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May 12, 2022

May 12, 2022

Procurement Bites: How can public authorities better collaborate on procurement?

In the second article in our series on procurement, we look at the topic of collaboration in procurement, and outline how technology and tools can help to make collaboration easier. We also outline some of the best practice we’ve seen on collaboration around the world, using centres of excellence and competency to set national standards.

There was great news in the GovTech space last month: US procurement tech startup CoProcure raised $22m. This was a landmark raise in a really important space.

CoProcure helps state and local authorities in the US to better collaborate on public procurement (to ‘co-procure’). Specifically, it allows public authorities to search through a database of existing contracts created by other authorities - and to piggyback on them to purchase through them, without having to run a new tendering process. This is called ‘cooperative procurement’, and is a compliant route-to-market used by about 90% of authorities in the US.

Of course, frameworks, or single-supplier contracts play the same role in the UK: authorities are able to quickly and compliantly procure through a framework set up by another authority. We also have shared services agreements across government for things like back-office processes, databases and cloud storage.

But we still haven’t solved the problem that CoProcure are trying to solve. Authorities don’t collaborate enough. And they miss clear opportunities to do so.

Example: siloed procurement approaches in London councils

In 2020, we worked with the London Office of Technology and Innovation (LOTI) to try and address this problem at the London level. Across London boroughs, teams were not buying technology, digital, and data services in the same way.

They were often buying the same services, with broadly the same end-users, and sometimes even from the same suppliers. But they weren’t collaborating. They weren’t sharing notes about how suppliers had performed in the past. They weren’t co-drafting tender specifications. They weren’t thinking jointly about sustainability and social value. And they weren’t co-procuring.

Suppliers were negotiating contracts separately, with individual boroughs, and London wasn’t getting the value-for-money or delivery quality from its suppliers that it needed.

‘Soft’ and ‘hard’ collaboration

So, tools like CoProcure, framework agreements, and shared services models help you to procure jointly. To legally sign joint contracts, or contracts that have been part negotiated by another authority. But across the entire life-cycle of a procurement, there are many opportunities for ‘softer’ collaboration. These include, for example: conducting joint market engagement days when scoping out similar opportunities, sharing databases of supplier intelligence, or even just checking to see if they’re being over-charged for services with same supplier.

In London, we found that often the most valuable areas for collaboration were at the earlier stages of the procurement process. And that, despite great groups and communities of practice across London commercial teams, the opportunities for early-stage collaboration were not being taken.

To pilot the value of this idea, we looked at how London boroughs are buying Housing Management Systems - the systems used for managing all aspects of social or council-provided housing, including tenancy management, repair requests, payments, etc. These are big - monolithic systems - and a few big suppliers dominate the market in London. And despite the fact many boroughs are working with the same suppliers - for the same services - contracts are negotiated (and priced) totally independently.

In the spirit of early-stage collaboration, we thought about key activities boroughs could do together upstream. This meant - for the first time ever for HMS in London - we conducted user research and service design work across multiple councils. as well as a market engagement process for incumbent providers and new innovative point-solutions. Working within a new HMS working group, we were able to shape understanding of the problem and market capabilities, which was brought together in a cross-London HMS contract specification for a new HMS, led by Hounslow borough. Just empowering eachother with enough information allowed boroughs to make a much more informed, and collaborative decision about how to procure their next HMS.

Where can - and should - authorities collaborate?

And this only really scratches the surface of how authorities can effectively collaborate - when looking at the opportunities across the entire procurement value chain. Looking at best practice around the world, we have seen authorities work together on things like:

Pipeline tools - Shared future-facing pipelines of upcoming procurements, to inform eachother and the market (look at Local Gov Digital’s Pipeline Tool).

Shared approaches to sustainability and social value - Procurement teams need to make really difficult trade-offs and evaluation decisions for things like sustainability - and common tools and guidance can help (as it does in the Netherlands).

Cybersecurity - Cybersecurity in procurement and supply chains has also become a major priority - and an area where collaboration on approaches, standards and mitigations can build resilience. Check out our work to build common cybersecurity capacity across local councils with the GLA.

Joint market engagement - Running joint processes to reach out to suppliers about common or similar services, as well as sharing supplier databases, market mapping insights, and details about past performance.

