Disconnected policies in public sector spend: A universal problem? (Part 1 of 2) by Jon Hansen

I read with great interest the recent Procurement Insights EU Edition post “A Living Wage” (July 30th, 2013) by Dr. Gordon Murray, and the corresponding follow-up commentary “Additional thoughts regarding the “Living Wage” question” (August 2nd, 2013) by Ian Burdon.

In the summer of 2006, I chaired the Summit Roundtable that reviewed the critical elements of the Canadian Federal Government’s Way Forward initiative.

Based on the input that was received through a series of meetings in which representatives from both the public and private sectors were in attendance, I drafted a procurement blueprint.

The following excerpt from that blueprint indicated that a general consensus was reached in terms of the purchasing guidelines that define public sector practice;

“it is also generally agreed that government is not a corporation and therefore has different priorities and imperatives to meet when procuring goods and services.  This acknowledgment takes into account socioeconomic implications including the importance of developing key Canadian business sectors or industries.  Examples of key sectors or industries include the SME/minority-owned business community, or Canadian-based manufacturing sectors such as shipbuilding where job creation and community financial stability are taken into consideration.”

The undeniable importance of the tie between public sector spend and social policy was more recently reflected in a post by Andy Akrouche titled “Focus on building relationships that create sustainable value in Canada key to CF-18 Hornet replacement contract.”

In the post, Akrouche – who is the President of The Centre for Relational Outsourcing & Strategic Management – talks about Canada’s Industrial and Regional Benefits or IRB policy, and its importance in terms of Being “a crucial instrument for SME innovation which, as everyone would agree, is the engine of our economy.”

All of this leads to an interesting (and important) question . . . if everyone agrees that leveraging public sector spend as a means of driving socioeconomic benefit is important, then why has it proven to be a near impossible task?

I believe that the following comment by Burdon provides some much needed insight into why successfully linking the two has at times, been problematic;

“But there is a problem. In the UK there has been a positive movement to increase skill levels and professionalism in public procurement. The result, though, is a substantial cohort of trained buyers who are very skilled at using a set of standardised processes. Those processes are designed to ensure that, when they are correctly followed, the outputs are justifiable to auditors and judges. From this defensive perspective, the result does not matter so long as the process output cannot successfully be challenged.”

This latter point in particular resonates we me for many reasons.  In part 2 of this post I will share those reasons with you.

In the meantime what are your thoughts regarding the apparent disconnect between public sector procurement practice and socioeconomic benefit?

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