This chapter describes the extent to which Adherents are developing a procurement workforce with the capacity to continually deliver value for money both efficiently and effectively. The analysis focuses on the current weaknesses in the procurement workforce’s lack of capability and capacity that are prohibiting effective public procurement systems. The chapter includes an assessment on the importance of procurement certification and professionalisation, and analyses the uptake of such certification amongst Adherents.
Reforming Public Procurement
2. Investing in the future: building skills and capabilities in public procurement
Abstract
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
The Recommendation calls on Adherents to “develop a procurement workforce with the capacity to continually deliver value for money efficiently and effectively” (Principle on capacity, paragraph IX). The Recommendation contains guiding principles to assist Adherents in meeting high professional standards of knowledge, practical implementation and integrity by providing a dedicated and regularly updated set of tools. Additionally, there is guidance on providing attractive, competitive and merit-based career options for procurement officials, and promoting collaborative approaches with knowledge centres to improve the skills and competencies of the procurement workforce.
The most prominent weakness in public procurement systems is the workforce’s lack of capability (defined as skills-based ability for an individual, group or organisation to meet obligations and objectives) and lack of capacity (defined as the ability to meet obligations and objectives based on existing administrative, financial, human, or infrastructure resources). Challenges for public procurement practitioners include the transition from an ordering function to a more strategic one; increasingly complex rules; the multidisciplinary nature of the profession; and the lack of professionalisation (OECD, 2017[1]).
A public procurement workforce with adequate capacity and capability is crucial for achieving the strategic objectives of government organisations. Professionals who possess a wide range of skills and competencies, including negotiation, project management and risk management skills, are necessary for successful delivery of strategic procurement initiatives (OECD, 2017[2]).
Moreover, the skills set required of procurement professionals needs to be flexible, as the contexts and priorities involved in their everyday work are constantly changing. Many procurement professionals work in roles that demand high-level strategic, tactical and operational skills. In OECD countries (Belgium, Canada, Korea and the United States), competencies are integrated into various activities to ensure alignment with the organisation’s needs. The activities can include recruitment and selection of staff, training and development, and succession and career planning (OECD, 2013[3]).
The Secretariat has developed a checklist to support implementation of the Recommendation. The checklist outlines steps that can be taken to build capacity, starting with strategy development, a competency framework, job profiles and certification. Having a unit or team that covers capacity development along with regular training is also helpful (OECD, 2016[4]).
2.1. Assessing capability to support future planning to improve public procurement systems
Undertaking an assessment of the procurement system using a methodology such as the Methodology for Assessing Procurement Systems (MAPS) can help to set the baseline and identify where there are gaps or misalignments between the strategic requirements of the system and skills (OECD, 2018[5]). The methodology’s main indicator framework focuses on the entire public procurement system, and thus provides a comprehensive picture of the system’s status and where to focus improvements. Indicator 8 specifically focuses on capacity and the system’s ability to develop and improve. In addition, a supplementary module is available to focus on aspects of professionalisation.
In recent years, Adherents have undertaken MAPS assessments in support of their reform activities: Norway, whose MAPS assessment in 2017 is currently informing the country’s ten-year reform agenda, and Chile. Chile had undertaken MAPS assessments in previous years, prior to the most recent assessment in 2017. Repeated MAPS assessments can be useful in determining ongoing progress: in both Norway and Chile, MAPS assessments resulted in recommendations to strengthen aspects of public procurement capacity.
The New Zealand Procurement Capability Index enables the collection of data from individuals carrying out the public procurement function, so that a body of knowledge can be built up over time. That knowledge can be used to shape overall procurement competency models and strategies in an effort to keep ahead of the changing needs of the public procurement profession in New Zealand (Box 2.1).
Box 2.1. Procurement Capability Index
The New Zealand Procurement Capability Index (PCI) is a self-assessment tool used by government agencies. That measures government agencies’ procurement capability. Covering the complete procurement cycle, it measures procurement capability across eleven categories:
strategic planning for commercial outcomes
procurement strategy alignment with agency key result areas
commercial leadership to drive outcomes
procurement function engagement with agency stakeholders
governance and organisation of the procurement function
alignment with policy and processes
sourcing and collaboration
supplier relationship management
management of people and skills development
knowledge and performance management
use of technology processes and tools.
