The last few weeks have been extremely interesting in the world of public sector procurement, as two separate government undertakings or initiatives if you like are underway on both sides of the Atlantic.
What started as an interview with the new Secretary of Administration for the Commonwealth of Virginia culminated in the release last week of the Governor’s Supplier Diversity Advisory Board’s report which seeks to more effectively engage and utilize the indigenous Small, Women and Minority- owned business sector as a means of stimulating the Virginian economy. Here is the link to yesterday’s broadcast in which an expert guest panel offered their perspective on the report’s Ten Big Ideas (Ten Big Ideas: Virginia Shifts the Paradigm in Government Procurement Policy).
Meanwhile across the pond in the UK, the House of Lords Science and Technology Committee is trying to figure out how they can leverage that Government’s spend to drive innovation.
While both initiatives share the common theme of looking to expand the impact of their respective purchasing prowess beyond the scope of mere buying and selling, one point that came out (or perhaps stand out would be a more appropriate reference) in the US and UK undertakings, centered on the inability to effectively engage Small-Medium Enterprises or SMEs. One of the chief obstacles to increasing involvement of the SWaM market – which requires improved SaaS, non-consultancy model solutions, is a direct result of what the experts called a gap in complex contracting expertise.
It is an interesting dilemma in that the lack of expertise in this critical area of contracting actually presents a significant problem for many governments in terms of leveraging their purchasing volumes to achieve objectives centered on driving innovation or stimulating domestic or regional economies. A disconnect if you will that prevents them from gaining access to the very technology that is required to achieve the objectives of their respective initiatives. As I write these words the irony that seems to come through loud and clear regarding the House of Lords Committee is that it appears that the UK Government has been unable to fully leverage the innovative platforms (and suppliers) they are seeking to support through the various hearings.
This of course is one of the reasons why the Strategic Relationship Negotiation Methodology paper (see below) that I shared with you a couple of months ago is important, in that it lays out the practical methods for complex acquisitions in an understandable format. This resource can then be used to procure the needed emerging technologies to which Virginia referred in it’s report.
The key point as Mark Amtower put it in yesterday’s guest panel discussion, as did Colin Cram in a previous broadcast regarding transparency in government procurement, is that the majority of buyers have not been equipped with the necessary skills and tools to make complex purchases, while those who posses the required skills are often times overworked and under tremendous pressures associated with perpetually looming deadlines.
This capability gap is frequently used to differentiate between purchasing and procurement, in which the former consisting primarily of front-line buyers lack the prerequisite skill set beyond filling an order. Acquiring this capability according to our experts is not something that can be easily accomplished in a relatively short period of time. Once again, this is where the above referenced paper and complimentary technologies can prove to be most beneficial.
In the end, the highlighted goals of the US and UK governments are to be applauded. However, the true measure of their ultimate success will be a direct result of their ability to execute on a practical, real-world basis. Therefore addressing the aforementioned obstacles are an important priority that they cannot afford to overlook.