The advent of digitisation continues to alter the traditional processes for government, businesses, economies and society. It has led to a constant rethinking of the modus operandi of every sector and primarily the societal activities to maintain relevance in all climes. Digital technology is an anchor to achieving government goals; hence, the need to invest heavily in digital infrastructure and services.
According to Digital Impact Alliance, such an investment has skyrocketed since countries believe in enhancing their public presence with their services and gear towards actualising their national digital transformation agendas. It is the fundamental motive for the advent of Public Sector Digital Procurement, which has further heightened after the 2020 COVID-19 pandemic.
According to Humanitarian Global, public procurement is acquiring products and services by government departments or agencies. This process cuts across federal, state, and local tiers of government, and it proffers a guide on the procedure of such purchases. It is a necessity that government ensures an effective and efficient public procurement, for the funds at their disposal are sourced from taxpayers. Hence, they must ensure the purchase of quality products and a high standard of service delivery.
Procurement is similar to purchasing, and both words can be used interchangeably; however, they have slight differences. The endpoint of both processes leads to acquiring a product or service; however, the intricacies involved in each process differ. While purchasing is reactive and focuses on data for decision-making, procurement is proactive and follows the different stages involved to meet needs and build relationships for future reference.
The intricacies of procurement cycles around three Ps: People, Process and Paperwork. People make decisions, provide financial and legal advice, and manage the process of achieving a successful public procurement. The process involves the stages procurement personnel must go through to complete a given procurement. The paperwork involves every necessary document required for effective spending reports for future reference. While it is quickly becoming obsolete owing to human error and the hassle of gathering so many papers, automation is globally replacing it. These three Ps are relevant and indispensable in the procurement process.
Stages of Public Procurement
-
Planning
The first stage of public procurement is planning. In this stage, the personnel identifies a need that requires to be met. A proper examination is carried out to ensure the identified need is indeed a need and does not readily have an available alternative. Afterwards, adequate planning is put in motion to acquire the required item or service.
-
Need Definition
The second stage in the procurement cycle is defining the need/requirement. This involves proper documentation of the item/service. It must be properly done because it impacts the vendor’s interpretation, and if wrongly interpreted, the organisation/government could run at a loss.
-
Sourcing
After identifying the need, making plans for its acquisition, and documenting a proper definition, the next stage is sourcing. This is the stage where contractors will review the documents and develop a quotation for the procurement of the item/service. The factors that determine which contractor is accepted are quality, time, and cost.
-
Evaluation and Selection
Having received proposals from different contractors or vendors for the required need, this is the phase where the professional procurement personnel evaluate the proposals and chooses the most suitable. This process is synonymous with employee recruitment.
-
Contract Award
After rigorous evaluation of the proposals and decision-making for a choice, the next phase is contract award. At this point, the parties involved will sign the final agreement, and the procurement will take effect.
-
Contract Management
This is the last stage of the procurement cycle. In this stage, professional procurement personnel will ensure a smooth delivery process. It becomes difficult to manage if proper care is not taken in all the previous stages. However, if it were diligently done, time efficiency and quality of delivery would be the result.
Regulations in the Public Sector Digital Procurement
According to Mark Ellis, the UK economy has been estimated to grow by 232 billion Pounds over the next two decades if there is a consistent investment in digital technologies, leaving a benchmark growth rate of 6.6% by 2040. The Covid-19 pandemic induced rapid growth in the automation of operations across the different parastatal of global government, and public sector procurement is inclusive in the digital transformation. The European Union is vested in rethinking this process; the core aim is to simplify public procurement.
One of the benefits of digital procurement is that it allows for data integration across regions and departments. It heavily cuts down paperwork and the movement of files, as all documentation from procurement planning to contract management is done in digital software. The digital tools will enhance the quality of public procurement by increasing transparency, evidence-oriented spending, market condition integration, and optimising and streamlining the entire process. It will further increase efficiency, provide data for cost analytics, reduce human error and unnecessary risk to the barest, and optimise strategy by aligning them to a nation’s priorities.