The self-assessment is supported by a review and moderation process that includes peer review, external checks and supplier feedback to ensure that the results are relevant and accurate. The annual review provides a full picture of capability across all participating government agencies.
Responses to the 2018 Survey show that the most common types of workforce entry requirements adopted by Adherents were those that are designed according to each contracting authority’s needs. Entry requirements linked to a competency model and compulsory public procurement training were equally the next most chosen responses, and a smaller number chose through a certification process for public procurement officials. As shown by Figure 2.1, some respondents (30%) have other measures in place to ensure adequate capacity of the procurement workforce, such as non-obligatory training and standard public service entry requirements. However, among the 2018 Survey respondents the percentage that have entry requirements linked to a competency model or certification of the workforce just 30% and 21%, respectively. The baseline assessment of capability and identification of gaps are difficult to assess without tools such as competency models, and only 30% of the 2018 Survey respondents have them as entry criteria.
2.2. The impact of capacity and capability on public procurement governance and funding models
Public procurement governance can play a key role in enabling the appropriate skill level to be supported where it is most needed. Centralised models will often have a CPB that drives aggregated purchasing, sometimes through the use of framework agreements. CPBs have a number of advantages and are used widely among respondents. There can be tension, however, between the needs of decentralised public procurement entities and centralised entities. One area where this is especially evident is in the funding arrangements applied to CPBs. The arrangements for funding generally fall into one of three different types:
Contracting authorities pay a fee when call-offs are made.
Fees are paid by economic operators when they invoice through framework agreements.
Funding is provided directly by governments.
When setting up CPBs, it is important to be clear about their role and the scope of their operations. In general, the more complex public procurement projects will likely benefit from the involvement of experienced public procurement professionals who possess a range of skills suited to the task at hand. It naturally follows that the funding model needs to support the ability of the system to attract these individuals to where they are needed most. As with any organisational development challenge, having a centralised function that can direct the funding where it is needed the most will assist in achieving this objective.
In Finland for example, the centralised purchasing body Hansel is funded through service fees paid by suppliers based on the value of purchases made through framework agreements. The service fee is limited to 1.5% of the contract value. Although Hansel is a not-for-profit organisation, its revenue, along with revenue generated through the provision of other services, goes towards covering the cost of Hansel operations. Any additional revenue can be returned to government shareholders as a dividend or reinvested into Hansel as cash equity (OECD, 2019[8]).
2.3. Using the right strategies, tools and guidelines to support public procurement capability and capacity development
To support a professional public procurement workforce, specific measures need to be taken depending on factors such as the threshold level of capability and capacity of the existing workforce. An efficient system usually includes:
1. procurement rules and procedures that are simple and clear, along with ensured access to procurement opportunities
2. effective institutions to conduct procurement plans and procedures and produce, manage and monitor public contracts
3. appropriate electronic tools
4. suitable human resources in terms of numbers and skills to plan and carry out procurement processes
5. competent contract management (OECD, 2016[9]).
The development of strategies to address any gaps in capability will lay the foundations for a successful, efficient system. The OECD Secretariat has created a checklist to support implementation of the Recommendation that can be used for developing strategies (OECD, 2016[4]).
For example, the OECD worked with Bulgaria on a project to define training gaps, conceptualise a training plan, and present a proposal that includes training materials and a curriculum for a training plan to enhance capacity in certain areas of the public procurement process (OECD, 2016[9]).
In the 2018 Survey, Canada outlined the governance strategy and initiatives it has in place to develop capacity among procurement professionals. The Comptroller General of Canada is responsible for ensuring that the government’s procurement community has the skills and knowledge to support individual government programmes. Periodic departmental assessments are carried out and departments are required to demonstrate how they are supporting procurement capacity within their department (OECD, 2018[7]).
