Can public procurement harm society?

Yet again we hear claims that public procurement processes are having a detrimental impact on society. The problem appears to be a trend towards contracts as opposed to grants. It strikes me that there is a misunderstanding in the minds of some procurers that grants are perceived as bad, while contracts are perceived as good. That just isn't true, both are options and the procurement professional needs to be able to help funders in that option appraisal and select the right choice.

Julia Unwin’s ‘The Grant Making Tango’ probably provides the best guidance for procurers but there are other sources. To me it is a must read for any procurement professional in setting out the options appraisal for the procurement decision of Grant V Contract.

The guide basically refers to purchasing as ‘Shopping’ (what we prefer to call procurement and contracting) and then differentiates grants as being either ‘investing’ or ‘giving’.

You ‘give’ when you want to be associated with a good cause and don’t expect anything in return; a bit like the Christmas ideal. It may be that the ‘giving’ organisation will be more than satisfied if it is given credit in say the local theatre’s advertising as a sponsor.

‘Investing’ is different.  You invest when you want something to take place which wouldn’t otherwise take place.  For example, there are no providers in the market and you want to ensure some service provision takes place or alternatively you want to ‘market make’.  In such a situation you would expect there to be performance management in place to ensure the funder obtains the intended outcomes for the funder's investment - a form of contract management.

It is selecting the wrong option which is causing the harm, yet at the same time there is a need to help previous grant recipients navigate the change if contracts are now deemed most appropriate. 

Aside from this there are the commitments of the Compact (and in local government Local Compacts and the Small Business Friendly Concordat) which should be understood by procurers.

This isn't easy stuff but it is not complicated, nevertheless it causing trouble in the market and difficulties for those whose primary intention is to 'do good'?