Joe Biden’s exhortation to ‘build back better’, which has also been used by Boris Johnson, is broadly equivalent to the more arch comment that Winston Churchill made during the war: “never let a good crisis go to waste.”
Governments looking to reinvigorate their economies should consider their procurement spend as one of their critical tools. Governments typically spend around 12% of GDP in public contracting, a vast amount of spend that is directly in their control.
To drive growth, governments should be making sure that as many contracts as possible go to firms that can create jobs, rather than firms that will just absorb the spend without growing.
Downturns create entrepreneurs, many of which start up after being laid off from their employer, but new companies are anathema to Government, considered to be too risky to trade with they are often excluded because of their lack of financial history.
Those without experience find bidding too complex and burdensome, whilst others struggle to get these companies into the government supply chain.
However, young companies are our primary source of innovation and have the greatest potential for growth; the pandemic has shown that contracts worth millions for critical equipment can go to small, new companies when government wants it to happen.
We just need to recalibrate the priorities for government procurement, so that we can genuinely build back better.
This means reappraising how they attract suppliers when letting contracts. Every avenue should be explored; reducing the complexity of bids, increasing the number of lots, targeting companies with growth potential, allowing for quick and easy access to framework agreements and partnering with innovative companies.
So pay close attention to who wins new contracts in the future, it could well be a measure of how determined a government is to build back better, or instead to just to settle back into the usual way of working.
We can help governments to measure the success of their procurement regimes, from economic growth to savings and beyond, if you’d like to know more about our procurement data services, please get in touch.