A Few Thoughts on Public Sector Procurement

Public Sector Procurement

Those working in the realm of public procurement – such as universities – must master customer satisfaction and government expectation 

Original author: Jerome Benedict, Kudos Consulting Group, UBC Procurement Clerk

Download the full article and more in our Procurement Sense Magazine.

Public sector procurement is a balancing act, with requirements to follow federal, provincial and organizational policies and regulations. Timelines and paper work, as a result, can lead to an unhappy client and an angry vendor.

As a procurement professional working at a public sector university, being able to balance the needs of the client while satisfying government regulation and ensuring the vendor is paid within acceptable payment terms can lead to the early onset of hair loss. Guidance is sometimes hard to find and defining the path you want to take in procuring products or services for universities is a complex network of policy and regulation.

It’s a difficult task making sure that your client is happy and that the product they are looking to source arrives in a timely manner, at a cost that is within their budgeted requirements. There are many factors that can affect the overall mood when procuring products or services in the public sector – clients have their own requirements that may not align to procurement standards set up by the government and vendors may have payment terms that are against the standard payment terms of various organizations. Government regulation could inhibit a sole source, if multiple vendors with similar products are available.

I work within the procurement department at a large university. A number of our team members are not aware of government regulations that promote transparency and fairness in the market. That’s critical information, as those regulations are designed to ensure taxpayer funds are spent in the most efficient way and yield the greatest returns possible.

For example, purchases of more than $50,000 must come in with either three quotes from qualified vendors that provide similar products, or with a sole source form outlining why the purchase must be made from this sole vendor. The sole source form is used if no other vendor can provide the requisite product or service. Interestingly, we are seeing an influx of groups using the form to avoid having to provide multiple quotes for substantial purchases. This is a big no no for us in the procurement department, but researchers or grant holders are, sometimes, not particularly concerned with how they get their products – they just want the goods to meet their scientific requirements, come in under budget and arrive as soon as possible.

At the university I work for, we standard KPIs to ensure purchases are made within seven to nine business days of receiving a request. We pay vendors Net45 on receipt of approved invoices. Based on the complexity of the purchase – price, timeline, approvals, logistics and customs issues can be factors in a purchase – it could take, potentially, between six weeks and a year to complete a purchase.

This lack of commitment from clients can be hard when trying to help them source a product or service. Unrealistic expectations are a big problem and individuals are under the impression that the item they are purchasing is the only important purchase being made. Building strong relationships with vendors, when given the option, can lead to discounts and even operational efficiencies.

We as procurement professionals are there to help our clients make the best decisions when spending their allocated funds and ensure that taxpayers are receiving the most bang for their buck. The best we can do is teach. Continuous learning and sharing of new practices and policies with the purchasing community – other departments – is key to building a better understanding of the nature of procurement. My department works relentlessly to help teach the proper process and educate all users down the supply chain. Through continuous development we can hope to achieve new operational efficiencies and a potential cost savings.

A Procurements Clerks thoughts.

What do you think?

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