Public Procurement - Challenges and Solutions

The participants of this year's Regional Conference West met in Essen on 6 June 2018 to discuss together what innovative public procurement means and how it is already anchored in the participants' companies. The focus was on measures that lead to greater consideration of innovations in institutions.

During the discussion, it became apparent that a procurement strategy derived from corporate strategy does not exist in most of the companies. However, this is a prerequisite for purchasing being taken seriously within companies. Employees in the procurement departments are not only struggling with the lack of establishment of their department, but also with staffing bottlenecks, which not only ensure that strategic issues have to take a back seat. The intensive consideration of innovations and new procurement procedures also suffers.

Break the vicious circle

What goals does purchasing have to set in the future in order to break out of this vicious circle of lacking staff resources and a lack of standing? The proposals are varied: a company-wide procurement strategy has to be developed. An establishment of the purchasing department can be obtained through the obligation for the early involvement of the procurement department by the departments. The communication structure between specialist departments and purchasing must also be reconsidered. For example, with regard to IT procurement, employees of the purchasing department could be anchored on-site - ie directly on site - in the specialist department.

In order to ensure a continuous development process, regular training should be provided to the purchasing department staff. Particularly for products and processes that are subject to rapid and constant change (for example, in IT procurement), the qualification of contact persons is essential.

Procurement can be made more efficient and more targeted by purchasing digital systems. An extensive risk management by means of early warning systems would also be possible.

It is beyond question that these processes have to be supported or even forced by the management.

The status quo in Germany

Professor Michael Eßig from the University of the Federal Armed Forces Munich presented sobering facts in his presentation on the status quo of public procurement in Germany. With still half of all public allocations, the lowest price is the allocation criterion and not the most economical offer. This often prevents the consideration of innovative products and services.

Driving forward strategic goals is also of secondary importance in public German procurement offices due to the extensive day-to-day operations.

Innovative procurement using the example of the Ruhrverband

How innovative public procurement can look in practice was shown by Bernd Hosemann from the Ruhrverband. The topic of his presentation was the successful tendering of polymeric flocculants. For a long time, purchasing department at Ruhrverband also faced the above-mentioned problems: the procurement department was barely involved in the purchasing process of the specialist departments, and in most cases the offer price was the only allocation criterion.

After a significant strategic reorientation, early integration of procurement into procurement processes was achieved. In the tendering process for polymeric flocculants, the suppliers were finally evaluated holistically and a continuous improvement process (CIP) was introduced.