Best Practices for Government Procurement

By:  Dan Warn

Every procurement executive wants to deliver savings, effectively manage strategic supplier relationships, and accelerate procurement cycles- all while proving their value to both internal and external stakeholders. And while risk and mandates are still important considerations in government procurement, cost containment and resource optimization are the top concerns on an executive’s agenda.

The question is how do procurement executives act on this? Here are five best practices to consider:

1. Transform the purchasing culture: Changing a culture is not an easy task when it’s been in place longer than anyone can remember. In light of this, it’s important to identify your organization’s current limitations so you can lay out an appropriate and acceptable framework for change. Along with solid leadership and a willingness to change, procurement executives can establish meaningful measures that focus on efficiency, cost savings and technology adoption.
2. Analyze your spend: Following your money is key for transforming your purchasing activities. How will you know where to cut costs or increase your budget if you don’t have insight into your current cost structure?
3. Be Transparent: Optimizing your sourcing activities can be a tough nut to crack when you have regulations and negotiation limits to balance, and a confusing bidding process at hand. The solution? Be open to industry input and innovation. Be transparent about what you need from your suppliers and ask specific questions to see how they’d solve your problem.
4. Make a Firm Supplier Commitment: Leading procurement teams know exactly what is needed to improve contract terms and strength procurement’s negotiation power. They do this by leveraging spend analysis data, collaborating with business stakeholders, and sharing desired outcomes with suppliers. Going to market just to “test the waters” with non-guaranteed bids just drives up the costs for the suppliers.
5. Move beyond the Technology: Technology is pivotal in transforming public sector procurement, but to fully take advantage of the benefits it has to offer, you must focus on the people, process and skills behind the technology. To do this, procurement needs to understand where the team excels, what their weaknesses are, and how to get the most out of investment in procurement technology.

Earlier this week I presented on this topic at the NCMA – Government Contract Management Symposium. Couldn’t attend? Check out my presentation here.

Here are a couple other resources on this topic:

1. Ten Ideas to Make Your Procurement Department More Strategic
2. Best-in-Class Public Sector Procurement