The regulations surrounding buying by governments and public bodies in the EU can provide opportunities to make big savings and secure good relationships with suppliers, according to procurement experts Efficio.
In the latest Efficio Viewpoint article Driving savings in a restrictive OJEU environment Principal Dappula Wijeyeratne says that on the face of it the regulations appear to go against the basic principles of good procurement – “good healthy debate, fact-based negotiations, rounds of discussions focused on an ever-decreasing price...the very heart of a competitive event.”
But he says if the right approach is taken the results can be extremely positive and in many cases better than equivalent procurement projects in the private sector.
Wijeyeratne outlines a series of steps that should be taken to deliver successful procurement outcomes within the OJEU (Official Journal of the European Union) rules.
These include carrying out a detailed profile of the goods or services being bought, engaging with potential suppliers before a tender is issued and making sure the scoring criteria for awarding the contract are right.
Wijeyeratne says: “Experience shows that even a poorly-run OJEU tender can generate savings simply through the effect of a competitive process. However, a well-run process, fully leveraging stakeholder engagement and early supplier input and challenging current specifications and service levels, can deliver fantastic savings.”
He says in a recent project in a fully-regulated OJEU environment Efficio achieved savings of more than 40 per cent on telecoms call and line rentals, 30 per cent on branded fleet parts and 20 per cent on office cleaning.
And beyond the financial savings, he says, a successful project promotes engagement between procurement and stakeholders, helping stakeholders understand the value of a capable procurement function and the benefit that a challenging, commercially astute party can bring to the deal.
Wijeyeratne concludes: “Issuing a tender in an OJEU environment should not be seen as a lever for driving savings. These are achieved by the sensible application of sourcing levers, the same as in the private sector.
“However, understanding the regulations will help you ensure that early stakeholder engagement, supplier interaction and challenging the status quo occurs early and in advance of the tender being launched.
“In many areas we have seen a successful OJEU-compliant tender deliver better results than we have seen in equivalent private sector clients, as the regulations force procurement to think much more creatively, thoroughly and a great deal in advance of the sourcing event taking place.”