The OECD worked jointly with the Slovak Republic to assist in the development of a training action plan to support a strategy of improving procurement performance. It built upon the OECD framework for designing a training strategy and defining the corresponding action plan. A questionnaire was developed allowing for a structured assessment of the existing training offering, its content and structure, and presented both the trainers’ and trainees’ perspective. A detailed action plan was developed to define delivery modes that included induction pack, distance learning or e-learning, mentoring/coaching and support programmes for degree-level study (OECD, 2017[10]).
2.4. Using competency models to assess baselines capability levels and address needs
The competencies required by public procurement professionals and organisations are defined according to the context of the jurisdiction where the function resides. Additionally, the context can be dynamic and the competencies may change in a fluid fashion. In many jurisdictions, the focus is on building wider commercial skills and competencies as opposed to solely operational procurement skills. This reflects the growing influence of procurement and the growing strategic role it plays in broader outcomes for governments in areas such as innovation, environment and social initiatives.
In the area of capacity building, the EC supports many initiatives in Member States through various channels such as the Structural Reforms Support Programme, and through promoting the transfer of good practices, notably through the TAIEX (Technical Assistance and Information Exchange Instrument) Peer to Peer exchange programme. The EC is also developing a European competency framework for public procurement, which aims to support professionalisation policies at national level so that buyers have the necessary skills, knowledge and integrity, and to address the training needs and career management of public procurement practitioners.
The United Kingdom supports an approach of developing and growing commercial skills across the whole public sector. The country’s Commercial Skills and Competency Framework for Developing and Practitioner Levels can be used by departments to ensure that minimum levels of commercial competency are maintained. The framework sets out the current skills, behaviours and competencies (e.g. judgement and confidence) that Civil Service personnel, and in particular those undertaking procurement activities, should demonstrate in performing professional procurement and commercial roles.
The framework covers three key components of the commercial cycle that are generally applicable to all government departments – Pre-market, Sourcing and Contract and Supplier Management. It also incorporates two levels of integrated commercial skills – developing and practitioner. The framework is designed to be used flexibly by departments to assist in the design of job descriptions as part of recruitment processes, and to assess the performance of staff within the appraisal process (Mackie and Langley, 2015[11]).
In 2018 Scotland (United Kingdom) completed the development of a new procurement competency framework based on a self-assessment of skills to identify relevant training and development needs for procurement personnel (Box 2.2).
Box 2.2. The National Procurement Development Framework in Scotland (United Kingdom)
The National Procurement Development Framework in Scotland is aligned with the Chartered Institute of Procurement and Supply (CIPS) global standards and allows procurement personnel to self-assess their skills, identify relevant training and development needs, and plan their career and personal development. The self-assessment can be carried out in two ways, either simple or tailored. The tailored self-assessment allows the user to create a custom fitted profile to score against which also identifies areas for development. In the simple version the self-assessment uses scoring against a standardised role profile to identify areas for development.
Source: (Scottish Government, 2018[12]).
2.5. Training to support the increasingly strategic nature of public procurement
Procurement professionals need to meet high professional standards for knowledge, practical implementation and integrity, and have access to a dedicated and regularly updated set of tools (Principle on capacity, paragraph IX, i). As procurement grows in complexity, it is increasingly obvious that it is not a purely administrative function but is a strategic function in the public service. It is a multi-disciplinary profession that requires knowledge of law, economics, public administration, accounting, management and marketing (among other things). The shift to strategic procurement has seen a growing requirement for these diverse skill sets and experience (OECD, 2017[13]).
In the 2018 Survey, respondents outlined that they carry out training on the job, education courses, conferences and thematic training. Highlighting the multidisciplinary nature of the procurement workforce, there are not only core procurement subjects like sourcing and contract management, but also a variety of different topics covered in Adherents’ procurement training. Training now also covers areas such as the procurement of innovation, Green procurement, and the participation of SMEs (OECD, 2018[7]).
