From Data to Decisions Building Resilient, Inclusive, and Risk-Aware Procurement Systems

Public procurement is an essential part of how governments operationalize acquiring goods and providing services in order to deliver on their missions. Governments often approach supplier risk, crisis resilience, and economic growth as separate objectives, yet they all share reliance on public procurement. How governments strategically purchase, manage, and evaluate the goods and services they need can be critical in ensuring suppliers meet their obligations and people receive goods, infrastructure and services they can rely on.

The IBM Center for the Business of Government, in collaboration with the Open Contracting Partnership, gathered practitioners, policy experts, international finance institutions, and researchers to explore how one comprehensive procurement strategy and targeted reforms can further these goals.

Integrity, Data, and Managing Risk

A strong procurement strategy can drive economic growth and improve service delivery, but successful reform must be rooted in transparency and continuous data-informed decision making.

Participants from the United Kingdom and Lithuania highlighted the importance of data accessibility, and how greater access to standardized procurement data can lead to improved strategic decisions, broadened participation, and increased accountability in public spending. The UK has implemented legislation that requires public bodies to publish procurement data at each stage of the procurement lifecycle. In particular, they encourage pre-market engagement and increase opportunities for small businesses and suppliers who are new to doing business with government.

Lithuania promotes transparency in the public procurement lifecycle by publishing contracts and requiring disclosure of winning bids. This helps increase competition by granting current and potential competitors greater visibility into the procurement process. Transparency is incentivized by requiring contracts to be published before invoices can be paid. Standardized procurement data also illuminates trends in purchasing needs and uncovers opportunities for collaborative purchasing across the government.

Through sustained change management efforts, the lessons learned from this data can be operationalized to allow procurement officials to prioritize promising and fruitful opportunities in future procurements.

Mitigating supplier risks can start with the evaluation phase. Procurement officials must look beyond the lowest price to assess a supplier’s true capabilities, such as their ability to adapt to change. This adaptability is crucial in selecting for example a long-term technology partner, as a supplier ideally evolves with changing mission needs. Participants cautioned that generic evaluation criteria may inaccurately capture a supplier’s capabilities.

Beyond the selection phase, creating ongoing feedback loops between suppliers and governments can improve performance and mitigate risk. End-user surveys and direct feedback to suppliers emerged as useful tactics. Lots of procurement data exists, but it is scattered across different systems. Fraud and corruption is not necessarily hidden, it is scattered, presenting a huge opportunity for standardized procurement data. The group was optimistic about the use of emerging technology for procurement professionals, as it can help address capacity constraints by automating administrative tasks and accelerating data cleaning and analysis, allowing officials to devote more time to higher-value work.

Procurement During Crisis

A crisis will test a procurement system’s ability to act quickly, and the preparations must begin well before the crisis itself. Participants emphasized the need to establish resilient systems, high-quality data, and strong relationships with partners in advance. Governments must have accurate information on preexisting contracts, resources, funding, staffing, and operational needs on hand to make effective decisions quickly.

Procurement must carefully navigate the tension between urgency and maintaining integrity and transparency. One recommendation was placing procurement officials within organizational structures where they can contribute to strategic decision making and including procurement officials alongside finance, IT, security, human capital, and operational leaders in key decision-making settings.

Organizational culture must also embrace new ways of thinking and view failure as a learning opportunity to build crisis resilience. Participants highlighted the opportunity to learn from private-sector approaches to risk mitigation, and embracing new approaches. Ukraine has modeled how innovative solutions can turn procurement challenges into opportunities. Uganda’s response to the COVID-19 pandemic illustrated the value of engaging external stakeholders in crisis response, particularly through collaboration and co-creation in health and education procurement.

Finally, participants underscored the importance of risk management strategies that can identify potential corruption, collusion, and conflicts of interest without diverting attention from urgent response and recovery efforts. These capabilities depend on reliable, high-quality data that enables officials to identify risks and make informed decisions under pressure.

Supplier Diversity

Government can diversify supplier base without sacrificing performance standards. Accessibility and performance must be pursued together, particularly in high-stakes procurement initiatives. However, several barriers can limit small and medium-sized enterprise (SME) participation throughout the procurement lifecycle. First, limited access to information about contract opportunities, such as when announcements appear in exclusive channels or require expensive tools to identify relevant requests for proposals, can hinder SMEs inclusion in the procurement process. Second, delayed payments after contract completion can undermine trust and discourage businesses from pursuing future work engagements with governments. Finally, overly restrictive business requirements and complicated procurement procedures can impose burdens on smaller or newly established companies to engage with the government.

Actively ⁽¹⁾ supporting SMEs requires equipping them with customer knowledge and contract experience, which enable their longevity in the marketplace. Mentor-protegee programs with new suppliers, aimed at guiding them to sustained success after the bid is awarded, emerged as an idea to achieve this goal. Alternative contracting approaches, including subcontracting and the use of transaction agreements, may also help reduce compliance burdens and provide businesses with opportunities to gain experience navigating government procurement. With sustained institutional investment, these strategies can help suppliers build their complementary skills and establish a foundation for long-term success in the federal market.

Looking Forward

Ensuring integrity, building in flexibility, and increasing supplier diversity are all important aspects of successful public procurement. Procurement is a strategic function and should be considered as such amongst the government’s other institutional responsibilities. Crisis and transformation provide a unique opportunity for governments to rethink public procurement for the next generation. With emphasis on the pillars of success, public spending on goods and services can translate into meaningful outcomes.

(1) In terms of solutions: 

• Lots of space for innovation and breaking out of silos to streamline processes (i.e. working with Ministries of Finance, banks, mentorships)
• Smarter use of process to respond to key challenges, i.e. pre-registrations are a key opportunity to get banking information, set up e-payments.