Public Procurement - a Stimulus for Growth

by Paul Davis, Lecturer in Procurement at DCU Business School

8th June 2009
 

Many suggestions are being thrown around as to what we can do to get out of this recession. One suggestion is to increase public spending to promote employment, stimulate the economy and support small- to medium- sized organisations. Currently in excess of 800 billion euro is spent annually within the EU through public procurement. If targeted, surely this spend could form part of the stimulus packages for not just the EU, but also for Ireland.

Paul Davis, Lecturer in Procurement at DCUBS

If procurement uses clear and robust output specifications, companies can be left with the space to propose innovative solutions. This gives firms strong incentives to maximise the efficiency and performance of the products and services they offer, which in the end will benefit the public by providing a better service or product. Focusing on the local marketplace means that public procurers can secure the best available solution locally while at the same time stimulating innovation. 

A clear action for public purchasers is to put innovation at the core of public procurement practice. Substantial investment has been made to date in R&D in Ireland. We need to leverage this and to create better value for money in public services, through achieving efficiencies, improved productivity, quality, faster response times and reduced whole life costs. Further actions for stimulating the local economy could include:

·         Improving the quality of procurement information available to help reduce perceived disadvantages experienced by small and micro enterprises

·         Sub-dividing large contracts could into lots and thus further opening the way for SMEs to participate and broadening competition

So even with our current annual spend of at least 12 billion euro, if we focus on who we spend this with then local economies can be encouraged to grow without perhaps the need for huge additional stimuli.

 The above article appears in the 7th June 2009 edition of the Sunday Independent