In a second ‘mini-round’ of ‘procurement tennis’, Pedro Telles and I are critically assessing the European Commission’s October 2017 package of communications on public procurement. We started with the ‘voluntary ex ante mechanism for large infrastructure projects’ (see here and here), and Pedro has followed with his views on the ‘recommendation on professionalisation’ (see here). I will also discuss this document now. In two following pairs of posts, we plan to discuss the consultation on guidance on procurement of innovation and the communication on 'Making public procurement work in and for Europe' itself. Watch this space.
Focusing on the recommendation on professionalisation, Pedro has raised important points about the limited effects that professionalisation (understood as training and career management) can have in the absence of financial and reputational incentives for procurers, as well as specific issues concerning the aspects of the recommendation that deal with issues that have no (or almost no) bearing with a discussion on professionalization—such as issues concerning environmental and sustainable procurement, e-procurement or anti-corruption measures. Pedro has also raised important points concerning the need to look beyond the EU in search for best practices, and the need to distinguish between exchange of experiences and exchange of best practices (that is, the need to create a filter to ensure that different procurement communities do not replicate erroneous or illegal solutions that seemed to work in a specific context).
I fully subscribe Pedro’s criticism of the proposal of the Commission and would go even further. There are quite a few aspects that can be criticised, both in the recommendation itself (which is unfocused, exceeds the scope of professionalisation (in particular in part III) and tends to simply state the obvious) and in the staff working document that accompanies it (which is sloppily drafted, breaks up and repeats examples in a way that comes to inflate their number, and has for no reason been published as a pdf with the promise of a future interactive online tool, rather than being directly in that format—for what was the rush?). They are both also fatally flawed by a lack of recognition of the real costs of training a procurement workforce, in particular in terms of the time and effort of those being trained (as indicated by Pedro, and as masked with the only example that contains costing figures, No 2, from Consip) and of the long-term strategies and measures that need to be developed. In this post, however, I will concentrate particularly on six issues that I consider particularly restrictive of any effectiveness of the Commission’s recommendation, which largely ignores them.
In my view, the main areas for criticism of the recommendations on professionalisation formulated by the Commission are: (1) that procurement is not different from other areas of public sector activity requiring specialist skills, (2) that skills (human capital) need to be recompensed and incentivised if the public sector wants to avoid capacity drainage and cross-subsidisation, (3) that increasingly complex systems and sophisticated procurement do not require ‘super-procurers’ but rather ‘teams of procurers’, (4) that language is a very relevant barrier, both for advocacy/awareness efforts and cross-learning, (5) that the Commission cannot pass on to Member States the hot potato of issuing procurement guidance, and (6) that any initiatives will not be implemented in the vacuum or in a blank slate, which requires both consideration of change management and competition neutrality. I will keep my comments on each of these points short.
(1) Procurement is not different from other areas of public sector activity requiring specialist skills
The recommendation on professionalization largely assumes that developing and retaining a skilled workforce is a particular challenge in procurement, and it only mentions customs clearance as an area with equivalent needs and with a previous experience meriting study at EU level. However, from the perspective of a Member State, resourcing procurement is not less or more challenging than resourcing regulatory agencies (competition, energy, telecoms, etc), oversight bodies (central banks, insurance authorities), entities with budgetary responsibility (courts of auditors) and a number of other functions (food control, patents, consumer protection, ...). Importantly, in several Member States, the systems are generally developed around a model of relatively generalist civil servants that then go on to specialise in specific tasks as they are called to particular positions. This has two big implications: one, that it will hardly be acceptable for ‘procurers’ to be trained, recompensed and supported in ways much different than those dedicated to other activities. Second, that the State will probably not be in a position to undertake a significant reform of its entire civil service (access, training and remuneration) in the short term. These are rather complex issues and it is not realistic to think that procurement can change much more, or at a faster pace, than general civil service reforms. Some (small) parts of the procurement workforce can receive a different treatment in the context of ‘private-form’ procurement entities (such as central purchasing bodies, or CPBs), but this can hardly be a general solution.
(2) Skills (human capital) need to be recompensed and incentivised if the public sector wants to avoid capacity drainage and cross-subsidisation
The recommendation on professionalization ignores the evidence contained in itself. I find it quite telling that both RESAH in France (example No 34) and BBG in Austria (example No 35), which is one of the CPBs portrayed as having been more successful in creating a training programme in the staff working document, indicate that they have significant retention issues, as their trained employees/ members are scooped by other entities. This echoes similar trends in other countries (such as Hansel in Finland and Pianoo in the Netherlands, although this is less clear in the document), and is a simple matter of common sense. Given that there is a general shortage of skills in procurement across the economy, if a part of the public sector invests in training in a context where retention is an issue, then it is simply cross-subsidising other parts of the public sector or, more likely, the private sector. Again, this is an endemic problem that has affected countries with strong systems of training of their public service and judicature (such as Spain) and the only way of trying to contain it is to impose statutory or contractual obligations to stay in post (not a great incentive, as demonstrated by levels of turnaround of employees having completed CIPS training in UK institutions) or to improve the working conditions (and pay) of highly skilled individuals (which is really difficult to do in an austerity context and, given what I mentioned above, the difficulty of making ‘exceptions’ for procurement).
