Procurement: Where We Are Focusing

So it’s week 8 of the accelerator and it’s time to recap our journey to date.

Weeks 1 and 2 were spent chatting with government agencies and businesses to identify (1) where the pain of procurement is located and the (2) root cause of this pain.

• This gave us (3). Bingo!  Opportunity…

• So we spent weeks 3 and 4 validating and prototyping ways to ease the pain (4). And we spent…

• Weeks 5 to 7 testing new ways of working with a live audience made up of government and business folks.  We’re still working, but things are looking good so far to get to the better place we've affectionately called '(5)'.  

4 weeks to go. Root for us - let's talk about that ...

Best, Team PuP

Rumi Shivaz: Excellent Post On "Buyers & Suppliers Trust"

Relationships of Mutual Trust Between Buyers and Suppliers

In the business development role for my company, I spend a great deal of time identifying new customers/opportunities and bringing solutions to my clients.

This hunting process is one the most difficult and frustrating jobs on the planet.  However, with years of tenacity and persistence, I’m getting better at this high payoff activity every day – now that I’ve learned a secret.

As a company, we have learned to recognise some of the early indications of when a relationship is going to work well, or when it is going to be hard work for both parties.  The secret is in the relationship of mutual trust we develop with our clients as buyers.

Here are the top 3 things that we have learned that may also help you build an excellent relationship with your buyer-clients, or if you are a buyer, an excellent relationship with your suppliers.

We agree, what do you think - let's talk about that ...

note: this is a LinkedIn post and I'm not too sure if you need to have a LinkedIn account to read it

[UPDATED] Procurement and SMEs

+Mike Riversdale +Ed Strafford and I have spoken to 40-50 folk about procurement, and we heard consistently that the process favours large suppliers (small business owner: "I don't even bother trying to do business with government anymore").

Given that 97% of businesses in New Zealand are SMEs (<20 employees), we wanted to know whether the 'large supplier' bias [update - see footer] was just felt by the folk we spoke with OR part of something more systemic.

So we harvested some data from the Government Electronic Tenders System (GETS) and Statistics New Zealand to find out.

 Here's what we got...

The red bars represent the breakdown of all NZ businesses by size.  The green bars are a breakdown of the number of businesses that are 'successful' in winning GETS tenders.  So yeah, there's a bias in favour of the big fish.

The government procurement process is meant to be open, fair and transparent, but sometimes in life, unexpected outcomes trump intentions.

We'd love to know what you think...post a comment or chat with us ...

[UPDATE 21 May]
"bias" - we have used this word in this post with a particular meaning in mind - the numbers are telling a particular story. We DO NOT mean to imply an "active bias", in the sense Government is actively discruminating. We are grateful to those that have pointed out this double meaning allowing us to clarify.

Please don't hesitate to ask if you have any queries about this or other posts - we are human and fallible as such, we do not have evil intentions :)

[UPDATE 3 June]
The 'Government Procurement of Products/Services from Businesses originally looked like this:



So why did we remove the 'sole traders' from the 'Government Procurement of Products/Services from Businesses...

Because there aren't many sole traders that have registered in GETS (see below):

R9, It's Not All Work ... Actually, It Is Even When It's Not

So a movie, that's a thought buzzing around the head - what we're attempting to do is change behaviour and the way the I, +Ed Strafford and +Nigel Chang generally work is with words. Now, words are fine but if we wanna get inside people's hearts (this is change after all) we need to do different. Especially when we come to tell our story.

And to that end we talked, "How" with the R9 crew and +Sophie Buergin pointed us to many examples. And this is also her - enjoy:

First snippets of the swiss surf documentary I WANNA SURF from I Wanna Surf! on Vimeo.

Kiwi ICT Is Growing And Procurement Can Help Increase The Rate

"When asked about how the government planned to support small and medium-sized ICT firms as a buyer of services, Joyce said it was a case of ensuring government agencies adopt the procurement rules."

source: ICT sector drives rapid economic diversification - Joyce

The rules, those darned rules, surely he doesn't think the all encompassing and restrictive rules are the way ... NO! Woah, before you plough into it, know that it's not the rules that are the problem dear reader, take a look yourself:

• Principles
• Rules

No, it's the myth of what the rules have come to mean ... ask yourself, do the rules say you can't talk to the market (all of the market) before you decide how to deliver upon an outcome - do they?

In fact, if you really did read the NZ Govt principles linked above you'll see that the complete opposite is specified ... so, why doesn't the normal agency behaviour follow the rules? Why is the myth bigger than the reality (apart from that's the nature of myths, doh!).

Let's talk about that ...

[UPDATED] CALC - Would This Be Useful?

Search awarded hourly rates for labor categories
CALC lets you conduct market research on professional service labor categories more quickly and easily. It also takes the guesswork out of cost estimations — all results shown are actual awarded hourly rates from GSA service schedules — helping you make more informed decisions.

https://calc.gsa.gov/

And if NZ Government (local, regional but particularly central) think this is cool - go for it, the code from the US Government is free and available here: https://github.com/18F/calc

[Update: added 15-May]
From +Nick Williamson's tweet to us we had Spend Network from the UK come to our attention:

We're a small team that have been working with public procurement data for over 12 years. We've grown tired of waiting for Government data on spending and contracts to be compiled into a useful tool, so we've decided to build a solution ourselves.
What are we doing?We're building a business for both Government and suppliers to Government. We believe that Government shouldn't have to pay for spend analysis, as long as the data is open, and that suppliers need better data on Government opportunities. If you'd like to know more about what we're doing and how we work, we'd be delighted to tell you more.

https://spendnetwork.com/

Our Week 5 "Report"

Problem: Businesses report that current government procurement processes are overly prescriptive, are not outcomes based, do not support innovation and favour larger suppliers. Opportunities exist to source innovative solutions to enable meeting of outcome requirements and to allow any company in NZ to apply for a tender regardless of their size and/or resource limitations.

After 2 weeks of distilling private and public sector issues with the current perceived “one size fits all” procurement process the team have been focussed on ensuring the basis for procurement outcomes are met, essentially that relationships exist prior to the tender process. These relationships are predicated by an “outcome” based approach and involve many behavioural changes to work together to define the problem set. A number of pre-defined paths, based on need, value and approach are being road tested with agencies to ensure a true fit/outcome based set of services/products are created.

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A little something we send each week - what do you think, let's talk about that ...