Public procurement trends and outlook for 2022

The last two years of the pandemic, economic and social change have influenced operational changes across industry verticals including public procurement, a sector that prevailed through the trying times of the coronavirus pandemic, battling increased demand and supply shortages. As the industry adapts to the country’s economic developments alongside the constantly evolving state of the pandemic, we take a minute to look at the trends that we can expect to see in public sector procurement.

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The last two years of the pandemic, economic and social change have influenced operational changes across industry verticals including public procurement, a sector that prevailed through the trying times of the coronavirus pandemic, battling increased demand and supply shortages. As the industry adapts to the country’s economic developments alongside the constantly evolving state of the pandemic, we take a minute to look at the trends that we can expect to see in public sector procurement.

Embracing the power of technology

The number of companies that will implement digital tools and procedures into their operations is expected to drastically increase in the next five years. This will also be true for the public sector ecosystem as it simplifies procurement for both suppliers and the government agencies.

2022 is also expected to see staffing challenges as a large portion of existing workforce retires or moves out of public procurement, calling for greater need of efficiency as younger talent assumes office.

Moreover, with growing impetus on net-zero economy, green procurement will gain prominence in 2022 and beyond. As a result, we will see government agencies work with companies to accelerate public procurement decarbonization, making eprocurement solutions a significant help, enabling government agencies to track and optimize for greenhouse gas emissions.

Consider this: Data obtained in real-time and improved analytics have been recognized by industry leaders as being essential to breaking down and understanding business divisions that operate independently. With various departments of government agencies working autonomously, having a rapid, reliable and single source of data from procurement platforms and tools can help them reduce operation costs, improve decision making, correct procedural gaps, and enhance overall efficiency. This also stands true for suppliers, allowing them access to all contractual requirements and bids available in the ecosystem well within one procurement platform that is updated in real-time.

Increased focus on local sourcing and supplier diversity

Small businesses in local communities have always been an essential part of North American economies. Governments procure billions of dollars in goods and services annually from businesses in their regions. Many government agencies have goals and objectives in place to spend a specific amount with small, local businesses.

However, agencies that lack the tools to track diversity and inclusion goals and results are often at a serious disadvantage when it comes to gathering data about local and non-local vendor percentages, solicitation chances and response rates. E-procurement solutions with vendor management tools that can track communications and generate detailed reports are ideal and will help support this.

With that said, 2022 will continue to be a great year for significant local opportunities for a diverse group of small and medium-sized suppliers to develop strong relations with government procurement stakeholders. Regional supply chain needs will become a key factor in government agencies shifting their focus to locally sourced goods and services, paving the way for unique RFPs and exciting alternatives for businesses to partner with these agencies.

Larger supplier ecosystem becomes the key element

Alongside diversity and inclusion, access to a wider supplier ecosystem will continue to gain prominence this year. Influenced by plant shutdowns across the world and other supply chain disruptions, leaders in the procurement industry will have to quickly partner with large groups of suppliers in order to survive and meet their needs.

Strong relationships with the extended supplier universe have always been an integral part of the procurement process and it will become even more important in the aftermath of COVID-19. However, rapidly finding new suppliers and growing partnership networks will be challenging and time consuming for government agencies as they vet various RFP submissions and compare vendor rates and services. Procurement solutions that give these agencies access to a large number of suppliers allowing them to compare their offering and rates in real-time will prove beneficial in this regard.

Taking advantage of government funding from 2021

Governments across the world introduced large waves of funding throughout 2021 in order to mitigate the potential consequences of global shortages and slowdowns.

Billions of dollars were allocated to states and municipalities by the 2021 American Rescue Plan Act. Large sums were destined to industries in construction, energy, transportation and broadband. The opportunities that arose from this bill are only starting to be seen.

The 2021 Infrastructure Bill, which aims to transform seaports, waterways, electrical grids, transmission lines, public transit systems and airports will continue to have a long-lasting economic impact on the procurement market well within the new year. Infrastructures will be rebuilt and regional economies will be strengthened thanks to this bill. This will allow for local economies to resume projects that were put on hold and to start completely new ones.

There hasn’t been an infrastructure plan of this scale and magnitude in the last ten years, hence why businesses need to take advantage of all the bill’s possibilities. To do this, companies need to familiarize themselves with every aspect of the bill. E-procurement solutions that allow professionals to manage their resources before bidding, provide intelligence on relevant contracts and projects, and gather important data are key and will help them derive this advantage.

Mark Eigenbauer is president of eprocurement at mdf commerce.

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