Strategic procurement in the public sector: A mask for financial and administrative policy

Abstract

As government responds to demands to become more efficient and effective, procurement professionals are expected to focus primarily on the strategic aspects of procurement and less on routine transactions. In reality, public procurement masks the ability of government to transform taxes and other revenues into consumption by government institutions at federal, state and local levels, ostensibly for the public good. Public purchasers are told by their professional institutions and their private sector peers to be more proactive and less reactive in order to add greater value to their organization. However, tradition has decreed that procurement processes are managed by "unglamorous individuals" (Stewart, 1994) who are required, first and foremost, to satisfy the complex accountability processes of the government, an administrative principle, which is reinforced by recent failures of corporate financial governance. Furthermore, a search of contemporary literature shows little evidence that public procurement has penetrated the theoretical boundaries of public management or strategic management despite the profession's efforts over more than a decade to develop its profile. This paper explores two contemporary dilemmas: the boundaries of public procurement within the context of public administration and the mask of public accountability, which impedes the integration of public procurement into public administration (PA) and strategic theory.

Public vs. private sector perspectives on supply chain management

“…The final item rated more important by the public sector was procurement cards. This confirms the growing interest in and use of p-cards as a procurement tool in the public sector (Matthews 2005).…”

“…Public procurement has a reputation of being tactical, even clerical; adhering to "stringent policies and guidelines;" not requiring highly educated professionals; and stifling innovation (Matthews, 2005). However, public sector procurement is shifting from tactical to more strategic-and a focus on alliances, global sourcing, life cycle costing, empowerment, and tools such as procurement cards.…”

Fulfilling public procurement expectations in India

“…Studies underlined four traditional procurement principles governing public spending which are not applicable to corporate sector e.g. degree of involvement of managers in organizational activities which is more in enterprises than is prevalent in public sector, procurement decisions in corporate are on multiple factors like strategic partnership avenues, shared vision, total cost of ownership etc., while public sector must ensure level playing field for all vendors; and non monetary factors such as equity, competition, transparency limit the discretion of public procurement officials, thus inhibiting their abilities to operate at strategic levels [21,27,43]. The public procurement managers are also guided by government rules that may strive to promote a particular sector (like Small Scale Industries etc.)…”

Procurement leadership: from means to ends

“…69-71). If indeed there is a difference between private sector and public procurement in the extent to which either is strategic, this difference is most likely due to (1) the comparative ease with which major organizational decisions involving procurement may be made in the private sector on a financial basis alone (Smeltzer, 1998;Lester 2000); and (2) considerations other than financial (e.g., equity, competition, transparency (Schiavo-Campo & Sundaram, 2000;World Bank, 2004) which distinguish public procurement and may limit the innovation, creativity, and discretion of public procurement officials, thus inhibiting their abilities to operate at strategic levels (Matthews, 2005;McCue & Gianakis, 2001). Accepting the potential for such a difference, the remainder of this paper will focus mainly on public procurement.…”