The structure of council procurement

The procurement process within councils is embodied within a structural rhetoric that is sitting as a barrier to effectiveness of e-Tender within the procurement department, the business unit user level and financial accountability at executive level. Rhetoric is considered the constant verbal activity to develop shared understandings through the persuasion of individuals to contribute to collective purposes, the type and sequence underpinning framing strategies (Barrett, Heracleous & Walsham 2013; Green, J & Sandy 2004, p.654). The structural rhetoric is a debate aimed at justification for the rhetorical position of the procurement department as a centralised, centre-led or decentralised structure. The structure of the procurement department is a control mechanism over the procurement process, principally through the regulation of both statutory requirements and the provision of procurement policy and procedures of the individual council.

The case studies provide two examples of business unit users, Alpha 4 and Charlie 4 who have assimilated a TMP at a decentralised level while at the same time reliant on the procurement department for professional advice, a centre-led model. Council Alpha has contemporary policies and procedures available to business units and the general public (published on the council web site) as required by the SA LGAct, a centralised action. Council Charlie has a rhetorical position of procurement policy and procedures which provides legitimacy for the council and the executive, documents that could not be

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produced. A summary of the structural rhetoric of each participant council is provided in Table 33 with full detail in Table 34.

Table 33 - summary of structural rhetoric of procurement department

Council Structure Comment

Alpha Centre-led and centralised

Co-ordinating rather than actually doing it (procurement – sic) Bravo Centre-led Clear lines of responsibility, clear segregation of duty

Charlie Decentralised Probably doesn’t quite make it decentralised Delta Centre-led Sort of landed on centre-led

Echo Decentralised Fully decentralised but will not work in this environment - ever Foxtrot Centralised Bulk of procurement centralised, some are co-ordinated next and

parallel

Golf Not

distinguishable

The three golf interviewees commented on structure in this order – decentralised, centralised, centralised, centre-led, may seem decentralised

The structural rhetoric as a barrier to any form of effectiveness in council Echo is demonstrated by the executive requirement for decentralised electronic procurement resulting in two failed attempts and a third attempt at implementation not gaining any traction. In the words of Echo 1, ‘decentralisation will not work in this environment – ever’. Development of a procurement structure and process as a one-model-fits-all paradigm, is unlikely to work (Uyarra & Flanagan 2010, p.123) and is not an aim of this research project.

The LGA in each of the three states provide draft policy and procedures templates for consideration by councils. This research project recognises the individualism of each council and is using a generalised approach to understanding council e-Tender through a TMP. The structural rhetoric needs to change to an open structure where all elements of the council procurement process can interact to achieve the value of community

expectation. Charlie 3-2 states ‘the community would expect anybody who spends money in this organisation would spend it in full knowledge of all the procurement requirements, the probity’. The need for structural rhetoric is recognised by councils Bravo, Charlie and Delta through the introduction of the concept of business partnering. This concept is already assimilated into council Alpha and referred to as a project management framework, ‘a process undertaken by a project team and the procurement group is involved in the procurement process of the project’.

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Table 34 - The confusion of centralised, centre-led & decentralised

Council Structure Preferred or reasoning

Alpha Alpha 1 - We have now gone as a result of the year of

procurement to a centre-led and the centralised model

We are responsible for policy, development processes, maintenance of templates, maintenance of pre-qualified – basically a co-ordinating rather than actually doing it Bravo Bravo 2 - Initially it used to be a

decentralised model. We moved to a centre-led model and merged the function with the finance team

The centre-led model we have now, it’s very clear lines of responsibility, we ensure very clear segregation of duty – clear lines of responsibility and clear lines of control

Charlie Charlie 1 - We decentralised here really. The Business Units own the spend and they own what they require

Charlie 2 - At the moment we have to tick the box which says that if you're requesting quotes before you actually approach the market, before you can release it to the suppliers, it comes to someone like me who then has a look at it and I say Yeah, I think it's okay and it goes back. Then they send it out. So that quite probably doesn't quite make it fully decentralized

Delta Delta 2 - I think at the moment we sort of landed on the terminology of centre-led, but we are still sort of working through it

Centre-led. And that's sort of an undefined term if you like - it's been understood more in terms of where is the policy and the principles are driven by vs. enabling the organisation to get on with the business. I think what's happened is it's been far removed. So you've potentially got people who are then, it's about the Act, it's about the control, it's about the governance without acknowledging what the business has got to run. So it's that enabling the business partnering side of it it's probably been the missing piece.

Echo Echo 1 - The model is fully decentralised – we are charged with providing the tools, the policy and framework for the officers to then go out and do the procurement or tendering themselves

It’s a fully decentralised model, it shouldn’t be coming through a centralised unit such as it’s doing now The decentralised model will not work in this environment - ever

Foxtrot Foxtrot 1 - I see it as centralised, to an extent, the bulk of

procurement is centralised, there are some major projects, usually infrastructure, that are co-ordinated, next to and parallel to the central model

We are actually reviewing the model that exists at the moment to see if we can make improvement – the one council is potentially delivering two messages to industry, centralised to a vast extent and major projects

Golf Golf 1 – Decentralised is my favourite, it encourages, a broader professionalism, my idea is for engineers to be responsible – I am ok with centralised procurement as long as it’s there to provide a service and not a bloody hindrance

Golf 2 - You have to be centralised if you are going to have multiple panels. We are centre-led from our finance department – the historic subject matter experts all sit in the engineering area – other areas maybe centre-led, but because of the expertise all sits in a project’s base, it may seem decentralised

Golf 3 – centre-led approach so we don’t tell people how we’re not the police, we’re there as an enabler, we provide tools and knowledge on how to procure things better so each staff member is responsible for their own procurement or business unit

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Business partnering is a strategic action, a framework for council procurement,

transformation from structural rhetoric and does sound like a one-model-fits all paradigm.

The current structural rhetoric exhibited through the seven councils displays a number of weaknesses, barriers to the effectiveness of the procurement process to which meaningful strategic guidance can have an impact. Business partnering is a framework in operation at council Alpha and Bravo and is a proposal for generalisation into Australian councils.

Table 35 - The outcomes of current structures

Operationalisation Facilitation Barriers

Structural rhetoric Business partnering as a collaboration

An executive strategy to understand the value of procurement

Higher level of responsibility Procurement to provide quality policy and procedures across the e- Tender operations

Council experience as the professionalism factor Procurement as a financially

accountable discipline

Obligation to deliver value to community

Legitimacy is sitting behind the rhetoric – in council you cannot fail

Bold is the summarise outcome – the themes that fall naturally into explanation