IT procurement has major shortcomings
Public procurement of IT has major shortcomings that create problems for both buyers and suppliers. That is why we are now presenting ten proposals for how procurement can be improved and made more trustworthy, write the CEOs of several large IT companies.
The Government wants Sweden to be the best in the world at using the opportunities of digitalization. The digital agenda points the way and the eGovernment strategy sets targets for the central government's ability to interact digitally and to transform itself to deliver first-class citizen services in the most efficient way possible. However, if the public sector is to benefit from all the opportunities that IT offers, it needs to be procured in a better and more efficient way.
According to various estimates, public procurement of IT already amounts to over SEK 50 billion annually. It is of the utmost importance that this money is used in the best possible way so that the public sector receives high-quality and cost-effective solutions that both support and develop its needs.
Unfortunately, the industry feels that public procurement has major shortcomings that create problems for both procurers and suppliers. One serious consequence is that more and more potential suppliers - not least small and medium-sized enterprises - are refraining from submitting tenders. On the other hand, public authorities also need to be better at utilizing the skills, experience and delivery capabilities of global IT companies by, for example, not requiring all references to have been carried out by the supplier's legal company in Sweden. This leads to less competition, fewer options for buyers, and simply a risk that the buyer does not have access to the best suppliers and the most innovative solutions.
Problems that currently prevent companies from submitting the best bids include overly detailed requirements that do not reflect real needs, requirements that cannot be monitored, unreasonable contract terms and unclear evaluation models.
The nationally coordinated framework agreements (procured by the central purchasing offices at Kammarkollegiet and SKL Kommentus) are perceived as a particular problem area. Uncertainty about which authorities intend to call on the framework agreements makes it difficult for companies to assess both risks and opportunities. The requirements in the framework agreements become the lowest common denominator for several authorities and the risk is that they are not a good fit for anyone. However, framework agreements are a good alternative for more standardized solutions that do not require too complex call-offs. Call-offs from framework agreements often take place via a so-called renewed competitive tendering - not infrequently, new requirements specific to the authority are introduced that completely change the conditions and increase the costs for companies.
This week, the industry organization IT&Telecomföretagen presents a report with ten proposals for better public procurement. The proposals are about improved requirements and a more developed procurement process - not about changing legislation. A key factor is increased trust between contracting authorities and suppliers. This requires better dialog and greater transparency. For example, we want public authorities to openly publish all their purchases online. More effort and resources must be put into the preparatory work for procurement, and requirements that cannot or are not intended to be followed up should not be imposed.
Procurement is a strategic tool to ensure that the needs of the business are met and that public funds are used optimally. An increased strategic perspective requires better governance, increased resources for the procurement unit, new competence requirements for procurers and a broader understanding of procurement across the contracting authority.
Many of the problems and suggestions mentioned in the report were already highlighted by the industry five years ago, but surprisingly few improvements have been made. We in the industry have solutions for a more efficient public administration and want to be able to offer them. If the procurement process is not improved, the willingness to deliver will decrease and the public sector will be without the best and most innovative solutions and services. Ultimately, this will affect us all.
Per Adolfsson, CEO Microsoft Sweden
Johan Sandell, CEO IBM Svenska AB
Kjell Ahlzén, CEO HP Sweden
Lars-Åke Norling, CEO Telenor Sweden
Åsa Landén Ericsson, CEO Enfo Pointer AB
Stefan Bäcktorp, CEO SFT Bredbandsgruppen AB
Magnus Larsson, CEO Expander Business Consulting AB
Anders Englund, CEO Attentec AB
Staffan Hanstorp, President and CEO Addnode AB
Anne-Marie Fransson, Director of IT&Telekomföretagen within Almega
Article published in Dagens Samhälle May 28, 2013, opens in new window.