(3) Increasingly complex systems and sophisticated procurement do not require ‘super-procurers’ but rather ‘teams of procurers’
In simple terms, the entire recommendation on professionalization is premised on the basis that, if sufficiently skilled/educated, individuals can carry out complex procurement satisfactorily on their own. While I will be the first to submit that an overall understanding of procurement processes and the business context in which it takes places is necessary, I do not think that sophisticated procurement (eg projects including elements of innovation or sustainability, or negotiations, or complex goods or services, or infrastructure …) can be carried out by individuals, however skilled. More and more, it is necessary to think along the lines of teams with complementary and interdisciplinary expertise. There is no such thing as a ‘super-procurer’, and the Commission and the Member States would be foolish to try to find her (or educate her). In that regard, if there are competency schemes that require developing (which is a big if), they should not be premised on individuality, but rather on team work and collaborative approaches. This will mean that teams of engineers (or technical personnel), economists and lawyers will need to be put together so that they can complement each. Some training to give them an overall understanding of what they are collectively doing will be necessary and helpful, but that is a long way away from expecting them to each master a sufficiently advanced knowledge of law, economics and technology.
(4) Language is a very relevant barrier, both for advocacy/ awareness efforts and cross-learning
The recommendation on professionalisation also ignores the fact that learning from others’ experiences and using others’ documents (technical, guidance or advocacy documents) requires, amongst other things, a sufficient knowledge of other languages—which are not necessarily English. There are very clear examples, such as the French vademecum (example No 55) or the Greek bid rigging guidelines (example No 53), which will be completely incomprehensible for a large part of the procurement taskforce of any given Member State. This will create difficulties more generally in any cross-border initiative, and can end up creating inadvertent language barriers and/or facilitating the prominence (if not imperialism) of practices created in native English-speaking jurisdictions, which is not necessarily a guarantee of success.
(5) The Commission cannot pass on to Member States the hot potato of issuing procurement guidance
The recommendation on professionalisation repeatedly stresses the need for Member States to provide guidance (see in particular recommendation 8), thus expecting them to ‘give legal certainty on EU and national law or requirements stemming from the EU’s international obligations’. Not to be blunt, but this is risible. The Commission, having so far been so reluctant and slow in issuing any guidance on the novelties of the 2014 Public Procurement Package, can hardly expect Member States to be in a better position to do so. And, even if that was the case, having each Member State issue its own guidance, based on its own interpretation of EU law and the requirements stemming from the EU’s international obligations is a recipe for contradictions and further legal uncertainty. This is precisely an area where the Commission has both a better position to issue guidance and (hopefully, at least) the relevant expertise. Of course, the Commission has included some soft promises for guidance as part of the broader October 2017 package (on green and innovative procurement, and remedies, which we will discuss in due course), but it would have been well-advised to refrain from recommending Member States to fill in the gap (even if only temporarily).
(6) Any initiatives will not be implemented in the vacuum or in a blank slate, which requires both consideration of change management and competition neutrality
The recommendation on professionalization does not take into account that in different Member States, there will be different structures in place (eg universities, private firms) offering capacity and training services, as well as consultancy services aimed at closing skills gaps, in particular in relation to complex procurement (law firms, consultancies, etc). There is a strong push, although rather implicit, for the public sector to create its own ‘knowledge centres’ and use them to offer the same type of services across the public sector. In particular, there is a repeated suggestion that CPBs can be in a good position to do so. Such recommendation ignores the fact that there will be issues of competition neutrality involved in such a practice (for example, the growing consultancy business of CPBs such as Hansel in Finland), which merits separate discussion at some other time. It also ignores that there can be difficulties around managing change where ‘new’ professionalisation and training initiatives are meant to replace previous structures. All of this could (and should) be addressed more explicitly in the recommendation. It is to be welcome that the Commission explicitly excludes the creation of ‘professional bodies’ in procurement, but this is only one of the potential negative impacts of the suggestions included in the recommendation from a competition perspective. Where Member States create semi-markets or public provision in liberalised (training and education) markets, a much more in-depth and careful assessment will be necessary.
I think that, for the reasons discussed here and in Pedro’s post (some of which, clearly, overlap), it is highly unlikely that, however well-intended, the recommendation on professionalization can catalyse a significant change at Member State level. It also masks a significant number of issues that have very limited to do with professionalisation and training, such as sustainable procurement, e-procurement or the fight against corruption, but I will save my comments on that for some other time. In my view, even if marginal improvements can result from Member States efforts as a result of these recommendations—particularly for those that build on a lower capability level—changes will be constrained due to budgetary and resource restrictions, language issues and inability (or unsuitability) to offer proper guidance. Rather than having the Commission engage in this type of ‘human resources consultancy’ activities, I would have it dedicate whatever resources it could muster to provide effective guidance and, where possible, to provide financial and logistic support to Member States.