Procurement for the people
On the first of October 2019, New Zealand’s 4th Edition of Government Procurement Rules was introduced. The update intends to align procurement processes with the Wellbeing Budget. This is the Government’s plan to recognize how the economy is working for individuals, rather than simply focussing on how to protect capital and push GDP growth.
The changes in the rules are intended to improve social, environmental, economic and cultural outcomes for citizens. John Ivil, General Manager of New Zealand Procurement and Property, gave the following example “We have seen government agencies start to transition to low emission vehicles to travel while doing their business; explore car shares or use more flexible car rental arrangements. Contracting and procurement decisions like this support the goal for New Zealand to transition to a net-zero emissions economy by 2050”. This demonstrates the importance of controlling technocratic processes in the execution of government-wide policies.
The update highlights two things. First, the New Zealand Government’s and the Civil Service’s commitment to improving processes that may not be glamorous, but are key to good governance. The second is the benefit of functional leadership in procurement. While a government could mandate these reforms from the centre and expect ministries to comply, it’s almost impossible to police without a body possessing specific, central oversight. That oversight allows ministries to draw on the central body’s expertise, which makes it easier for them to deliver the outcomes set by the central body.
This all follows the International Civil Service Effectiveness (InCiSE) Index’s release earlier this year, where New Zealand came second overall (behind the UK) and top of the procurement category. The report cites excellence in e-procurement, the central purchasing body and the involvement of SMEs as reasons for the procureaucratic* victory. However, an effective central purchasing body should always be developing SME involvement and e-procurement systems. Therefore, credit must ultimately rest with the Government Procurement Function. Demonstrating, once again, exactly how important this is as a central function.
Ultimately, New Zealand’s success with procurement is leading to better outcomes for its citizens. In the background, money is being saved; and in the foreground, the government is doing more than ever to improve the quality of life for its citizens. Meanwhile, both of these things are being made easier by the quiet but vital work of the country’s procurement function.
At FMA, we know that only 10% of the challenge of government is deciding what to do; 90% is making it happen. We work with our clients to implement and deliver meaningful and sustainable change.
*A ‘procureacrat’ is a bureaucrat who is overly concerned with adhering to the processes related to procurement, rather than achieving the best commercial outcomes.