order to discover the ways of how procurement can become flexible in adapting to the crisis and deliver sustainability. Now that public procurement procedures have become crucial than ever, it can be considered as an opportunity to rebrand organizations as a strategic function.
In this context, you will learn about the two main ways in which government can position procurement as an innovative driver and unlock the strategic potential of public procurement.
Address Risk Aversion’s Culture
Critical times call for instant, yet productive solutions. And during these times, public procurers must be provided an environment by the government where they can constructively and positively engage with the dangers as they are inevitably integrated with the procurement system. And when agencies are asked to procure sustainable and innovative solutions, and think more about the long-term goals, those dangers are perceived to be larger.
Here is a list of things that can be done to manage the risk and reduce the uncertainty:
- A vital ingredient for building strategic procurement is creating a robust policy and legal structure with the help of political support. The regulatory positions, in a majority of jurisdictions exist, but they are not properly utilized due to lack of political will, time, or resources. If these legal frameworks are used in a proper way, procurement strategies can be structured that can drive sustainability and innovation.
- Procurement organizations need to develop competency centers for procurement officers. These centers can effectively work with the public procurers. While working with the public procurement officers, these centers will ensure innovation and make sure that risk is properly managed and looked after. They will also manage the indicators that determine sustainability performance and tender evaluation procedures.
- The procurement officers need to have a clear and transparent conversation with their suppliers. They need to have a proper understanding of the market. And, in order to have that, they should have clear dialogues with their vendors openly with due regard to the principles of integrity and transparency. If procurers can maintain an interaction with the market policies and demands on a regular basis, it can help them build a good relationship with market parties and also build trust. There are plenty of opportunities to make relationships transparent from both ends.
- Procurement agencies must be well-equipped with the skills and infrastructure required to monitor procurement performances. There are a handful of other tasks that a public procurer needs to perform even after the contract has been awarded to him by the suppliers. This specifically happens when a procurer signs a contract to but innovation. In this case, a public procurer has to audit every performance that is related to the contract and has to correct whenever a procurement solution does not perform the way as agreed. When data is collected effectively, performance is enhanced automatically. In this case, agencies need to make proper investment in buying e-procurement systems and digital infrastructure.
Ensure that Innovation is Directed at Sustainability
It is essential that objectives of sustainability guide innovation’s direction that can be effectively pursued by public procurement strategies. Public procurers need to understand this fact that they should not just but innovation for the sake of gaining access to new and innovative solutions. Rather procurers must buy innovation so that they can achieve the objectives of strategic sustainability. This will allow them to measure the performances.
Here is a list of things that can be done so that sustainability guides the direction of innovation:
- The policy and legal structures must build a connection between sustainability and innovation. This is a well-advanced effort, which is effectively followed by EU Green Deal and Ireland’s Green Public Procurement Action Plan. The green deal is guiding several countries making a reference to the requirement for procurement and innovation. On the other hand, Ireland’s Green Procurement plan encourages procurement organizations to use innovative procurement to make the market solutions greener.
- Scaling up the procurement processes that utilize innovation principles is considered as another way out. Traditionally these processes were used more in communication and information technology and also in some parts were utilized in the healthcare facilities. Nowadays, these processes are being increasingly used to achieve environmental and climate objectives.
- Another essential that can be done is including quantifiable and clear criteria on the performance of procurement sustainability. These are important practices. Without these, the procurement may function, but the carbon performance and the energy cannot result in zero. The organizations need to shift from the technical criteria to the performance-based criteria. This shift can result in an increased focus on the development of material-efficient services.
- Use existing procurement intelligence tools that allows the market to go sustainable and innovate it. One example is the use of carbon management tool that permits public procurers to incentivize vendors and asks them to improve the carbon dioxide emission and manage them in their supply chain and production processes. If you want to adopt to a more circular economy, this tools can be of great importance. Also, these tools can be readily used in a public tender.
- The last thing you can do is pay attention to the role played by medium and small-sized enterprises. Today this is especially vital as several small and medium-sized enterprises have been hit hard by the global pandemic situation. SMEs and start-ups do come up with a great deal of innovative ideas, which is essential for job creation along with maintaining a sustainable economy.
These are the two main ways the government can use procurement intelligence tools to position procurement practices and drive innovation and sustainability. These practices will allow public procurement to shine.