Public sector procurement has traditionally been notoriously price driven. But a survey published by international recruitment consultancy Badenoch & Clark shows that this is now starting to change. More than eight out of ten of those questioned claimed that making procurement decisions based purely on price does not deliver value for money.
In the past, value for money was frequently equated with low cost. This view was re-enforced by pressure to provide a transparent and accountable service because cost was easily measured. Another important factor which supported the cheapest tender approach was shortage of time. Procurement professionals frequently feel that they are too time-poor to really learn about potential suppliers and comparing prices is a much quicker approach.
The figures from the survey show that attitudes are beginning to change. There’s now an overwhelming acceptance that “cheap” does not necessarily mean “good value.” The public sector tender process in particular has seen a great deal of change in this direction. It’s become a process that is matching up a great deal more to the realities of procurement, with the focus being on value rather than purely on cost.
The national procurement strategy and eProcurement are a major factors which are now driving change. 46 per cent of councils are now working with their Regional Centre of Excellence on improving procurement performance, up from 14 per centin 2004. More than half of councils are now involved in joint commissioning of services compared to 31 per cent in 2004.