Training that identifies and utilises methods that work in the local context has a greater chance of success. In Bulgaria, the OECD developed training of trainers programmes, not only to provide future trainers with an in-depth understanding of procurement techniques, but also to develop a platform for dialogue that supports the design of training materials (OECD, 2016[9]). The programme consists of workshops to train local experts in the field of public procurement in training skills and use of appropriate training techniques (visual presentations, interactive training methods, case studies, etc.). In Mexico, the OECD has also conducted capacity building for trainers and developed training manuals on fighting bid rigging in public procurement (covering training methods, role-playing and hypothetical exercises, exam questions, etc.) (OECD, 2018[14]; 2018[15]).
In Canada, the federal public service recognises procurement as a knowledge-based profession with an emphasis on a strategic advisory role. All employees identified as procurement professionals are required to follow a training curriculum as outlined in a government directive (Box 2.3). The curriculum in Canada is determined by the Comptroller General, who is accountable for the federal government’s procurement capacity (OECD, 2018[7]).
Box 2.3. The public procurement curriculum in Canada
The curriculum in Canada consists of five courses:
Who We Work For (C218) – This course builds a foundational understanding of how Canada’s non-partisan federal public serves the democratically elected government of the day
Legal and Policy Environment for Procurement Material Management and Real Property (M714) – This course provides an overview of the acts, regulations and policies, directives, national and international trade agreements and other instruments related to the procurement, material management and real property communities
Introduction to Procurement (M718) – This introductory course addresses basic responsibilities through all phases of the procurement process
Overview of Material Management (C233) – This course provides an overview of material management within the federal government context
Overview of Real Property Management (C234) – This course provides an overview of real property management within the federal government context
The curriculum is periodically updated to reflect new or changing requirements. For example, a current update reflects newly defined technical government procurement competencies.
Source: (OECD, 2018[7]).
Adherents are utilising the many different kinds of capacity and capability building mechanisms available to them in order to attract and retain motivated and skilled individuals (OECD, 2018[7]).
2.6. Recognising the professionalisation of public procurement with certification
As public procurement procedures become more complex and strategic, the greater will be the need for public procurement to be recognised as a separate function or profession. Acknowledgement of professional status can take many forms, such as specific diplomas, certifications or outcome-based incentives (OECD, 2017[10]).
Some certification programmes, such as the one in place in Canada (Box 2.4), provide procurement officials with formal recognition of their profession and are linked to the development of a competency model.
Box 2.4. The Canadian Certification Programme for the Federal Government Procurement and Materiel Management Communities
Launched in Canada in 2006, this programme received national and international recognition as the federal government’s first-ever certification programme for procurement and materiel management specialists.
What binds together the procurement and material management communities is their responsibility for the life cycle management of assets, from assessment and planning of requirements throughout acquisition until disposal. As a consequence of this shared responsibility, the communities have many common competencies, learning goals and knowledge requirements. Certification provides increased professional recognition for the communities and offers a professional designation to formally acknowledge a practitioner’s level of achievement.
The Certification Programme is designed to evaluate a candidate’s experience and knowledge in the federal government context, thereby distinguishing it from designations from external certifying bodies. In addition to developing technically proficient communities, the programme also focuses on ensuring capacity in leadership competencies.
Source: (OECD, 2016[16]).
Adherents such as the United States and Mexico have certification programmes to recognise procurement as a professional discipline within the public sector.
The American Purchasing Society (APS) is a professional association of buyers and purchasing managers. It was the first organisation to establish a nationally recognised certification for buyers and purchasing professionals. APS offers three different certification programmes:
the Certified Purchasing Professionals Programme, directed at professionals who have demonstrated the skills to successfully implement improved purchasing and supply chain practices as part of a business solution in an organisation
the Certified Professional Purchasing Manager Programme, aimed at those in managerial positions and who have managerial experience
the Certified Professional Purchasing Consultant Programme, aimed at certified purchasing professionals who either consult or teach purchasing to people outside of own employer (OECD, 2018[7]).
In Mexico the Federal Electricity Commission (Comisión Federal de Electricidad – CFE in Spanish) certifies its “buyer agents” (agente comprador). Agent buyers receive training in areas such as buying and free trade agreements that Mexico has signed. Two exams must be approved with at least 80% of credits to obtain a clave (or key) to qualify as a certified buyer agent (OECD, 2018[7]).
