Finalising his series on Procurement issues arising from last year’s hurricane season, as covered at the Caribbean Development Bank special conference, procurement coach and commentator Craig Brewin discusses the role of procurement and the lessons we can learn from those experiences. The rest of the series can be found here part 1, part 2, part 3, part 4, part 5
What are the lessons that the procurement profession as a whole can learn from the experiences of those sourcing in an emergency situation? In opening the workshop on procurement in emergency situations held in June this year Cheryl Dixon of the Caribbean Development Bank (CDB) described procurement in emergency situations as “an area of specialism within the broader public procurement field.” But is it specialist skills required or just effective governance arrangements and process design? She went on to say that “systems that fail to respond effectively during and after disasters can have long-term negative impacts on the recovery and resilience of societies.” Going further, she went on to say that the effectiveness of the local procurement system has a direct link to the impact that a hurricane or other disaster has on the damage to the overall GDP of the effected territory.
This impact is caused partly by those planning the response and recovery not fully utilising the expertise of the procurement profession in the wider issues of logistics and project planning. But it is also a result of procurement systems designed to work in one circumstance failing in another. This can mean a process that does not manage prices or ensure supply, or one where key controls have to be bypassed to work at all. This can put not only the immediate response at risk, but also long-term recovery.
The encouragement from the CDB was for procurement systems to have the emergency procedure built in, and to maintain the same levels of due diligence, if not the same routes to market. This seems particularly sensible in a part of the world where there is a lengthy hurricane season. But why should this be only in an area where the likelihood of an emergency is high? How many senior managers in organisations in other parts of the world know their emergency procurement procedures? And are they aware of the degree of flexibility they have to try different approaches when there is no emergency? Waivers and rigid procedures may not be the best way of doing procurement in an emergency but are they ever?
Following two days of discussion involving people who had carried out large-scale procurement activity in war zones, earthquakes, and hurricanes, a few consistent features were clear. Features that are really universal, rather than specialist, and important for anyone trying to work in partnership, satisfy funding agencies, or deal with an immediate problem: the sort of problem familiar to many.
Procurement principles are universal. The detail may vary slightly from organisation to organisation, but the principles are a key foundation of the procurement profession. The point of the profession is ensure these principles are maintained, regardless of how the procurement function is organised, regardless of the details of the scheme of delegation, and regardless of the rules and procedures that procurement has to follow. This means that if there is a switch to emergency procedures the principles stay the same, and there is still a strong commitment to due diligence, even if there is no tendering involved in the purchase.
It is also clear that you can’t be wedded to a particular procurement route in all circumstances. Tendering everything may be a useful procurement strategy and a means of mitigating risks, but it is costly and demonstrably not always the best option. Procurement systems need to allow for flexibility, and a properly designed procurement system should cover all eventualities, or at least be aware of them. Certainly, you cannot start to design procurement processes when crisis strikes, and centralised procurement instruments that can truncate the purchasing process are the mainstay of most organisations and should be, regardless of the immediate challenges.
Another key lesson is that the broad skills of the procurement professional are valuable for a whole range of activities, and people with these skills should be involved in key projects at an early stage, particularly where there are third-party suppliers and logistical issues to address. Also if you are purchasing under a highly delegated scheme of decision making then you need to ensure that buyers are able to defend their decisions. It is also important to be able to ensure that buyers are not conceding too much power to suppliers, even in circumstances that could be described as desperate.
It is also worth remembering that procurement has a language common across agencies and a common view of the buyer’s priorities. Adherence to the same principles and ethics in sometimes vastly different circumstances can demonstrate to external agencies, particularly those that provide funding, that they can have confidence in what you are doing and how spending is controlled. But this doesn’t just apply to hierarchical relationships, or emergency situations. Public sector bodies are increasingly looking to new ways of partnering and successful partnerships are often built around common values and principles more than a convergence of process.