We recently announced the publication of our Public Spend Forum research paper, very kindly sponsored by our friends at BravoSolution, and titled simply but accurately; Procurement Collaboration in the UK Public Sector. The research work was carried out earlier this year, and involved an on-line survey and then a series of structured interviews that Peter undertook with UK procurement leaders who had experience with collaboration in its various forms.
The report looks at how collaboration is perceived across the public sector, and provides some thoughts and recommendations in terms of how it might be improved in the future, although there is much to applaud happening around the public sector currently.
As we say in the Executive Summary – “there is much good work going on already, and indeed, promoting it more and explaining the benefits of collaboration (which are far from being purely leverage and cost savings) is one of the recommendations”.
However, we do believe that while some collaboration has not been a success, there is scope for more, particularly among smaller organisations who currently lack the critical mass generally needed to deliver top-quality procurement performance. That is as much about skills as it is about market leverage:
“… we believe there are opportunities for smaller public organisations to combine their efforts in terms of procurement – there are a number of factors which make this attractive. Those who do not are increasingly finding they have real problems in maintaining a credible procurement operation given external factors such as skills shortages”.
You can download the whole paper here, free of charge. Here is a short excerpt from the introductory section, in which we identify three types of collaboration which are then considered in more detail in the main part of the report.
What Do We Mean By Collaboration?
Collaboration in public procurement takes many forms. For the purposes of this review, we are considering three types of collaboration.
Collaborative procurement organisations (CPOs) have a specific purpose to put in place contracts or framework agreements that other organisations, the users or members of the CPO, can utilise. Generally, these organisations’ primary purpose is as a CPO, but there are some examples in the UK public sector where an organisation whose major role is not procurement also acts as a CPO. The Countess of Chester Hospital Trust is an example; it is primarily a health organisation, obviously, but now also puts in place framework contracts that others in the health system can use. So in that sense it is acting as a CPO.
Shared services organisations carry out defined operational activities on behalf of multiple clients. The work is usually performed under agreed contracts, whereas in the case of CPOs the user / CPO relationship is usually less structured. In the procurement space, shared services can include direct buying activities and also transactional management around order handling, invoicing and payment.
“Joint buying activities” is our catch-all term for activities in which a number of organisations, from two to many more, come together to carry out defined work, without setting up a separate CPO or shared service operation to execute it. So it might be running a combined tender across two or three local authorities, with one taking the lead, or a group of educational establishments working together on a staff training initiative to develop procurement skills.