2.7. Professionalisation of the procurement workforce to address both capability and capacity constraints
The quality of the outcomes from public procurement depends to a great extent on the competencies of the individuals responsible for delivering the elements of procurement processes. The people who carry out all of the many tasks required and make the crucial day-to-day decisions make the difference between effective and efficient procurements and wasteful ones. Public procurement is being increasingly recognised as a profession in and of itself. There are several international sources of guidance to define and promote what constitutes a professional public procurer (OECD, 2018[5]).
Professionalisation of the procurement workforce will help to attract new people and also retain existing personnel, thus addressing capacity gaps. Building a specific cadre and career path requires more than initial training or even continuous education. It can also require legal measures to be adopted to reinforce the continuity of the career path with specific rights, such as progressive development, specific protection against hierarchical pressure, special financial incentives and comfortable salaries, as well as specific obligations in respect of ethics, prevention of conflicts of interest, years of service, and a mandatory cooling off period in the case of departure to the private sector or retirement. Enactment of such legal provisions could help ensure the continuity of procurement jobs (OECD, 2016[17]).
As mentioned earlier, OECD MAPS (MAPS Stakeholder group, 2018[18]) includes an indicator regarding a public procurement system’s ability to “develop and improve” (Indicator 8). This indicator includes references to a system’s ability to provide training, advice and assistance with regard to public procurement. It also includes a sub-indicator that calls for procurement to be considered a profession. The sub-indicator includes assessment criteria that require a country to have:
recognition of procurement as a specialised function as described by a diversified competency framework
competitive appointments and promotions
evaluation of staff performance and adequate promotion.
One of the six supplementary MAPS modules (currently under development) provides indicators on professionalisation of public procurement. These indicators provide a benchmark of what a comprehensive approach to professionalising public procurement should entail. Concrete measures must be put in place to support these overarching concepts (OECD, 2018[5]).
The body responsible for the public sector in New Zealand, the State Services Commission, has recognised the central purchasing body as a public service profession. Additionally, a series of key initiatives are being progressed to professionalise and empower the public procurement workforce in New Zealand (Box 2.5).
Box 2.5. Key initiatives for the professionalisation and empowerment of the public procurement workforce in New Zealand
1. Develop a model to assess the capability of procurement in agencies.
2. Assess agency procurement capability on-site and provide action plans for development.
3. Have agencies not targeted for on-site assessment complete a self-assessment against the procurement capability model.
4. Develop standard procurement role competency requirements and implement these in agencies.
5. Benchmark key agency procurement and price performance against the private sector.
6. Increase the migration of skilled and qualified procurement professionals to fill skill gaps.
7. Ensure that government procurement salaries reflect market norms.
8. Agencies are to allocate resources to reform procurement practice.
9. Identify opportunities for procurement shared service centres.
10. Include procurement professionals in works project teams.
11. Establish a small team of strategic procurement experts (commercial pool) to support high-risk/high-value projects across government.
12. Establish resources to support public-private partnership projects.
13. Determine procurement training needs and source providers.
14. Agencies are to use tools provided to assess procurement capability and capacity.
15. Agencies are to ensure that procurement staff members are trained to fill identified skill gaps.
16. Provide e-learning to help procurers gain a professional procurement qualification.
17. Target key procurement personnel within agencies to fast-track their professional procurement education.
18. Develop and launch career development plans for procurement personnel.
19. Develop New Zealand procurement academy.
20. Encourage and subsidise public sector procurement professionals in gaining recognised procurement qualifications.
21. Launch procurement graduate programme to increase New Zealand capacity.
22. Facilitate secondments and career progression planning among agencies for procurement professionals.
23. Establish and facilitate a Procurement Leaders Group (persons aged under 35) of future procurement leaders.
24. Develop “Demystifying Procurement” as a two-day introductory course to procurement in a public sector context or alternatively for learning on line.
Source: (OECD, 2016[16]).
In France, ministries are utilising a strategy of supporting and growing a specific professional procurement capability by ensuring competency levels through targeted training. A professionalisation framework has been developed by the Direction des Achats de l’État (DAE) in France. It includes:
An Interdepartmental Reference Framework (ID) for Procurement Training.
