Episode 15 of the Public Procurement Leaders Podcast with Guest Peter Smith
Imagine waking up one morning to find your name on the front page of the Sunday edition of the Financial Times. That’s when the difference between public and private procurement really hit home for Peter Smith, our guest for episode 15 of the Public Procurement Leaders podcast with host Raj Sharma.
“People tend to immediately consider that regulatory or legislative angles are the biggest difference. No doubt about that…you do have to work within the rules your given. But I believe the bigger difference is, you’re working on projects and procurements that are clearly linked to policy objectives, and hopefully the greater good for citizens and taxpayers.”
The distinction between public and private procurement is a topic on which Peter writes regularly, along with the vision he shares with Public Spend Forum to improve government contracting. Peter sees improvement primarily as a people issue, and specifically the leaders in an organization who need to have more developed interpersonal skills. “Senior people need to be more persuasive, have listening skills, empathy.” These traits are more emphasized in the public sector where they will be dealing with myriad stakeholders, officials, and even the press.
“The people I have seen who are most effective at the senior levels of government procurement are very good at working with their senior colleagues, but also those different stakeholders. There’s something about being able to put yourself in their shoes, and relate to what is driving them. There’s something about being able to put yourself in their shoes, and relate to what is driving them.”
That isn’t always easy. From selecting suppliers to ensuring that outcomes are enabled by the contract structure, Raj and Peter both observed the limited room for error in the public sector because if things go wrong, officials end up on that front page. But that doesn’t excuse us from trying to break down the barriers that exist to improving public procurement and encouraging new suppliers to enter the market.
“Many of the barriers are self-created by the public sector. For example, we’ve seen a general trend to aggregate spend. It is well intentioned – if we do bigger contracts we’ll do better deals and save money. But in actuality, procurement people overestimate economies of scale. So we create huge contracts and we wonder why small companies can’t bid on them.
Another thing that stands out to Peter, and which is ironic given his awareness of the publicity trap that exists more in the public sector than in the private, is the overzealousness by which the profession is now trying to control “maverick spend.”
“If you go back some years, when there was a bit more stuff that went on without the professional procurement people knowing about it – some of it might have been a bit dodgy, some a bit corrupt – but it did give the small supplier an opportunity to find someone in the organization willing to take a chance on them, and give them a small piece of work. But now that’s gone.”
The last barrier Peter notes is regulation, which makes it tougher for small businesses to get involved in the market. This is actually self-created, and not out of our community’s own control. For instance, “we can break up contracts, stop aggregating different services into huge prime contractor deals, make sure your tenders are appropriate to the size of the business…there’s lots of positive stuff we can do. It’s not inevitable that small firms can’t compete.”
We can’t agree more, and as Peter affirms during his episode, our work together on GovShop, a supplier intelligence platform and ecosystem to support public procurement, helps buyers and suppliers connect in the public sector is a big part of breaking down these barriers. Check out several events we are hosting to support this mission and register today – they are free!