More flexible policies on public procurements

More flexible policies and smart purchases would improve the quality of public procurements and save money. Simultaneously, they would place Finland at the top of the world in innovative public services.

According to estimates, approximately 30 billion euros is spent on public procurements in Finland every year. By making smarter purchases, we get more for our money and save in public costs without having to make cuts. We can do more with less.

What's wrong with the current state of things?

The procurement legislation aims to increase competition and thus produce savings in public economy that are realised as improved quality and lower prices. However, the bundle of bureaucracy hiding behind the noble goals usually only leads to agony.

Interaction between different parties is often non-existent

Orderers feel that the process is much too complicated, and meticulous restrictions make smart buying difficult. Companies complain about the lack of buying knowledge and the expensive bureaucracy of procurement processes. This is why many small companies in particular have ruled public customers out of their sales completely. Companies also dislike the fact that quality and responsibility are not usually an advantage in competition: much too often, the winning factor is the price.

Interaction between different parties is non-existent in several procurements. One buys something unknown in the shadows, trying to guess what the customer wants.

The new procurement act may make procurements more flexible

The most important goals of European Union's new procurement directive are:

  • making procurements simpler and more flexible
  • cutting down on bureaucracy
  • improving the status of small and medium-sized enterprises
  • emphasising quality

A welcome improvement is the emphasis on quality in procurements. The lowest price as the main criterion in the bidding competition is losing its significance. An essential part of quality evaluation is evaluating the life span of the procurements and taking environmental, employment-related, and social goals into account in the procurements. These goals must be adopted for buying so that they promote better quality and saved costs in practise as well. They must also not lead to even heavier bureaucracy and a tighter straitjacket. This would leave more and more companies outside public procurements.

Quality evaluation is an entity that requires good competences on purchases as well as markets and suppliers – new detailed legislation is not the way towards happiness. Functional quality evaluation also requires good interaction with suppliers.

Innovation partnership enabling growth

Innovation partnership is hoped to increase the innovativeness of public procurements. For the public sector, an innovation procurement can give completely new opportunities to be at the top of development of public services and do more with fewer and fewer resources. Innovative procurements can have a significant role in giving a company the first reference for future marketing of a product.

Let's utilise the chance to make smart buying easier

The reforming Procurement Act has a real chance to create a working framework for smart procurements. However, it requires the common thread of the new act to be simple and flexible procedures. We cannot increase bureaucracy anymore – it would damage everyone.

However, just changing the law won't be enough. The whole attitude environment should be reformed from procedure- and form-orientedness to something with the focus in the contents. This requires mutual trust between the parties of the procurement. Improving trust would help the use of more sensible procurement conditions and reduce unnecessary and heavy complaint cycles.

Further information:

Veli Sinda, Advisor, +358 45 111 6541, firstname.lastname@techind.fi