Good Practice
Smart Public Procurement – EC Conference in Prague Is a Success

Last Friday saw the European Commission hosting the fourth annual conference on Public Procurement titled “Smart Public Procurement: new frontiers for public procurement” at the Hotal Grandior in beautiful (but somewhat overrun by tourists) Prague.

It was well attended, although a large contingent of the 250 people present were from the home country. But even so, we counted over 20 different largely European countries listed on the delegate list. The attendees ranged through procurement practitioners, from central purchasing bodies as well as individual contracting authorities, academics, lawyers, consultants and of course policy makers from the Commission and elsewhere.

Pierre Delsaux , Deputy Director-General, DG Internal Market, Industry, Entrepreneurship and SMEs, European Commission, kicked off the sessions, saying that as public sector spend with suppliers accounted for 20% of Europe’s GDP, there is a huge opportunity to use public procurement to help European economies. The new directives aim to do that with five key objectives.

1. Make procurement procedures more simple and more flexible

2. Drive eProcurement uptake and use across Europe

3. Support wider objectives with a social or economic objective such as innovation

4. Support smaller suppliers (SMEs) – facilitate access to public procurement

5. Fight corruption and identify / manage conflicts of interest

The directives and legislation, he said, are only a basis. We want to make them work on the ground by ensuring efficient use in countries. We still see too much red tape in procurement, and not enough professionalism. But we appreciate it is difficult particularly for small contracting authorities. We want to provide guidance and assistance, for example in promoting eProcurement. The fight against corruption is also critical – and we must build cooperation with the Commission and between countries.

Sam Rowbury, Director of Policy Delivery at the UK’s main central procurement organisation, Crown Commercial Service, (CCS), then spoke about the UK situation. The CCS role includes governing public procurement and achieving savings through several mechanisms; a direct buying service, a consulting type advisory service; policy delivery; and capability development.

The UK objective is to allow procurement people to think more creatively, deliver better outcomes, and be less constrained by rules and process in order to reap benefits. There is also new UK specific legislation e.g. concerning prompt payments through the supply chain.

There is no doubt that the UK is leading in many areas across European procurement. We do wish though that the picture on spend with SMEs was not presented in such a “political” manner – the government as we have said before is not “spending 25% with SMEs”. It is spending directly just over 10% – the rest of the 25% is made up of a fairly questionable “spend through the supply chain” analysis. But anyway, Rowbury did well with a pretty standard CCS overview, and in talking to him over coffee, he is clearly a very smart guy with his heart in the right place on public procurement!

Then we heard from Wouter Stolwijk, Director of PIANOo, which is the Dutch central procurement organisation. Stolwijk is clearly from the free-market wing of public procurement – it is all about the results, not the process! In a very interesting and eclectic speech he quoted “End of History” historian Francis Fukuyama: “The worship of procedure over substance is a critical source of political decay in contemporary liberal democracies.”

He described the current situation as the dominance of legal rules and lawyers, with procurement people believing “illusions about objectivity.” The protection of supposed rights of suppliers takes precedence over taxpayers rights, and ultimately nobody is satisfied or enthusiastic about public procurement.

He wants to see a new approach – primarily with an economic angle instead of legal, a focus on professionalism, and we should hire more economists into public procurement (I’m not sure about that given the track record of economists to be honest!) We should replace procurement law by “internal rules of professional procuring behaviour.”

It was a very stimulating speech, although I’m not sure we can just transpose commercial private sector procurement ideas so easily to the public sector, to be honest. But that was perhaps a big strength of this Prague event – we did hear a lot of different views within the eight hours or so of the event. And we will be back next week with a more detailed look at a couple of the stand-out presentations from the day, including a great session on corruption from an inspirational Croatian speaker!