Well planned is half done – planning a public procurement

Teksti | Saara Soikkeli , Ilona Frisk

It might not seem so, but public procurements are always a topical issue, since almost a fifth of Finnish gross domestic product (GDP) is spent on them. In Euros, this means about 35 billion yearly. (Elinkeinoelämän keskusliitto, 2019.) It seems, that the procurements tend to get publicity especially when they fail. Unsuccessful public procurement often faces hard critique. This makes sense, for the funds the procurement units spent are public, often acquired through taxation. Public procurement units include government and municipal authorities as well as organisations that have been granted financial support for more than half of the value of the procurement from other public procurement units (Finland 2016).

To avoid unsuccessful public procurements, it is important to plan them well. However, not only a long lasting planning period will guarantee success. A quite recent, unfortunate example of this is what happened with the information system purchase for ministries. Some vital specifications were missed, when putting the requirements together and although the procurement was planned for almost four years, it had to be cancelled and the specifications to be included as mandatory requirements for the suppliers in the next, re-initiated round of procurement process. (Parviala 2018; Korhonen 2018.) A well planned public procurement should consist of three phases: planning, tendering and contract period. Unfortunately the planning phase may sometimes be oversighted if public procurement units fixate on compliance regarding the competitive tendering. (Soikkeli 2019, 5.)

During the academic year 2018 – 19 a thesis project of the topic, planning a public procurement, was carried out as a research-based development project at Laurea University of Applied Sciences. The development task of the thesis was to execute the planning phase of a procurement process. The aim of the project was to enhance successful procurement process in a case organization. The case organization had an initial plan to purchase an electronic visitor management system that besides increasing security and enabling more effective management also would reduce the costs of the visitor management process. The requirements for the system itself were already put together. As a public procurement unit, the organisation was required to organise a competitive tendering as the value of procurement exceeds the threshold value as stipulated in the Act on Public Procurement and Concession Contracts 1397/2016. (Soikkeli 2019, 5.)

The case project included three main phases. First, the current state of the visitor management process was analysed and possible deficiencies were identified by comparing them with the criteria set by the case organisation. In the second phase, a market research was conducted in order to understand the current market for electronic visitor management systems as well as finding out the current selection offered in general. In the third and final phase of the thesis project, the case organization was provided with a report including the findings of earlier steps and calculations of cost estimates for different procurement options. This project was to support decision making, and an implementation plan for the rest of the phases of the procurement process. (Soikkeli 2019, 5.)

Public procurements are governed in the Act on Public Procurement and Concession Contracts 1397/2016. The aim of the Act is to enhance the use of public funds by emphasizing high quality of the procurement process.  According to the act, the contracting entities shall put effort to arrange their procurement operations in a way that procurements can be implemented with optimal economy, quality and orderliness, taking advantage of existing competitive conditions and allowing for environmental and social aspects. (Finland 2016.) During this thesis project, it can became clear, that planning is a critical phase of a procurement process. In order to secure a high quality, financially optimized and socially as well as environmentally sustainable procurement the organisation needs to know what they want and need to purchase. The need shall be defined in the first phase of a procurement process. (Soikkeli 2019, 29.)

In this case, the thesis project was about the purchase of an electronic visitor management system. It is considered a part of access control in the framework of this thesis. Access control is in turn a common physical security measure, based on risk management and assessment process. This kind of system may appear messy in complex organisations. As it is not easy to study the whole organisation in detail, the goal, from the point of view of the public procurement, should therefore be understanding of the main characteristics, differences and challenges that occur most commonly and look for response to them. For example, in this thesis project, the most prominent issues discovered in the current state of the visitor management process, appeared to be related to paper-based system the case organization was using. As a result of the project, it became obvious that the main goal suggested for the commissioner of the thesis was that the procurement should include enough requirements for suppliers in order to ensure the transfer of the data of visitor management process into a digital database. (Soikkeli 2019, 30.)

The importance of thorough planning in the public procurement process, was during the spring 2019 emphasized, not only in this thesis project, but also by Mr. Ville Salonen, Service Director in Securitas Oy. He was visiting Laurea in May and gave lectures about the topic for next autumn’s online study units. In the talks with Mr. Salonen, he also did emphasize the importance of prior-planning of procurements. (Salonen 2019. Personal communication.) The Act on Public Procurement and Concession Contracts 1397/2016 regulates the prior and during procurement communication between the bodies of the process, but allows so called technical dialogue if it is conducted transparently and without violating the equality of all possible parties. (Finland 2016.) Also Mr. Salonen pointed this out and strongly promoted this possibility. He agrees with the conducted thesis project also when saying that a successful public procurement needs to be well planned, in order to avoid cancellations. However, the planning has its effect not only to the procurement process, but also to the customer satisfaction later on. According to Salonen, there are examples of purchases, where the procurement unit has not taken into account all the aspects of the procurement. When the service then should begin, the customer does not receive the service that they expected they would, for they have purchased only parts of it, instead of the whole process needed. (Salonen 2019. Personal communication.)

In conclusion, it can be said that the public procurement process is more extensive than the tendering period. There must be enough resources allocated for the whole procurement process and pay enough attention to the planning phase. This conducted thesis project of Saara Soikkeli (2019) already has acted as an eye opener also at Laurea when planning future study units. It was one reason to invite an expert from the suppliers’ side to be giving lectures for the online degree students. Both, the thesis project and recording the video lectures, have provide possibilities to get practical and experimental, fresh and current information about planning public procurements, that will benefit the students in the future.

URN http://urn.fi/URN:NBN:fi-fe2019101833668

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