Procurement vs. Purchase

If we can be certain of one thing, it is that the pandemic wreaked havoc on many businesses and their business models. We tend to see government procurement growth during times of crisis. Once the media blasted us with headlines of medical device and personal protective equipment shortages, procurement officials found themselves in a precarious position. How to get supplies and get them fast.

Rick Grimm, chief executive officer of NIGP, the Institute of Public Procurement worries that procurements may slow down, now that shortages are being met. According to a brief from NIGP, “when skilled, professional procurement is buried within an organization and disconnected from the decision-making process, key business opportunities efficiencies and full value for money may be lost.” (Route Fifty May 7, 2021)

We witness the word “purchasing”  being substituted for the more comprehensive term “procurement.” Many believe this field should cover a broad scope of activities such as developing suppliers, strategizing to enhance supplier relationships, actively managing acquisitions and supervising contracts, and evaluating supplier performance. (ibid)

State governments made great inroads with suppliers during the pandemic. Many incentivized the private sector. In Maryland, where weapons systems are made for the Department of Defense, producers pivoted to make ventilators. Hand sanitizers were also retooled and made locally. (ibid)

The challenge to governments was understanding how vendors could best be utilized. There was no way to work with overseas manufacturers. Local product lines were evaluated and swiftly shifted. (ibid)

What does the future hold? Hopefully, the speed of procurement progress over the past year will not be in vain. Grim stated, “leveraging the value of procurement in achieving the government’s mission, helps you achieve those goals and becomes procurement’s mission as well. The big challenge, still, is getting the bosses of procurement to understand its strategic value.”(ibid)

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