Technology & Tools
Petra Ferk on Implementing eProcurement in Real Life

Readers who are aware of the wider Spend Matters family of websites will know that we have a strong interest in the world of technology that supports the work of procurement, supply chain and related professionals. So one of the presentations at the recent Early Career Researcher conference in London (organised by Dr Pedro Telles) that caught our eye came from Petra Ferk from Slovenia. She is Assistant Professor for Public Administration at the Graduate School of Government and European Studies, Slovenia and also works for the Institute for Public-Private Partnership, Slovenia.

petra ferkHer presentation was titled “Implementing e-procurement in real life” which we liked immediately, as Spend Matters is always keen on both intellectual thinking and practical implementation of procurement techniques, technology and ideas.

The Commission has mandated the introduction of eProcurement by 2018, but the directive talks about publication of notices, access to tender documents, and submission of bids rather than what we might consider the wider process, including evaluation of bids or award. But what is it that the Commission hopes to achieve by this, and what is actually being achieved by the early public sector adopters of eProcurement?

After that scene-setting, Ferk then took us into the heart of her research and analysis. She pointed out that the first authorities and countries to implement eProcurement talk about the success of their initiatives, in particular from the point of view of greater transparency and reduced cost of running the procurement process. Where eProcurement has been introduced in other parts of the world, it is the same; the “savings” are often given at the top of the benefits list.

But, Ferk pointed out, the EU has other objectives that it looks to fulfil from public procurement processes. In particular, it seeks more openness and the ability for firms to win cross-border contracts. It also aspires to drive innovation in markets through procurement. So is it disappointing that “member states are stressing efficiency benefits from eProcurement like speed and cost, rather than the free movement of goods”.

Ferk believes that eProcurement should be about these wider goals, not just savings – goals such as “eliminating national practices which restrict access from another member state”. She pointed out that the share of genuine cross-border trade in public procurement is still very low at around 2% of spend. eProcurement should have the potential to help this percentage increase. As part of her research, she is looking at other countries: some such as Chile, Brazil, and India have developed or are developing one huge, expensive, national eProcurement platform. The EU on the other hand can’t even work out how many different platforms it has, let alone standardise or aggregate them!

What Ferk might have to consider in her research, we’d suggest, is what the actual contracting authorities who are using and introducing eProcurement want from it. Because our feeling is that the problem lies there. A town in Bavaria, a government agency in Copenhagen, a county council in England have very little understanding or interest in these issues of cross-border trade and openness. Indeed, their interest is often diametrically opposite. They want to support local firms (who are made up of local voters), and see as much work as possible going to those businesses. Frankly, even if the bidder from the other side of Europe is significantly cheaper, many would pay the premium and choose the local supplier if they can get away with that.

Hence these decision makers are happy to see eProcurement as long as it is positioned as a tool for operational efficiency, and as long as it does not lead to suddenly having to handle many more “non local” bidders. So that explains the reluctance to move to more centralised platforms in many countries. If I keep my own eProcurement system, at least I may have some chance of keeping potential bidders at bay. So when suppliers complain about the cost of doing multiple PQQs and other bid requirements, they should understand that this is one mechanism by which contracting authorities might be deliberately increasing the cost to bidders to deter firms from participating!

So an interesting topic for Ferk – I don’t know whether her research will take her in that direction, but it would be interesting (for us anyway) if she looked at some of those real-world reasons why eProcurement is not generating the wider benefits for public sector procurement that some might want and expect.