Navigating Procurement and Contract Management in Local Government: A Sea of Uncertainty

With the theme of the Local Government Procurement conference in 2024 being “Create Ripples, Ride the Wave,” we look at how procurement and contract management in local government can be likened to navigating unpredictable and ever-changing seas. Just as sailors (and surfers) face varying tides, winds, and storms, councils in Australia are facing ever-evolving requirements and challenges when it comes to procurement, making it essential to get your processes “ship shape”.

One of the most pressing challenges that we continually hear about from prospects and clients is ensuring buyers remain compliant with evolving regulations. Like a shifting tide, the regulatory landscape can change rapidly for government, forcing procurement teams to adjust processes and strategies, while successfully communicating updates to their organisation.

With under resourced procurement teams taking on more responsibility than ever, ensuring buyers and teams adhere to procurement legislation, internal policies, environmental regulations and ethical sourcing requirements is no easy task. Procurement being involved in all buying activity is inefficient (and unrealistic) so, how can you overcome this recurring challenge?

Enter VendorPanel’s Guide tool which enables procurement teams to transform lengthy policy documents into simple workflows allowing buyers to input their criteria and receive specific purchasing advice.

Guide helps buyers go to market the correct way, depending on what they are buying, the cost threshold, risk-level and other organisation-specific factors. Buyers remain compliant, while working autonomously, by navigating through the easy-to-follow steps, with the platform providing instructions specific to the procurement task they need to undertake.

Budget constraints and cost management, much like unpredictable waves, can cause issues for even the most seasoned professionals. Balancing cost-efficiency while maintaining quality and ethical standards requires careful navigation. This is further complicated by fluctuating exchange rates, increasing costs of goods and services and market volatility, which can significantly impact procurement.

With local government it’s necessary to prioritise value on procurement spend, given that it’s public money being spent. But how is this accomplished when procurement has so many competing priorities?

VendorPanel’s Go to Market module allows your organisation to manage all quote-based sourcing, from simple RFxs to complex tenders, in one place. Buyers get an easy-to-use toolset built on standardised, transparent and best practice processes, while you get the oversight and audit-ready reporting you need.

In addition to improved efficiency and reportability, Go to Market enables increased value across all activity done through the platform. With an average cost-avoidance of 9.74% on spend, procurement teams can actively see and report on improvements.

Building and maintaining strong supplier relationships can be likened to navigating through narrow, rocky channels. It requires oversight, skill and constant communication., This is much like contract terms between a buying organisation and supplier – one wrong move and the repercussions can be significant.

So, how can you get a better handle on the complexities of supplier management?

With VendorPanel’s Go to Market solution we help simplify supplier management through easy onboarding, list creation, preferred supplier lists, and automated reminders to suppliers to update compliance and insurance documents. Additionally, communications related to an RFQ can be tracked on the platform, ensuring visibility and avoiding siloed conversations.

Additionally, in VendorPanel’s Contract Management (Advanced) module supplier communications, KPIs and milestones can be logged, tracked and reported on to main project visibility and accountability.

Supply chain disruptions are another significant issue for procurement teams, like sudden storms that can catch sailors off guard. With Australia’s reliance on international suppliers, everything from natural disasters, trade disputes, and geopolitical tensions can disrupt delivery of goods and services, leaving procurement teams scrambling to source necessary materials and meet contractual obligations.

NSW State Government has recently implemented mandatory local supplier engagement on all procurement projects valued over $7.5million, with agencies required to justify why they went with a supplier outside NSW, if they did. This suggests it may not be long before NSW councils are also given similar procurement mandates.

So, what can be done to discover suitable local suppliers?

With our Marketplace of over 70,000 suppliers, buyers can discover and engage with suppliers from within their LGA and even report on spend from specific postcodes. On top of this, you can share lists with neighbouring councils to access their pre-qualified local suppliers, while maximising value on spend through economies of scale.

In these turbulent seas of procurement and contract management, staying agile, forward-thinking, and being prepared for when the winds change is key to success.

VendorPanel can help navigate you in the right direction, so if you’re ready to learn more about any of our Source-to-Contract solutions or how you can upgrade your current access to our full enterprise, please get in touch today.