Decentralisation in Procurement

OCM Principal Rochelle Kirk Discusses...

OCM Principal Rochelle Kirk recently attended a Self Insurance Sharing Session for icare NSW in partnership with Suncorp Risk Services (SRS) to discuss issues around Enterprise Risk Management. More specifically, Rochelle presented on the trend of decentralisation in procurement and how to manage the risks it presents.

* icare operates as a Public Financial Corporation governed by an independent Board of Directors that delivers insurance and care services to the people of New South Wales.

Procurement: What you need to look out for

A few simple procurement tips may save you headaches in the long run, according to senior procurement professional Rochelle Kirk (Principal, OCM).

Speaking at a recent Self Insurance ERM/OR Sharing Session, Kirk told the attendees that the current trend of decentralising procurement had both advantages and risks.

“We’re moving procurement away from centralised hubs, and decentralising it out to the businesses and people who have the knowledge and expertise in particular areas,” she said.

“This can have a lot of benefits. They know their market. They know their suppliers. They know what other agencies, or other people are doing because they talk within their industry. But it does leave some gaps and risks,” she added.

Managing Risk

Training

Decentralisation can come with higher risks, as people from commercial backgrounds and new starters may not fully understand the government policy and procedures regarding procurement.

To help manage this, Kirk recommends that procurement be covered in onboarding training. She also recommends that existing employees have access to training, whether in person or online, to help them understand their obligations and responsibilities.

“The influx of people into government from the commercial space can also be an issue. They’re used to operating in a particular way. They don’t understand that government has policies and rules around how to do procurement,” she said.

“Make sure that when new employees come into the organisation, that they understand the environment in which we’re working,” she added.

Attestation

Asking people who are involved in procurement, or signing off on procurement, to sign an attestation can be a great way to ensure policies and procedures have been adhered to.

According to Kirk, the attestation statement can just be as simple as “To the best of my knowledge me and my team have followed the rules and processes in relation to the rules of procurement”.

Attestation can have a two-fold benefit according to Kirk, the first being that if people are unsure that the rules have been followed, it gives them an opportunity to come back to the procurement professionals to check.

Secondly, it provides you with a good opportunity to get in and help build up capability and capacity in procurement.

Sense checking

“When I worked at RMS we put in place reporting on dollar values against individuals, as well as reporting on individual suppliers and cost centres,” Kirk said.

This reportage, according to Kirk, was important because it looked at who individuals were working with continually and sense checking those ongoing relationships.

“Often there’s extremely good reasons why people may be using the same organisations, but it’s still important to double check,” she said.

Perception is as important as intent

We all know that we cannot accept large gifts from suppliers or possible contractors. But even a small gift, like a mug, can become an issue if a rival contractor spots you drinking from it while meeting them to discuss what they can bring to the table. So, it is important to keep in mind the potential perception that your actions may have.

“The risk in conflict of interest can be quite large and can happen on a grand scale. But it can happen on a small scale too (hats, mugs etc),” she said.