Operating in the public sector can be very rewarding, but it can also be very challenging.
It’s governed by strict rules, a plethora of public contracts regulations, and a brand new Public Procurement Bill. Buyers must operate within these confines by clever use of tender, supplier, and contract management.
This article looks at public sector procurement from the buyer’s perspective and how software and technology, including Delta eSourcing’s services for public bodies, can enhance eProcurement in a competitive environment.
Let’s start with …
Contract Optimisation
After awarding tenders, contract optimisation is probably the most important step in the procurement process.
In a nutshell, contract optimisation involves adjusting central and local government contracts to reduce risk and increase value for both parties. Adjustments can be made to the content itself (terms, conditions, clauses, etc.) and the contract management process.
3 Steps to Contract Optimisation
This is a simplification of the contract process but contract optimisation is typically a 3-step process.
Step 1
Stakeholder engagement to ensure that all parties are on the same page regarding terms, accountability, problem resolution, and termination of contract.
Step 2
Contract negotiation includes dialogue to ensure the contract provides equal treatment to both parties. The public procurement policy requires non-discrimination in the contract evaluation process to ensure it is fair, mutually beneficial and complies with procurement rules.
Step 3
Ongoing contract management. This has many benefits for contracting authorities, but one of the biggest is to analyse existing contracts to create a template. The standardisation makes future public contracts much easier to negotiate and manage.
Delta eSourcing And Contract Management In Public Procurement
Delta eSourcing provides a comprehensive contract management software system that helps buyers monitor, track, and analyse public contracts.
Furthermore, you can use the software to monitor supplier performance and keep track of each contract’s progress, for example, is it time to retender and publish a contract notice on our e-tendering portal?
The portal is, in essence, a one-stop-shop for all contract management functions from registering contract awards on a central hub to overseeing the whole contract lifecycle.
The benefits of contract optimisation
Contract optimisation and contract management software provide several benefits to public sector buyers. Here are three of the biggest benefits.
1) Cost saving: Optimisation streamlines the procurement process by cutting the time it takes to complete the lifecycle. Time is money, so the upshot is enhanced cost-efficiency.
The software ensures compliance with new procurement regulations and GDPR, so there are no infringement fines. It also ensures that you’re always aware of the contract’s status so you don’t miss new public contract opportunities.
2) Reduced risk: Automated contract management software, which helps optimise and standardise contracts, can reveal abnormalities in supplier information. This allows you to address the problem(s) with the supplier. If no solution can be found, the contracting authority can cease negotiations and consult their shortlist for a new supplier.
3) Relationship management: The fairness and transparency in contract optimisation and ongoing contract management enhance business relationships. Mutual trust develops, which can encourage collaboration and innovation. The resulting foundation facilitates market expansion and business growth.
Supplier Engagement
Supplier engagement is crucial in public procurement management. The level and tone of engagement can make or break the contract.
High levels of supplier engagement help to build buyer/supplier relationships and can facilitate supplier loyalty, which means they give their absolute best to fulfil the terms detailed in the contract notice.
Building supplier engagement
Each and every communication and interaction within the public sector shapes engagement.
Consistently positive interactions between the two parties are solid enough to weather a negative experience or two. However, they must be nipped in the bud before they become a habit. This ensures that government procurement buyers get back on track and don’t start to alienate their suppliers.
Consistently negative interactions, on the other hand, can’t be offset by a positive experience or two. The relationship will sour and it can lead to the early termination of public services contracts.
The associated penalties and fees are worth it, however, because a bad relationship costs a lot more money in the long run.
How To Create A Successful Supplier Engagement Strategy
There are several ways to optimise supplier engagement in public procurement.
1) Communication
Communication is the foundation upon which every contract rests. Poor communication will sink a project, and possibly create bad feelings between the contracting authority and suppliers.
Good communication keeps projects afloat. Good communication includes respect and a personable or conversational tone which helps to smooth out the procurement process.
