The value of the purchasing department as a strategic tool must be fully appreciated.
As the municipality’s window on emerging technology that will support the provision of municipal services, the purchasing department may monitor and advise senior management of the probable impact trends and conditions on delivery and the cost of providing such services.
This information can be fed into the strategic management process.
To play this vital role successfully, it is not satisfactory for the municipal purchasing team to process requisition after requisition like robots.
Like all purchasing professionals across both the public and private sector, they play a key, indeed, indispensable, role in the prudent management of the funds entrusted to their care. Accordingly, they should actively pursue cost savings initiatives. These must be sought out actively, as well as exploited as they present themselves.
However, in contrast to their private sector counterparts, for municipal buyers and the purchasing managers, the objective is not simply to drive the best deal (i.e., to get the best value materials and services for the amount expended), but it is also essential to carry out this mission in a manner consistent with the public trust placed in the municipal administration.
They must advise elected officials as to the range of choices that are open; they must guide the formulation of policy so that clear direction is given to all staff as to how those choices are to be made; and they must ensure the policy direction prescribed by council is given effect.
In terms of day-to-day administration of the purchasing function, considerable attention must be placed on the apparent and actual integrity of the purchasing process. The professional must be a thinking, proactive member of the municipal administration, not simply a form pusher or gatekeeper.
He or she must be aware of new developments in supply and of new types of product that are more suited to municipal need.
The buyer of the future must work co-operatively with other members of the municipal administration team, drawing on their knowledge and experience to supplement his or her own.
Such a professional will also be able to carry out his or her responsibilities in a way that best promotes the efficiency of municipal operations.
Proper employment of the usual range of techniques open to a purchasing department (e.g., proper recording and documentation of municipal contracts, standardization of specification and terms of contract, anticipation of need, etc.,) serve both efficiency and integrity.
When I talk about process and procedure many of the techniques and theories that have evolved in the private sector with respect to procurement apply to public sector procurement as well.
However, the normal conventions of private sector purchasing practice – its assumptions, its theory and the way it carries on procurement – need to be modified to satisfy the overriding concerns that public procurement be carried on in a way that is open, transparent and fair.
Thus, there is a strong preference in municipal procurement for the use of a tender based system, while the direct negotiation approach that dominates the private sector field is utilized only in exceptional situations.
I have often discussed the need to focus procurement decisions on the best buy, the option that offers a municipality the lowest full-life cost.
I have previously discussed how such an approach complicates the use of the tender process. The problem is that without a focus on the strategic objectives of a municipality, concern with process and procedure may deteriorate into an excessive preoccupation with form, with insufficient regard to the purpose that the process and procedure is intended to serve.
No one expects the government to make a profit.
However, the public does not want, nor should tolerate, a government that is inefficient to the point of being wasteful.
Stephen Bauld is a government procurement expert and can be reached at firstname.lastname@example.org. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
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