Do You Need A Change? Balancing the Imbalance in Public Procurement

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    Candace Riddle
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    I just read an interesting article on the Business Process Management Institute’s website.

    The 2007 article was posted by Brian P. Stern, Executive Director/ Purchasing Agent for the State of Rhode Island. In his article Mr. Stern stated,

    • A. STATE PROCUREMENT
      Although almost two billion dollars of goods and services are procured annually, the state procurement process in Rhode Island had not undergone a systemic review in more than seventeen (17) years. While the procurement statutes are based on the Model Procurement Code- adopted in more than thirty-five (35) states -uniform processes and procedures ended there. Rhode Island, along with most other states, developed the day-to-day business processes to address the local political and regulatory environment.

      The rationale for a centralized government procurement system is threefold:

      (1) to provide for fair and open competition for procurements using public funds;
      (2) to standardize procedures statewide for efficient cost effective procurement; and
      (3) to enforce the purchasing statute and ethical requirements.

      Unfortunately, over the years these tenets were not given equal weight.

      Over time, because of a variety of change drivers, the enforcement of the procurement law became the most dominant piece to the detriment of all others. As a result steps were added to the procurement process without any systemic evaluation of the process. The result of this “band-aid” approach was that any perceived breach of the spirit or intent of the procurement statutes and rules were addressed in broad brush by adding steps to the process. As a result the process became so convoluted that it affected the other tenets of the system. Fair and open competition was compromised and the ability to achieve cost-effective procurements was put at risk. Vendors who knew how to manipulate this increasingly complex system would benefit to the detriment of those who did not, regardless of the price or quality of their services. A small incumbent group of vendors often had an unfair advantage. In effect, the state’s attempts to enforce the ethics rules often had the opposite results from those intended. Over the years fewer vendors participated in the competitive bidding process which resulted in increased costs for goods and services.

    I’m curious. . . how do you believe the imbalance in a “centralized government procurement system” should be addressed? Should this be addressed by a call for “continuous improvement” of the profession? If so, what does that entail…the adoption of a formalized “change management process” or the willingness of the practitioner to have more direct contact with the constituancy that he or she serves?

    Let me expand on the concept of “direct contact”. By direct contact I mean, should the practioner not become so task oriented that they fail to see the impact of their actions on the business process as a whole?

    The increased support and mandate for greater transparency has the potential to eliminate such a “heads down” attitude, but how is transparency and public contact integrated into the business management process for the public procurement profession?

    Thoughts?

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