ID mapping of purchasing skills (DAE prefiguration).
Definition of new reference jobs for the establishment of a new recognised profession of purchasing.
Development of a training strategy that meets ID objectives and needs of purchasing stakeholders.
A training strategy set out for state buyers includes the following seven steps:
1. As a priority, target those working in procurement over 50% of the time.
2. Secondary objective – improve on less mastered skills.
3. Specialisation or A-Z training.
4. Only training designated by DAE.
5. Provide e-learning options.
6. Provide a certification training programme.
7. Develop dedicated manuals to complement and support raining.
Each Ministry’s training plan must be consistent with the framework defined by the DAE. All procurement training is interdepartmental and can be attended by all buyers from all departments (OECD, 2018[7]).
As the examples show, professionalisation can be advanced by defining procurement positions at different professional and hierarchical levels with job descriptions and specifying the required qualifications and competencies. Career paths can be defined for public procurement professionals, taking into account possibilities for vertical and horizontal mobility.
2.7.1. Learning together - collaborative approaches to addressing gaps in capability
Collaborative approaches to learning that bring together private and public sector procurement professionals can improve the skills and competencies of the procurement workforce through having knowledge and expertise shared across both sectors.
In both Peru and Australia there are collaborative initiatives in place with the private sector that are designed to ensure that knowledge is shared so as to promote professionalisation of the procurement workforce. In Peru, strategic alliances have been developed between the OSCE (the Government Procurement Supervising Agency – Organismo Supervisor de las Contractiones del Estado), universities, and other institutions. The prerequisites to becoming a strategic ally are having administrative, teaching and technical staff and adequate infrastructure. The number and quality of the training offers from each of the strategic allies is monitored. “Virtual medals” are distributed to strategic allies that have implemented the planned activities, and there is a prize for strategic allies that have implemented innovative training methods (OECD, 2017[13]).
In Australia the Department of Finance collaborates by:
Hosting the Senior Procurement Officials Reference Group, which represents Australian Commonwealth procuring entities approximately twice a year.
Leading a steering committee of industry and procuring entity stakeholders that is focused on developing and enhancing standardised contract documents that streamline and simplify processes for suppliers and entities.
Improving the Centre of Procurement Excellence to increase the capability, professionalisation and mobility of the procurement workforce.
Leading the Secretary’s Consultative Roundtable, which meets approximately twice a year to engage collaboratively with key industry and government stakeholders on significant procurement issues (OECD, 2018[7]).
Box 2.6. Belgium and development of technical specifications with businesses
The Belgian Government places great importance on sustainable development issues. In 2014 a knowledge centre, the Federal Institute for Sustainable Development (FIDO), was established. It was recognised that in order to roll out a sustainable public procurement policy, a web-based user’s guide was needed to outline the technical sustainability criteria to be included in specifications for the purchase of supplies and services. The FIDO continuously updates this Sustainable Procurement Guide and advises on the correct interpretation of technical specifications and other clauses contained within it. The FIDO also conducts studies on methodologies such as life cycle costing. The FIDO had 11 staff in 2014.
To ensure good results, the Sustainable Procurement Guide must:
1. be kept constantly up to date
2. match the characteristics of the sector concerned, without losing sight of competition and price considerations.
A methodology was developed to reach out to businesses when compiling or updating technical specifications for products and services belonging to an industrial sector. A standing working party established by the FIDO, consisting of members of the community, regions, provinces and municipal councils, contacts the professional organisation that represents the sector (not individual industrial sector companies). The professional organisation mobilises the companies that it believes are best placed to help establish technical specifications that match the capabilities of suppliers in the industrial sector in question. This working method has helped establish realistic specifications that support improved levels of competition.
Source: (OECD, 2015[19]).
The benefits of collaboration among the various stakeholders involved in public procurement are well recognised. In the area of capability development particularly, there are opportunities to learn from each other. Both the public sector and private sector are looking for ways to meet the future needs of citizens, which means that the procurement workforces in both sectors also need to learn new ways of working.
References
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