Regulations in the public sector digital procurement have been put in place to tackle problems that border around the use of public funds. According to Davidson Aminu, the policy benefits many countries in dealing with budget implementation, service delivery, and economic and social development. In 2020, the United Nations set out four basic principles and one essential notion in the United Nations Procurement Manual to guide its staff in procurement activities. It includes:
1. Best Value for Money
2. Fairness, Integrity, and Transparency
3. Effective International Competition
4. The Interest of the UN
And the critical notion:
5. Client Centricity
These principles ensure the best practices of procurement professionals since public funds are at their disposal and must be well managed to increase public confidence.
What is the Nigerian position?
After he assumed office in 1999, President Olusegun Obasanjo identified the degeneration of the Public Service Rules, Financial Regulations, and Ethics and Norms of the Service in conducting government business. To alleviate this problem, his administration commissioned the World Bank in collaboration with some notable Nigerian Private Sector Specialists to revamp the process and ensure an increase in efficiency, transparency, integrity, and accountability in Government procurement and Financial Management systems. The primary aim of public procurement policy is to promote good governance.
While the question of whether the regulations have achieved the aim after 23 years of democracy cannot be ruled out since many Nigerians are still deep in abject poverty attributable to a deficiency in public procurement, the public spending system is not as bad as it was in the past. Howbeit, the automation of the public procurement process will further optimise the consistency of the practice with international public procurement standards.
Barriers in Public Sector Digital Procurement: A Case of the Nigerian Government
Digitisation has made its way into the mainstream global public procurement with many benefits to spending public funds and acquiring quality infrastructure at an efficient price. Nations like the UK sing about its amazing wonders and are already projecting the growth rate they would experience if they remain consistent with their investment in digital procurement. Sadly, we do not have the same testimony in Nigeria as we face several hurdles hindering us from embracing full-fledged automation of our processes, including public procurement. Here are some of the barriers keeping us from enjoying the wonders of public digital procurement.
-
Resistance to Change Management
Designing a new system with the potential to provide efficiency to an organisation’s procurement process is a walk in the park compared to the implementation, which is owing to stakeholders’ resistance. According to Zycus, about 70% of the initiatives of an organisation fail globally. The fear of embracing change tends to make employees—in resistance—believe there is no need to alter how they do things. Change management in procurement demands time, commitment to the adaptation of automated systems, and a user-friendly environment, to mention a few; sadly, they are common barriers to change management resistance.
-
Skills Gap in Procurement
Talent recruitment continues to be a major concern in the procurement mainstream owing to a lack of competence. Every organisation needs top players in their team for optimal execution. However, as affirmed by Mercy Harper, many firms continue to struggle in scouting talents externally and training their in-house talents to bring them up to beat. One of the major blockades to the core acquisition of skills in procurement is the impression by many employees that procurement gives them the leverage to access other career opportunities—as in a stepping stone.
-
High Cost of Investment in Digital Procurement Infrastructure
Digital procurement technologies and tools are expensive, and the poor state of Nigeria’s economy cannot afford such an investment. Although taking loans to solve this problem would have been a viable suggestion, sadly, the country is already in outstanding debt to consider that an option. Howbeit, the government needs to take some drastic measures to redeem the current poor state of our internet and ICT infrastructure.
-
Epileptic Power Supply
Nothing can function without power, and the issue of power generation is as old as the nation. Digitisation requires electricity, and if Nigeria must automate public procurement, it must fix the power problem first.
-
Corruption in the System
The awareness that automating the public procurement process will curb corruption brings fear to corrupt officials in government; hence, they use their power to stall the process. Davidson Aminu affirms that Public Procurement Corruption is a cankerworm that government must fight if the policy’s objectives are to be achieved. If the Nigerian government can deal with procurement corruption, public digital procurement will be a reality in the daily affairs of the government.
In conclusion, policies aid a better public procurement practice; however, automation makes the process seamless and optimised. It is possible! The developed nations are enjoying their dividends. Nigeria can speak of a similar experience if the government can learn from them and tailor the lessons to revamp our systems and make room for full-fledged automation of our public procurement processes.
Written by:
Charles Kogolo
Consultant
