Learning about procurement processes helps government agencies and suppliers work together more efficiently.
Procurement refers to the different ways an organisation obtains goods and services they need, including:
No matter how big or small your agency is, procurement is the fuel that feeds every part of the process. If you’re writing reports, you need computers and printers; if you’re moving products from place to place, you need drivers, trucks, warehouse space and phones; if your agency handles money, you need access to financial and banking services.
You might think you’ve never done any procurement, but it touches every aspect of our lives.
When you buy groceries, for example, you’re participating in procurement. This applies to you as an individual – you need food, so you buy food – and to all the processes those products had to pass through to get to that point. For example, farmers growing that food, all the transport and packaging involved, and the work required to put it onto shelves.
Procurement work influences every part of an operation. If you’re in charge of procurement processes for your agency, you need to have a holistic knowledge of the business.
You’ll work alongside other functions like finance, assurance and communication. For large procurement projects, you need to be across Treasury processes, business case and investment cycles, and understand how external organisations like the Officer of the Auditor General work.
Making decisions in procurement can affect not just a single agency or sector, but the whole of New Zealand. Government agency procurement – driven, in part, by New Zealand Government Procurement (NZGP) contracts – accounts for 17% of NZ’s GDP. In total, the public sector spends around $51.5 billion annually on purchasing goods and services from suppliers.
It can feel intimidating, but taking control of your procurement processes has many benefits. Procurement can be used as a lever to influence policy decisions and the way an agency functions day to day. A very tangible benefit is making sure your agency – and the government – gets the most valuable results when procuring goods and services.
Effective procurement is one of the best ways to make all sorts of positive, meaningful differences to the way your agency operates. For example, purchasing standing desks for your office may mean that staff are more productive, and less susceptible to repetitive strain injuries; converting your fleet to electric vehicles will improve your carbon emissions profile; an improved printer system could cut document processing time, while also reducing paper waste.
Owning your procurement ability can have personal benefits too. Procurement practitioners develop valuable skills, a wide knowledge of the organisation and a broad base of useful contacts.
Procurement has three major stages: plan, source and manage.
Planning covers everything that goes on before the actual procurement begins, as well as the work that goes on between procurements. This means identifying your needs and options available, considering requirements and risks, developing procurement plans, reviewing policies, and doing any necessary research.
Sourcing involves finding the right suppliers for your procurement, examining the potential offers, and selecting the one that’s right for your agency. Much of this process involves engaging with the supplier market. New Zealand Government Procurement (NZGP) can help you with advice, tools and templates along the way.
Management is about keeping the procurement process running. This includes monitoring and tracking the contract delivery, cost management, managing any risks that arise, and tending to relationships with everyone involved. Performance management, reviews, daily administration and contract termination are also part of managing procurement processes.
Even though we represent these as a step-by-step process, it’s important to remember that procurement is cyclical. All the steps feed back into one another. You’ll find yourself switching between stages due to changing circumstances or to ensure that your next procurement runs smoothly. Think of the process as a strong foundation, which lets you build any procurement on top.
Procurement can be a complicated beast, but we’re here to help. NZGP has streamlined the processes involved, and made it easier for agencies and suppliers to do business with the government.
NZGP currently has 19 All-of-Government (AoG) contracts available for agency use on this website. These can help you to leverage the government’s collective purchasing power to find the best arrangements for your agency’s needs. You can learn more about these below.
We have a comprehensive guide to the entire procurement process, from planning a procurement and sourcing suppliers, to managing any ongoing services. Whatever stage your agency is at currently, you’ll find plenty of advice on what to do next.
If you still have questions about the process, or you’d like to speak to someone about your organisation’s specific procurement needs, you can contact our procurement experts.
Your agency may already have an account manager to help you with any questions. If you’re not sure who this is, you can email us.
Suppliers, or those looking to get involved in supplying for government, can contact NZGP with feedback or queries as well. You can also check out the suppliers section of this website for more information.