This document summarizes a presentation given by Paul Ramsay of Equinox IT on suppliers' perspectives on government procurement. Some key points made in the presentation include balancing the conflicting demands of wants versus needs, risk versus reward, and complexity versus simplicity in procurement. It also notes that procurement must consider the whole life cycle and total cost of ownership, and that there is always a price to be paid, just a question of who and when. The presentation emphasizes that procurement is a process, not an outcome, and stresses the importance of building capability on both the government and supplier sides through clear and concise contracts and tender documents.

1. Copyright © 2015 Equinox Limited |
Government procurement:
A supplier’s perspective
New Zealand Procurement Academy
Breakfast Session
Paul Ramsay – 28 May 2015

2. Copyright © 2015 Equinox Limited |
Equinox IT is New Zealand’s leading
independent IT consultancy, delivering
software development, consulting and
training services.
Established in 1995, we inject fresh
thinking to solve tough business
problems.
Equinox IT has over 70 staff based in
Wellington and Auckland.
About Equinox IT
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3. Copyright © 2015 Equinox Limited |
• Demand
• Consumer
• Agency
• Taxpayer interests
• Supply
• Enabler
• Sector
• Economic development
What you do is important
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4. Copyright © 2015 Equinox Limited |
• Inclusive
• Open
• Flexible
• Tailored
• ‘Bite-sized’
• Fit for purpose
• Exclusive
• Closed
• Fixed
• One size fits all
• ‘Big-bang’
• Perfect
How you do it is even more important
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5. Copyright © 2015 Equinox Limited |
Balancing conflicting demands
• Wants vs. needs
• Risk vs. reward
• Rigidity vs. agility
• Status quo vs. innovation
• Complexity vs. simplicity
• Unknown vs. certainty
• International commitments vs. local obligations
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‘Pick any two’ – you can’t have
everything
Time
Cost Quality
Scope
Risk
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Questionable procurement practices
• Endeavouring to outsource every risk and all
accountability
• Dubious interpretation and selective application of
the rules
• The myth of the ‘level playing field’
• Predetermined outcomes
• Lowest cost at all costs
• Honest estimation (‘true cost’) is often penalised
• Exercises in self-justification – ‘win / lose’
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8. Copyright © 2015 Equinox Limited |
• The delivery of business
value (‘results’) is
ultimately the only
outcome that really
matters
• What is the ‘outcome’
you need?
• What does ‘value’ look
like?
Delivering outcomes
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Concrete Lifejackets

9. Copyright © 2015 Equinox Limited |
• Procurement occurs in
a context:
• Before (strategy)
• After (operation)
• Must consider:
• Whole of life
• Total cost of ownership
• There is always a price to
be paid – it is just a
question of who and
when
Procurement is a process not an
outcome
Acknowledgement: Office of the Auditor-General, ‘Central Government: Cost Effectiveness and Improving Annual Reports’
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• Capability:
• Knowledge
• Skills
• Experience
• Maturity:
• Markets
• Organisations
• Individuals
Building on both sides
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• ‘Size and scale’
• Tender documents:
• Reader-centric
• Respondable
• Contracts:
• Intellectual property
• Liquidated damages
• Payment terms
• Are they clear, concise
and complete?
Keeping it in perspective
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12. Copyright © 2015 Equinox Limited |
• Only ask for what you
really need
• Don’t put in place any
unnecessary barriers
• Allow the supplier to
demonstrate excellence
• Make it simple and easy
to respond
• Be mindful of the time
and cost involved in
responding
• Be open and transparent
Making it easy
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• What did we do well?
• What could we have done
better?
• What should we do
differently next time?
Learning from experience
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Some final observations
• What you do makes a difference
• Government use and referenceability is important
• Understand the wider implications of your actions
• Don’t hide behind process – look to engage with suppliers
before, during and after procurement
• If you want innovation then you need to be innovative in how
you procure it
• Don’t mitigate the opportunity when mitigating risks
• ‘The cost of quality is the expense of doing things wrong’
• Promote and acknowledge examples of ‘good practice’
• A strong, diverse and vibrant local market is in everyone’s best
interests
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15. Copyright © 2015 Equinox Limited |
Injecting fresh thinking to solve
tough business problems
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