How can the public sector take a more innovative approach to procurement?

 

Key insights

  • Innovative procurement means using innovative procurement methods with the goal of streamlining the purchasing process and making it more efficient.
  • The public sector in Belgium still does that too little, tending to cling to the traditional method.
  • Innovative procurement has two major benefits: saving costs and stimulating innovation.
  • Innovative procurement requires several basic conditions: (1) a supportive legal framework, (2) tolerance of risk-taking and failure, (3) greater involvement of the business community, (4) sharing knowledge, (5) concise, more open formulation of what exactly you want to procure, (6) giving spontaneous feedback to participating companies during the process, (7) adopting an attitude of transparency and openness.

The public sector makes use of public tenders to buy goods and services. However, these government contracts do not always apply an effective and uniform process, which leads to missed opportunities. On the one hand, the government is faced with the challenge of forcing its costs down further and further, allocating its budgets as efficiently as possible. Clearly, public tenders take a considerable bite out of their budget. On the other hand, the government could also use its procurement policy to contribute to catalysing innovation in Belgium, for example by involving more start-ups in government contracts. So it is high time to evaluate, renew and streamline the current processes. In the jargon, this is referred to as ‘innovative procurement’.

For his ongoing doctoral research at Vlerick Business School, Ben De Coninck has been studying the Belgian government’s position when it comes to innovative procurement. With the support of Professor Stijn Viaene and Professor Jan Leysen, he interviewed various Belgian stakeholders at federal, regional and local level and supplementing his findings with a round-table discussion and a study of the literature. The intention of this barometer is to encourage further collaboration between various institutions to arrive at a more efficient procurement process together. The research has been endorsed by Steven Vandeput, Federal Minister of Defence, in charge of the Civil Service.

What is innovative procurement?

To get everyone involved on the same wavelength, you need to start with a good definition. This is the reason for designing the ‘Procurement Matrix’, which presents (public) procurement in two dimensions:

1/ WHAT are you buying?

  • Standard solution: existing, traditional products or services that have proved their worth
  • Innovative solution: recently developed products or services that are new on the market and involve a higher risk to you as the purchaser
  • Research & Development: products and services that are still in the development phase and not yet ready to be put on the market (prototypes)

2/ HOW do you buy it?

  • Using existing methods of procurement: traditionally on paper, with an official signature
  • Using new methods of procurement: methods that ensure increased transparency and competition and a reduction in costs

Strictly speaking, innovative procurement means that you buy something in an innovative way. What you actually buy - and so how innovative that product or service is - is irrelevant here. In other words, innovative procurement is something completely different to innovation procurement, which means specifically going in search of innovative solutions, whether or not they are in the test phase.

Stumbling blocks

Interviews with stakeholders revealed that there are still a great many challenges facing those who want to create a genuinely innovative procurement policy in the Belgian public sector.

  1. A lack of innovative legislation that would allow more flexibility in the procedures followed
    It is also important here to adapt the legislation from the bottom up, to avoid over-regulation and allow as much responsibility as possible.
  2. A change of mentality that would put the customer in the centre of the procurement process
    This comes down to translating the needs of the final consumer to a suitable solution as successfully as possible. Too many administrative steps and rigid procedures obstruct this change of mentality. Setting up an innovative network to stimulate consultation and knowledge-sharing between the government and the business community might promote a different perspective.
  3. More involvement of SMEs and start-ups in public tenders
    The current e-platform used by the government is not flexible and user-friendly enough for them. There might also be a role here for federations such as Unizo or VOKA, to provide better support for SMEs and start-ups that participate in public tenders. Other options for making these tenders more attractive to them include giving feedback after the end of the procedure and using clear, concise descriptions of the solution sought.

Current initiatives in Belgium

What progress have we made with innovative public procurement in this country? Researcher Ben De Coninck has drawn up a list including several initiatives in Belgium.* He identified their position on the Procurement Matrix (what they procure and how). It shows that only a very limited number of government bodies are taking steps towards genuinely changing the procurement process; most adhere to the traditional procurement method. The second important conclusion is that there are still many opportunities to stimulate both the development and marketing of innovations. If the public sector is prepared to introduce far-reaching innovation in its procurement processes, that could give innovation in Belgium a serious boost. 

Want to read more? Download the research report 'Barometer Innovative Public Procurement in Belgium'.

* Digipolis, FPS Policy and Support – Directorate General of Digital Transformation, PIO – Programme for Innovative Government Contracts, e-Procurement Platform at the FPS Policy and Support, Flemish Department of Mobility and Public Works, Nido Innovation Lab, Redesign Process 1 by the federal government, V-ICT-OR

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