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New Zealand’s unique procurement approach paves way for globally inspired improvements

Andy Cochrane, Director of Enabling Services at NZGPP, recently returned from an OECD assignment with a raft of valuable learnings in procurement practice. He was able to appreciate the benefits of New Zealand’s unique approach, while seeing opportunities for improvements from international practices.

On arriving at the OECD Andy quickly realised there is no one-size-fits-all model applicable to all countries - contextual issues such as a country’s politics, legislation, corruption levels and government priorities, present complexities preventing this.  Naturally he was interested to understand where New Zealand stood on the world stage with regards to procurement practice – where were we leaders?

In answer he discovered an important aspect of procurement practice unique to New Zealand – we are the only country in the OECD that doesn’t have procurement laws.

While strategic procurement, which incorporates consideration of social and environmental issues, is prescribed in law across all other OECD countries, New Zealand’s framework consists of principles, rules and guidance which bring benefits of flexibility and creativity in approach.

“By providing capability-enhancing tools, rather than forcing compliance with procurement laws, agencies and businesses in New Zealand are empowered to develop unique procurement solutions that procurers in other jurisdictions would be more reluctant to undertake,” says Andy.

Within this context, Andy also discovered a number of opportunities to develop and strengthen procurement in New Zealand. These include incorporating broader outcomes, e-procurement, transparency and open data.

Anecdotally, cost is currently the main focus in New Zealand procurement practice. By widening this perspective, he sees ways government can have increased positive impact.

“If we start to assess tenders on aspects other than cost and value, we widen our focus to other areas - for example, sustainable goods and services, as well as ‘whole-of-life’ cost such as energy and running costs,” says Andy.

Andy consolidated some key learnings from projects he was involved in overseas that highlight the value of e-procurement – one was a case study on ‘Productivity in public procurement in Finland.’

“In Finland digitalisation is providing a great opportunity to enhance productivity, making the procurement process easier and more streamlined for businesses and agencies. This points to the creation of a suite of e-procurement tools as a valuable opportunity to support New Zealand in the same way,” says Andy.

As a result Andy and the team have started working on an e-procurement strategy to streamline and digitise procurement processes in New Zealand. Key objectives include:

  • Helping increase efficiency and effectiveness for agencies.
  • Helping ensure processes are efficient and low-cost for businesses, and enable businesses to access opportunities.
  • Support collection of meaningful data to monitor the impact of procurement, and provide transparency to the public and to other stakeholders.
  • Helping agencies assess tenders against various criteria, pertinent to implementing their strategic procurement.
  • Currently the process in New Zealand can be a mix of both paper-based and digital steps. The aim is to give agencies an end-to-end digital process. This won’t be mandatory, but a range of opt-in modules to enable better work flow.

Regarding improvements to transparency, New Zealand is already committed to the Open Government Partnership which is an international champion for government accountability through transparency. A core focus of this is open data with respect to government procurement.

“The aim is to use appropriate, non-sensitive information collected through our systems to demonstrate transparency to taxpayers in decision-making and use of government funds - I see developments in procurement practice, specifically e-procurement, as able to assist in this transition,” says Andy.