2) Concise subject lines
Contracting authorities must provide clear email subject lines to tell suppliers exactly what is required. They should be so clear that it’s almost unnecessary to open the email.
At least, subject lines should encourage suppliers to open emails for details that better explain the topic in the subject line.
3) Quality data collection
Respectful communication can help with data collection. Suppliers are more likely to share data with public authorities who have already shown polite interest in their products, services, and works.
It helps if the contracting authority shows an understanding of potential obstacles. Suppliers are more likely to share data with public procurement buyers who have empathy for the inherent challenges in the industry and for their problems specifically.
4) Supplier knowledge base
Use a platform, like Delta’s e-tendering portal, as a library of resources that enable suppliers to easily find project-related information and documents containing public contracts regulations.
You can also include an FAQ section with important information about your business operations, including new rules and social value.
This way, government buyers don’t need to reply to multiple emails asking for clarification on this and that matter.
5) Communicate challenges
Suppliers aren’t the only ones who face challenges as the project progresses.
In the spirit of “Treat others as you would have them treat you,” government departments must communicate potential problems. There might be some innovative solutions that resolve the issue, but at the very least, you keep suppliers updated on your circumstances.
For example, there is a cash flow problem and you might have to delay a payment. This way the supplier doesn’t get frustrated by being kept in the dark, and your relationship doesn’t suffer.
6) Consider language and other barriers
If you have an international supplier pool, ensure you have removed language barriers. This could mean an interpreter for face-to-face meetings or translation software to avoid misunderstandings in written communication.
Other challenges to the process include cultural differences, different currency and tax laws, and time zones.
Research and good communication can reduce these risks.
Delta eSourcing and Supply Chain Management
Delta eSourcing’s supply chain management software enables contracting authorities to develop a supply engagement and management strategy that fosters relationship-building and collaboration within procurement rules.
Delta’s supplier software provides contracting authorities with the following procurement benefits:
1) A simplified buying process
2) Immediate access to real-time information
3) Supplier comparison
4) Streamlined procurement processes
5) Unlimited categories and supplier lists
6) Framework agreement management
Tender Management
Tender management holds public procurement together. Tender managers have a diverse role that includes working with different departments to create an appropriate list of potential suppliers, as well as communicating with them, monitoring compliance regulations, and tender evaluation.
Tender management systems
Tender management systems support tender managers in their diverse responsibilities. The software automates some of the time-consuming tasks and tasks prone to human error. This frees employees to concentrate on their core activities and reduces human error for more accurate reporting and data management.
Essentially, tender management software improves efficiency along the procurement lifecycle and enables tender managers to monitor the whole cycle from pre-tender planning through the selection stage to post-tender evaluation. Not to mention bid preparation and evaluation, and tender responses.
Tender Management Benefits
Tender management and tender management software provide several benefits to public sector buyers.
1) Greater value for money
A tender manager working with tender management software can quickly and efficiently identify bidders that provide the best value for money (not necessarily the lowest price) and spot negotiation opportunities to further increase cost savings and value for money.
2) Supplier evaluation
Automated tender management functions can evaluate contract opportunities according to preset criteria. These could include tech specs, certification, location, and compliance with EU procurement directives and other procurement legislation.
3) Tender details
A challenge with manual tender management is that public contracts may be published without sufficient details. It could be challenging to fully understand what government departments require or the rules for certain thresholds.
Tender management software can ensure that all details are provided in contract notices, this is partly due to the standardisation of public procurement contracts or customisable procurement contract templates.
4) Risk management
Tender management technology and processes can identify suppliers with risk potential. If suppliers look promising despite the risk, public bodies can decide if they are willing to discuss risk resolution with them or simply focus on those who pose zero risk.
5) Post-bid evaluation
Public authorities are required to provide suppliers with feedback regarding their bids. Tender management systems can make this process much easier and quicker thanks to their data evaluation functions.
