NZ Government Procurement poised for a digital makeover

NZ Government Procurement poised for a digital makeover

Data, digital, leadership and skills are the foundations of a thoroughgoing rebuild of NZ Government Procurement.

Stuart Nash.

Stuart Nash.

Credit: Supplied

Wide-ranging changes are planned for NZ Government Procurement, the Ministry of Business, Innovation and Employment (MBIE) unit overseeing government ICT and other spending. 

Delivering what the government calls "Procurement for the Future" would require significant improvement in the data available to inform both day-to-day procurement delivery and overall management of the system, a Cabinet paper released today by Minister for Economic and Regional Development Stuart Nash said.

This included making data broadly available to agencies and suppliers and optimising its collection, analysis and management.

New digital platforms and tools will be a foundation to enable transformation of the procurement system. 

"The aim is to create a one-stop-shop e-procurement ecosystem where information, tools and opportunities are all accessible, timely and targeted, making it easier for agencies and suppliers to do business," the paper said.

The initiative is in response to government's belief the procurement system is not delivering value in the ways it and our communities expect. 

"As a consequence, a major overhaul of the procurement system including its processes and culture is now underway," the paper said.

Government spends $51.5 billion on goods and services annually and expected this to deliver value, an associated white paper said.

Economic and environmental pressures, and the impact of COVID-19, highlighted the importance of a procurement system that was responsive and resilient and could withstand the "potential disruptions of tomorrow". 

"The system must be fair, transparent, inclusive, and efficient," the white paper said. "Now is the time to re-imagine government procurement in New Zealand and position it for the future."

A request for information (RFI) to providers of digital procurement software was undertaken in February to gain information on what was available in the market and with a view to informing and enhancing the functional requirements for digital procurement tools.

Government Procurement was now actively engaged with leading agencies to identify where co-design and collaboration could support the formation of the most effective digital platforms. The unit was also developing a design system and visual language for all the digital tools in the ecosystem. 

"This will support future ecosystem deployments, improved user experience and the application of organisational self-service profiles for agencies and suppliers," the white paper explained. 

Design work is expected to be completed by late-2022.

Metrics to enable assessment of how well the procurement system was performing were also essential to driving better decisions and behaviours across government, improving accountability and increasing the transparency of public value achieved, the cabinet paper said.

However, no such metrics – including basic data about spend and changes over time – were currently in place.

An interim dashboard giving an early view of procurement spend was being developed and would be presented to stakeholders by the end of 2022. 

"A plan for the progressive rollout of further system metrics enabling all stakeholders to gain insights about procurement performance is also being developed," the paper noted.

Another workstream in the transformation aimed to enable central oversight across the system, introduce sector-specific procurement expertise and leadership, co-ordinate procurement projects where there were benefits in doing so, and strengthen accountability for procurement decisions.

A key initiative in this workstream is to create leadership within the procurement system at sector level, including direct lines of accountability to the centre. 

"This is likely to involve appointing high-calibre ‘sector leads’ (e.g. for sectors such as construction, ICT, social services, corporate services, etc.) who have deep insights into those sectors and are able to guide the behaviours and practices of agencies and suppliers towards improving delivery, adopting more innovative and flexible practices, and co-ordinating activities where there are public benefits from doing so." the cabinet paper said.

Sector leads will work within the directions and standards set by the procurement system leader, which the Public Service Commissioner will designate under the Public Service Act 2020.

A small working group comprising policy experts and procurement specialists from both public and private sectors was currently designing options for a sector-based leadership model.

A further workstream aimed to improve day-to-day procurement processes, practices and behaviours so that government procurement delivered the best possible value for New Zealand, supported by both the better data and more co-ordinated leadership of the first two workstreams.

"The capability of public procurement practitioners is critical to meeting the Government’s aspirations for the procurement system and, across government, it is patchy – many tend to take a rules-based approach rather than the outcomes-based approach that the Government wants," the paper said. 

Addressing this was a matter of both individual upskilling and using capability across the system.

"Since November, the foundations of a substantial and complex programme to reset New Zealand’s procurement system in line with Cabinet’s directive have been established. These include the prioritisation and sequencing of the actions; establishing a dedicated programme management team under the direction of a fulltime programme director; and putting in place the programme controls needed to drive work efficiently to achieve the major change in performance that Cabinet expects."

By the end of the year, the programme was on track to deliver a widely-accessible early dashboard on spend analysis, sector performance and procurement capabilities based on the integration of existing data and the completion of the first phase of the procurement of a new digital procurement platform to enable agencies and suppliers to shift their procurement activities to a digital environment, among other goals.

Beyond 2022, a high-level roadmap had been developed to indicate delivery milestones and pathways towards achieving the programme goals by 2030.

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