A holistic approach to deal with complex public procurement issues: a call to action
by JAVIER CARRASCO, NATO C3 Agency
This article describes a new methodological approach to designing solutions for complex public procurement problems
Main points
•Our conscious ‘logical’ thinking likes simplification as it makes it easier for us to rationalize the complex reality with which we are confronted — this in turn can lead to poor decisions.
•Too often, we fail because we focus on parts of the problem and fail to see the whole picture. We must understand the interrelated components and study it in its entirety — this requires a holistic approach.
•The first step is to build a conceptual framework to study public procurement systems.
•Such a conceptual framework will assist with the development of system models through the combined use of qualitative research and systems thinking techniques.
•Models will be built for each process for which remedial action is planned so that all the complexities associated with the sub-system or process are properly considered and addressed.
•Resulting models will contribute to a deeper understanding of public procurement issues and facilitate the design of sustainable solutions to improve public procurement processes.
Social psychologists show us that the limitations of human thinking explain the simplistic view that we usually have about the world — our conscious ‘logical’ thinking likes simplification because it makes it a lot easier for us to rationalize the complex reality with which we are confronted. Psychologists, like Greenwald,1 have provided quite sensible explanations of these kinds of mental self-deception mechanisms which make us avoid realizations that create unpleasant feelings, such as not being able to easily understand a complex issue.
However, experience also tells us that this is a defense mechanism which often leads us to make poor decisions. Consider, for example, the many organizational change initiatives that fail because those responsible for bringing about change actually ignore the complex human, technical and organizational interdependencies that will be affected by the intended transformation.
These failed initiatives originally may have been convincing business cases, well aligned with the strategic goals and values officially enacted by the organization. But they failed to address all the relevant psycho-social aspects. This is so because these ‘soft‘ aspects are complex and difficult to measure, therefore, unconsciously, we try to avoid them by understating their relative impact. In this way, we can put them aside and focus on other aspects with which we feel more comfortable. This instrumental bias makes us overlook crucial organizational and human constraints that will frustrate any attempt to change an organization unless we take care of them properly.
For many years, the theoretical approaches traditionally applied to the management of public procurement processes have not been exempted from this bias.
Do we really understand the complexity of public procurement?
Those of us who are involved in government contracting often share the perception that public procurement processes suffer from a series of longstanding deficiencies which appear extremely difficult — if not impossible — to fix. We witness governments striving to address some of these problems with new policies or costly organizational changes, and we have also seen some progress, but we are still troubled by the feeling that these changes do not come quickly or completely enough.
Some of us may even have particular ideas to address the various issues, but, too often, we focus on parts of the problem and fail to see the whole picture — we are perplexed by the way things are but we don’t make a comprehensive effort to understand why they are like that.
With limited knowledge about the complexity of public procurement processes, can we really be sure that policy or organizational changes will produce the intended outcomes?
Adopting a holistic approach through systems thinking
A system is a purposeful collection of interrelated components that work together to achieve a particular objective. Public procurement policy, public officials, industry and public contracts are just elements of the public procurement system.
If we want to understand this system so as to be able make decisions about what changes should be implemented to take it into a new, improved state, we must understand the interrelated components and study it in its entirety. This requires a holistic approach. There are several techniques available to do this. They can be implemented in isolation, but the most powerful approach is to combine several compatible techniques into a single line of research. This is something that can be achieved through the creation of a multi-disciplinary research group of both researchers and practitioners. Such a group should preferably be multinational in composition and take a global perspective so as to be able to address cross-national comparative issues and other factors, such as procurement systems of international organizations (for example,, the UN).
For obvious reasons, IACCM would be perfectly positioned to host such an international and multi-disciplinary research group.
In the initial phase, this group would focus on the following two areas:
the development of a public procurement conceptual framework; that is, defining the boundaries of the systems, identifying their generic constituent elements, and understanding how they function; and
The development of system models through a combination of systems thinking and qualitative research methods, such as case study, grounded theory and ethnography.
