Welcome step-change in Government procurement

Writing in the immediate wake of the Defence Capability Plan release, NZDIA CEO Jennie Vickers argues that there is now opportunity for a real and palpable shift in procurement policy and practice across the public sector.

With three weeks to go before the end of the Government’s financial year, we had a big and exciting second week of June.

I said to a few people this week that I was maybe becoming tragic, being so excited about the release of the Defence Capability Plan 2019 (DCP). In my defence though, this DCP is of critical importance, not only to Defence but also to Industry and NZDIA.

The week before we also saw the publication of the 4th Edition of the Government Procurement Rules which take effect on 1 October 2019. I got very excited on that day too!

These two documents together represent the best chance in years for smaller New Zealand companies to engage on a more equal footing in Government procurements.

In my distant past career, I was a director of a cutting-edge technology business. Our greatest failing was being ahead of the tech adoption curve. The next (and a common challenge) was not having sufficient marketing budget to counter the overseas businesses peddling old technology to Government departments. Eventually we stopped responding to tenders because we could not compete against the fear-driven platitudes of the larger mainly overseas (competitors).

I tell this story because it remains the story of many innovative tech businesses in New Zealand, a story that others tell me on a regular basis.

NZDIA CEO, Jennie Vickers

The combination of the new 4th Edition and the DCP presents an opportunity for a real and palpable shift in procurement policy and practice across the public sector. That this shift is mandatory is clear in Government policy as seen in the Cabinet decision in December 2018 that sparked the review of procurement and the issue of new Rules.

Rules have been issued in the past with similar sentiments, but the expected sea-change never occurred. The cynics might say what is different now? To the cynics I say that sometimes we need a critical mass of influences to persuade procurers to change their attitudes, and we now have that critical mass.

Cabinet paper Enhancing the effectiveness of Government Procurement Policy; the new Government Procurement Rules including the concepts of ‘broader outcomes’ and ‘public value’; a DCP with a substantial focus on working with industry, early engagement and collaboration; and the launch of a two-year programme from the Office of the Auditor General into Government Procurement; appears to constitute a critical mass.

Industry now has the obligation and opportunity to call out poor procurement practices so that we get a better outcome for Government spend and for industry. Procurers have the best incentive now to re-frame their driving motivations before they have to explain them to others!

This is not intended to be a beat up on procurement people. The importance of the leadership of Government agencies and the messaging they send cannot be underestimated. If leaders continue to talk about cost savings, getting more for less and demanding more with no consequences, their diligent procurement people will continue to focus on the wrong things and broader outcomes will be a pipe dream.

Again, we all need to speak out if we see tenders or documentation that entrenches the old approaches. If speaking out seems too risky, then let NZDIA help.

Armed with and informed by the DCP, NZDIA is working on the final changes to a programme of events to support industry (New Zealand and offshore) and Defence in delivering outcomes that work for everyone. Having spent time in Australia with CASG and the Australian Department of Defence, I can attest that when industry and the public service learn together about how to achieve broader outcomes for all, change can happen and happen fast.

The NZDIA Newsletter is the best source of updated information on the events programme and support for Primes and SMEs wanting to work together. If you are not on the mailing list, contact admin.support@nzdia.co.nz and ask to be added.