6) Analytics
Some tender management software has analytics functions that provide insight into contracting authorities’ tendering processes, especially regarding bid performance, success rates, patterns, and other key metrics and KPIs.
Public authorities can use the information to improve their procurement processes, which can lead to cost savings and greater use of automation functions, such as document generation, evaluation and approval, and notifications.
7) System integration
Tender management software integrates with existing software and procurement-related systems. Integration must be seamless and optimise efficiency, rather than throw up obstacles like increased downtime and system drag.
Delta eSourcing And Tender Management
Delta’s tender management system is designed to facilitate buyer/supplier communication to remove misunderstandings, clarify details, and improve overall procurement efficiency. The system is compliant with all public procurement regulations and relevant secondary legislation.
This means suppliers are assured of high-quality data security and protection.
One of the great features of the system is that it can be used with Delta’s Workspace Manager, which facilitates cross-department and cross-organisation collaborative workspaces to compete more effectively in the wider public sector.
Benefits specific to Delta eSourcing include:
1) A comprehensive evaluation tool that allows public procurement buyers to customise an evaluation plan, including flexible scoring and percentage weightings.
2) Tenderbox document exchange enables both parties to securely exchange tender-related documents including documents containing new legislation and regulations.
3) Fully customised online questionnaires. Contracting authorities can add or remove questions or sections as necessary to suit specific government contracts.
4) Access to a searchable activity log that records all activity by both parties, as well as joint buyer/supplier activity.
Other Critical Factors In Procurement Management
Several other factors come into play when it comes to managing the procurement process. We’ll take a quick look at a few below.
Procurement ethics
Procurement ethics are ethical practices designed to keep public sector procurement fair and processes transparent and ensure all parties act with integrity.
Local and central government authorities can meet ethical standards by following these tips:
1) Develop and adhere to a code of ethics that can be applied to everything from your legal framework to your cooperation agreement and other procurement services.
2) Train procurement staff to embrace ethical practices, especially in social value and public interest initiatives.
3) Communicate the code of ethics to suppliers to ensure they act with integrity in the approved competitive procedure.
4) Conduct regular audits to ensure that there are no ethical violations in your supply chain.
5) Discuss potential ethical code violations with suppliers to keep them on track.
6) Include your code of ethics in public contracts and stipulate your expectations from suppliers.
Collaborative procurement
Collaborative procurement is all about public procurement buyers and suppliers working together to improve procurement efficiency, save costs, add value, and increase transparency in the procurement process.
Collaboration drives innovation, improves buyer/supplier relationships, and fosters mutual respect and goodwill. It can even mitigate risks up and down the supply chain.
Collaboration doesn’t just happen, however.
It requires total supplier engagement, the right technology or procurement software (collaborative workspaces, like those provided by Delta eSourcing), a structured plan, and goals with timelines and KPIs.
Collaboration is not the right fit for some public procurement contracts, so don’t try to force it. That way lies ruined expectations and tarnished relationships.
Pick your collaborative partnerships carefully.
Transparency requirements
We’ve mentioned transparency a few times, but what is it, really?
It’s about making all procurement processes visible and available to all parties, including decisions, outcomes, and financial capabilities. It’s based on principles of truthfulness, openness, honesty, and accessibility and typically applies to social value, the selection stage, evaluation standards, contract awards, and performance reviews and feedback.
Transparency requirements are particularly important in the public sector because local and central government bodies are answerable to the general public who have the right to see how their taxes are being used.
Mastering Procurement With Delta eSourcing
Delta eSourcing provides a range of public procurement-related services and functions. Many services can be used together to create a comprehensive public sector procurement package, which is not only convenient, but is also cost-effective, efficient, and easy to manage.
Contact us to find out how it all fits together to ensure you get the exact services you need to be a successful buyer and attract the best suppliers in your field.
Book a free demo of our procurement services or get a free personalised demonstration of our new analytics system, Delta Market Analytics.
Our experience and expertise will help you take your procurement processes to the next level.
