Two Solutions To A Hard Problem

Procurement / By /

Two Solutions To A Hard Problem

April 12, 2022
Procurement

In our last post, I suggested that public procurement has a big problem: an inability to account for, or record failure. Today I’m going to suggest a possible solution. One that would provide the sort of insight that we can use to understand contract failures in procurement.

We’re proposing two initiatives:

In addition to what we would consider ‘normal’ transparency requirements, every contract should, report three, simple metrics:

  1. A date of the last payment made for the contract.
  2. A total value of spend made for the contract.
  3. A binary confirmation of whether a supplier delivered the contract requirements.

The purpose of this is to create a body of data about how buyers’ expectations at the outset of a contract deviated from the actual delivery.

The second initiative that we propose is to assess the publishing of procurement data as part of each organisation’s annual fiscal audit. A failure to publish all of their data should be sufficient to fail the audit inspection.

These two initiatives would give researchers robust data on what is happening across contracting. If this data was published at scale, it would be a trivial matter to isolate the factors that are likely to result in a contracting failure. Failures might be linked to poor practices by suppliers or poor contracting terms, but with good data, the ability to predict poor outcomes becomes much more real.

The country that has made the most progress on contract management is Slovenia, where Mitja Medvešček and his team at the Ministry of Public Administration have driven through changes to the law and their technical infrastructure to be able to monitor spending on contracts and to assess performance. What’s more, they’re doing this in the open.

The public’s awareness of what is possible with data and analysis is changing, governments need to catch up. If you’d like to know more about how we help governments cut costs and deliver better procurement, get in touch.

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