19 July 2021

UN report highlights four barriers to innovative public procurement

A new report by the UN Economic Comission for Europe (ECE) notes that innovation-enhancing procurement (IEP) should be considered a strategic policy tool, however that requires specialized tools and processes which are “demanding in terms of governance and management capacity in the public sector.” The report states that the public sector faces four key barriers to pursuing IEP.

These barriers are

  • Leadership

Procurement is considered an “admin function”, while a large part of procurement is “compliance driven and not innovative”.

  • Institutions and governance

There is a lack of a robust legal and regulatory framework on IEP, risk aversion and resistance to change, poor management and coordination, and lack of financial support.

  • Management

There are difficulties in ensuring a competitive process, poor measuring systems and IT tools, and lack of capacity to measure and monitor performance over the life of the contract.

  • Capacity and skills

There are challenges around lack of administrative capacities, lack of knowledge and specific skills, and difficulty in the management of pre-commercial procurement and competitive dialogues.

To overcome these barriers, the report argues for a shift from “defining detailed parameters” to allowing suppliers “the space to propose solutions according to strategic goals”. This change requires flexibility to select bidders based on total cost over the lifecycle of a good or service, rather than lowest upfront cost.

The full report can be downloaded here.