As system models are developed, solutions could start being tested. These solutions would take into consideration the various connected elements, how they make up the system and the estimated rate at which changes would generate the desired effects. These models would focus on practical outcomes. In subsequent phases they might be used to develop research projects with a stronger emphasis on the generalization of theories and the generation of wider scientific knowledge.2
Developing a public procurement conceptual framework
The first step to build a conceptual framework that can be used to study public procurement systems is to define the meaning of the term ‘public procurement’ — analyzing the type of entities that are part of the system and the type of activities within the system.
Developing a public procurement conceptual framework would also entail:
drawing conclusions about the main common features of the entities and activities which are considered to be part of the ‘public procurement’ concept;
analyzing the procedural aspects associated with term ‘public procurement’ (for example,, identification and analysis of similarities and dissimilarities with respect to private or commercial procurement processes);
identifying and analyzing the principles and goals underpinning public procurement (for example,, transparency and competition); and
analyzing the casual and intervening relationships between the various conceptual elements uncovered through the above activities.
The outcome of these activities eventually would be synthesized into a conceptual model which would define the boundaries of public procurement, its constituent elements and their interrelationships.
Development of system models
Such a conceptual framework would assist with the development of models for more effective public procurement systems. Models should be built for each process for which remedial action is planned (for example, the source selection process of a specific contracting agency), so that all the complexities associated with the sub-system or process are properly considered and addressed.
Qualitative research methods would be used to identify the various elements and relationships that make up the system. These methods have the following distinctive features.
Research is performed in the field, requiring researchers to spend considerable time in the locations under study.
Multiple qualitative techniques are used for data collection and analysis (for example, interviews, group interviews, direct observation, and analysis of correspondence and documentation).
Key elements of the strategy, like the selection of cases and the data collection methods, evolve with the research through an iterative thinking process.
Complex reasoning is used — both inductive and deductive processes are applied.
Although formalized methods are used for developing theory and drawing conclusions, research is essentially interpretive. Results depend on the integrative powers of the research team.
The phenomenon under study is analyzed from a holistic viewpoint.
Conclusion
Qualitative strategies of enquiry permit us to properly answer research questions like the ones required to understand how a system works (the ‘How?’ and ‘What?’). These methodologies allow the researcher to explore the various meanings associated with human actions by the individuals and groups involved in a given activity, and, in this manner, the researcher is able to understand the way the various system elements interact to produce the observed system outcome while accounting for the many dimensions of human behavior.
The main output of this type of research should be a rich picture of system processes, which would provide the material required to build a complete system model like the one shown in Figure 1 below, which depicts the properties and interactions taking place in a hypothetical source selection process.
Figure 1. Sample of system model for a source selection process
Models like these can then be used to design end-state models and to determine what should be implemented for an effective system.
As more models are developed, certain common aspects and recurring system behaviors would emerge. These emerging patterns would allow the formulation of generalizations about the way public procurement systems work and, in this manner, serve as foundation for new scientific theories about the behavior of these and other socio-technical systems.
Javier has an extensive experience in public procurement gained in a variety of organisations such as the Spanish Ministry of Defence and the North Atlantic Treaty Organisation. He is currently working as Senior Contracting Officer for the NATO C3 Agency. Javier alternates his professional duties with an active involvement in research activities. He is about to complete a PhD research project on public source selection processes under the supervision of the University of A CoruÒa (Spain). Last year, Javier received the National Award ìJose MarÌa Fern·ndez F·bregaî from the Spanish Association of Purchasing and Supply Chain Management Professionals (AERCE).
Endnotes
1. Greenwald, A G ‘Self-knowledge and self-deception’ in Lockard, J S and Paulhaus, D L (Eds.), Self-deception: An Adaptive Mechanism? (pp 113-131) (1988) Prentice Hall, Englewood Cliffs, NJ.
2. Scientific knowledge is knowledge (for example, theories, explanations, and models) that has been generated through the use of generally accepted scientific research methods and meets certain criteria (empirical testability and logical coherence). One of the strengths of the approach proposed in this article is that it reconciles the interests of the professional and academic communities because its implementation to the solution of practical problems can serve as a foundation for true scientific research.
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