Is Public and Private Sector Procurement So Different?
What are the key differences and how do these impact suppliers and procurement professionals?
Private and Public Sector Procurement have many principles in common, but some aspects are quite different and these can have a significant impact on both suppliers and procurement professionals.
Impact on Suppliers:
- It is harder to create and build relationships
- Most suppliers prefer to talk directly to service managers and build a relationship with both the organisation and the individuals within it. This is more challenging within the Public Sector, both to “get in the door” in the first place and then to maintain a relationship, particularly during tender processes
- Perceived, and sometimes actual, bureaucratic processes
- The Public Sector is required to follow certain open and transparent processes which can lead to lengthy and resource-heavy procurements for suppliers
- Many suppliers may not have experience of public sector procurement processes and they can therefore feel onerous
- Suppliers regularly engaging in procurements may need to complete the same information multiple times (Standard or Selection Questionnaires)
- Lack of contact during procurements and limited negotiation
- Suppliers can’t have informal conversations or negotiation meetings during most public procurements.
Impact on Procurement Professionals:
- Public Sector have much tighter controls on their approach to market, particularly above threshold (previously OJEU). There are specific rules on publication of tenders and contract awards which procurement professionals must adhere to
- Procurement processes within an organisation are governed by Contract Standing Orders (CSO’s) or Financial Regulations (FinRegs) for procurements below the threshold. These processes will have their own rules to follow, which will vary in different organisations
- Frameworks are generally only utilised in Public Sector. Where appropriate, they can be useful to increase efficiency and allow access to pre-qualified suppliers
- This can mean procurement professionals creating frameworks
- It regularly means working with framework providers and the need to understand the specific requirements of such frameworks
- Stakeholders are often politicians or trustees and may influence processes¸ sometimes with limited relevant experience
- There is often close scrutiny of procurement processes by members/trustees, the public, local press and via Freedom of Information requests
As a procurement professional, priorities are changing with additional factors such as ESG forming a significant part of the day job regardless of whether your role is in the Public or Private sector. At JDP we see these as unifying factors, bringing our worlds together to create change.