Supply chain analytics - With tools like Sievo, Ignite Procurement, and Vamstar, the opportunities for supply chain analytics are vast for authorities. And as these tools develop analytics across multiple authorities, they are able to provide standardised, benchmarked analysis on things like pricing, supply chain risk, and consolidation opportunities.

Training - Training is best run across organisations, allowing authorities to learn from bright spots of best practice. In Germany - their centre of innovation procurement - KOINNO provides multiple training resources for buyers and suppliers, based on regular engagement with end-users.

Wherever there are benefits of organisations working together - across people, processes, tools and technologies - there are opportunities for collaborative procurement, and more authorities should be taking advantage.

How a centre of excellence and best practice can help

One model that many governments around the world have pursued to foster collaboration is the ‘centre of excellence’ or ‘centre of competency’ model. These often take the form of physical centres and organisations, with accompanying digital tools and resources. And today, best-in-class centres of excellence are now a core part of the e-procurement stack of a government.

Below are some examples of how centres of excellence around the world have helped to foster collaboration, and build digital tools to make it scalable:

Netherlands - PIANOo - Developing a sustainability evaluation tool

PIANOo - the Dutch Government’s procurement centre of excellence - plays an important role in standardising and professionalising procurement activities in the Netherlands. As a centre of excellence, it has a lot of support and user buy-in. It has a big focus on sustainability, offering learning materials, training and guidance for authorities. We think that criteria tool that they have developed for authorities to decide what sustainability criteria to use is a great example of how they have helped to set common approaches across government.

Germany - KOINNO - Developing a toolkit of innovation procurement tips

KOINNO is body set up by the German Government to make public procurement more innovation-friendly. KOINNO works hands-on with authorities to make their procurement processes more efficient, including supporting with organisational change and restructuring.   Their toolbox of 100 innovation procurement tools for authorities and SMEs is probably the best example of how to effectively share best practice across government.

Austria - PPI Service Centre - Building an innovation marketplace

Above, we highlighted how supplier sourcing and market mapping is a key area where authorities can work better together. Austria’s PPI Service Centre - a centre of excellence operated by Austria’s central purchasing organisation (CCS equivalent) BBG - has developed tools to help with this. One of its core offerings is an e-marketplace of innovative suppliers to support authorities with their sourcing and market intelligence - as well as regular newsletter and information updates profiling new, interesting suppliers. Nice example of a centre of excellence helping to make sourcing better across government.

Scotland - Procurement Centres of Expertise - Journey mapping for authorities

There are four ‘Procurement Centres of Expertise’ in Scotland, which between them, provide support and guidance to all public sector bodies, including universities, health and social care. The Expertise Centres have produced a series of tools to support procurement officials, including Procurement Journey. We are big fans of Procurement Journey - it is an interactive ‘tube map’ style tool that provides step-by-step guidance for public sector buyers throughout the procurement process. Simple clear and intuitive way of helping authorities to align on nest practice.

Chile - ChileCompra - Using data to drive procurement optimisation

The ChileCompra Observatory is a great example of a centre that is hyper focused on improving purchasing and procurement efficiency in a data-driven way. An official’s day to day at the Observatory involves monitoring the purchasing processes published on ChileCompra (the country’s procurement portal). Based on this data, the Observatory issues recommendations to State bodies on how to improve various aspects of their procurement - including pricing, regulatory compliance and inclusiveness, to name a few. This kind of insight is only possible by looking across authorities, and benchmarking their performance based on good data.

Canada - Centre for Greening Government - Tracking Net Zero progress

Canada’s Centre for Greening Government collects and shares best practices and knowledge around federal government Net Zero goals. One of its most interesting contributions as a centre of excellence for public procurement authorities is that it tracks government performance towards Canada’s Greening Government Strategy through the Greenhouse Gas Emissions Inventory.

We’ve tried to show in this article that there are so many ways that authorities can work better together on procurement. And there are many who do it brilliantly all the time, but we think the opportunity still hasn’t fully been seized. The model of the centre of excellence (which as outlined above, can take many forms) can help to embed collaboration in the day-to-day work of procurement teams - especially when digital tools, forums, marketplaces and analytics can help to make their support more scalable.

PUBLIC has been working with governments around the world to help them to make procurement more effective, transparent and innovative. To learn more about what other governments are doing to improve their procurement approaches, and how they are using new technology to do it, t get in touch with our Procurement & Business Systems Lead, johnny@public.io.

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Johnny Hugill

Lead, Procurement & Business Systems

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