Executive Summary
Submission to Joint Committee on Jobs, Enterprise and Innovation
Date 16th October 2014
Author Dr. Paul Davis
Procurement within the public sector is often seen as a very traditional tendering role whereas it is a set of activities that can contribute signifcantly more than the tender itself.The full range of the procurement process is not being utilized. In many cases of procurement in the public sector, engagement with suppliers either through pre-market engagement or through ongoing contract evaluation does not take place.
The Irish public sector itself has formally moved to a more centralized approach for procurement. Yet research shows that centralized state procurement can lead to a stifling of innovation and a reduction in competition and does not allow for local needs and increased participation of SME’s.
The approach of Irish public procurement is to deal with the tactical issues of price and delivery and to forego the investment in strategic activities. There is some cross over between the Jobs Strategy and the Public Procurement Strategy
In a recent review carried out for Enterprise Ireland I noted that there has been no follow up to this policy implementation nor have there been any KPI’s included in any recent procurement policies to ensure that any of the practices to date can be measured. This is surely wrong.
In the Program for Public Sector Reform published in January 2014, there is less than one paragraph out of four pages of text on public procurement that refers to SME participation. In that paragraph it states that the Office of Government Procurement will only address policy – to date this is the circular 10/14, which means nothing else need be actioned before the end of 2016 – the end of the reform plan.
The following are recommendations that I would make
All future policy aimed at suppliers should be mindful of the significant differences that exist within the SME population.
Micro-enterprises should be treated as distinct from the SME group.
Clear KPI’s for SME participation should be set for all public procurers.
Clarity needs to be provided from a government perspective as to what exactly is the intended outcome from any policies or guidelines produced and how exactly these are to be implemented.
The OGP should set out clear rules and roles outlining how collaborations might occur and what might be involved.
Procurers should be required to set targets related to their collaborative efforts at the outset of each procurement being undertaken.
Training on the issues surrounding consortium building should be provided to all interested SMEs. T
The OGP should include a description and discussion on the topic in a new updated guidance booklet, which should be made available to all public procurers and potential suppliers alike.
Procurers should be required to set targets related to market intelligence gathering at the outset of each procurement being undertaken.
The OGP should provide a formal definition of what precisely constitutes feedback.
Specific training must be provided to all public procurers to enhance their skills in procuring for innovation.
The OGP should organise in conjunction with DJEI a budgetary system, which specifically allows for ring-fenced monies to be assigned directly to procurements of innovation.
Author Profile
Dr. Davis is Program Director for the MSc in Strategic Procurement and the MSc in International Management. He has been an Adjunct Professor at UCSC, Cremona, Italy, ESB, Reutlingen Germany, BUPT, Beijing, China and ISEE, Paris, France. He has been on the Procurement for Innovation working group and was responsible for the delivery of the research that led to the publication of the 10 Step Guide to Smarter Procurement.
DCU in partnership with Bangor University and the Irish Institute of Purchasing and Materials Management has been successful in winning approval for their project “Winning in Tendering” under the Ireland Wales Interreg 4A scheme. The project has a budget of 4.2 million euro. Dr. Davis has headed the D up CU elements and has co-ordinated the Ireland partners. The project is a strategic project aimed at transforming the public tendering experience of Small Indigenous Suppliers (SIS) in the Ireland / Wales region. The project will address skills gaps of SIS’s and Public Procurers, which inhibit the regions competiveness and sustainable development. This work builds on the successful MSc in Strategic Procurement in DCUBS which has been endorsed by the public sector in Ireland, in particular the National Procurement Service of the OPW, and the National Public Procurement Policy Unit of the Department of Finance.