Closing the Gap in Indigenous Procurement – A Bridge too Far?

Indigenous Procurement Policy
Indigenous Procurement Policy – Delivering Value for Money
November 26, 2015
Low Cost Pricing Offers
Seven Tips for Evaluating Low Cost Pricing Offers – Too Good to be True?
December 9, 2015

Closing the Gap in Indigenous Procurement – A Bridge too Far?

Closing the Gap in Indigenous Procurement

Closing the Gap in Indigenous Procurement : A Bridge Too Far?

In the past week (December 2015) we were informed about the lack of progress of the Closing the Gap initiative. This program was started in 2008 and is a long-term initiative. In the initial phases one would expect progress to be slow; but surely after the seven-year itch, the steering committee must have an idea how to close the gap? The Indigenous Procurement Policy (IPP) was released in July 2015. Will the IPP suffer from the same lack of progress?

Is closing the gap in Indigenous Procurement, a bridge too far?

In Closing the Gap, the only area where progress has been made is in the decrease in mortality rates in younger children. In fact, not only has little progress been made in the other target areas but some areas such as employment went backwards. The IPP has the potential to play an important part in closing the gap. It creates the opportunity to grow, develop and nurture Indigenous Small and Medium Enterprises (ISMEs); it should increase indigenous employment.

The IPP targets  are quite moderate and should be achievable in the timeframes set. Almost six months have passed since the IPP release. Yet in Western Australia we have not seen much action. Will we see the same lack of progress on this initiative than with Closing the Gap?

In Western Australia we are very fortunate to have the Swan River. It snakes its way throughout Perth and surrounds. It has significant cultural importance to the Noongar people. We appropriately refer to the Swan River as the River of Dreams.

A number of bridges provide access across the Swan River. These days we accept those as normal and almost don’t realise what it took to build some of those bridges.

Closing the Gap in Indigenous Procurement

Closing the gap in IPP will require significant commitment no different to building a bridge.

The IPP sets the intent to close the gap in indigenous economic outcomes by public and private sectors working together.

However, any best intent without

  •  understanding
  • action
  • knowledge, education, training
  • a willingness to sharing of risk or even taking on some more risk than normal
  • a planned journey
  • a defined and accepted responsibility and accountability
  • a defined outcome

Will deliver no results, will not build a bridge and certainly will not close the gap.

One does not just build a bridge. The Causeway over the Swan River is a great example. What we see today, is not where it started. The original Causeway looked very different and had a humble start. It got built and rebuilt until it is in the state we see today. Today it is one of the main arteries and an important bridge.

Building a bridge is a journey.

In a nutshell, it starts with:

  • planning,
  • designing,
  • building foundations,
  • building the supporting and
  • reinforcing structures

and then only finishing off.

What we see in the end-result, is almost just the “tip of the ice berg”.

Often over time the structures, design and sustainability of a bridge get improved. Also, once we build a bridge, it falls apart without ongoing proper care and maintenance.

The IPP Journey

In terms of the IPP, the journey is not too dissimilar.

The IPP makes up the design and a start with the foundations. It does not build the bridge. It does not deliver the care and maintenance of the bridge either.

In order to be closing the gap in Indigenous Procurement and build the IPP bridge, it will require everyone to get out of our comfort zones and move away from the traditional manner of procurement. The inclusion of the value for money concept in the IPP is great but without training, assisting and leading procurement officers, contract leads, ISMEs and other stakeholders, the IPP bridge will have many false starts.

The role of Procurement

I don’t think the IPP will make it easier for Procurement Officers to do their job. The IPP requires an increased workload to do the recommendations and justifications. There is an increased requirement to find suitable capable ISMEs. It requires Procurement Officers to back up those ISMEs and that is a daunting task.

It will not make it easier for any one overseeing a job – it will require additional supervision and effort.

Contracts may eloquently pass risk onto the suppliers, including the ISME’s. In my opinion under the IPP, both the government agencies and the ISME should share the risk; especially in the initial phases.

Closing the IPP gap will require anyone involved to step outside the comfort of their offices and step into the shoes of an ISME. Walk a few steps in those shoes too.

Closing the Gap in Indigenous Procurement for ISME’s

What does it mean to step into the shoes of an ISME – especially some of the smaller or more remote ISMEs?

The ISMEs are faced with having to work out and understand:

  •  what is IPP

  • what is value for money

  • where they fit in

  • how to find the IPP opportunities

  • the requirements for providing an offer that complies and shows value for money

  • the requirements for connecting with the right Procurement Officer.

  • how to get in front of the right Procurement Officer.

  • what needs to be done to get an opportunity to grow and develop

  • which systems and processes to develop and implement.

  • the difference in cultures

  • contracts and much more.

It can be very daunting for ISMEs.

Value for Money

The Value for Money concept in the IPP is a great intent. If we do not share risk, why do it? In fact, it creates a bigger risk for the ISMEs.

No different to building the bridge, it will take teamwork. It will take a willingness to go on the journey together as a team.

One will not close the gap by building just one bridge.

Working together you won’t necessarily start of with build a massive bridge. You would look for smaller arteries where you could practise together building smaller bridges. Start small and then build big. Get to grow and develop.

If we approach the IPP in the same manner as all other procurement methods, I don’t think we will close a gap.

I think the bridge will never get off the ground.

It will collapse on the edge time and time again. Ultimately we want the ISME to be in a position where an ISME can commercially compete on the same level as other SMEs.

An outcome always involves a journey. Many stories fill a journey. It all starts with an intent, a dream or a crazy idea. And as normal I have one too.

Value for money allows doing the procurement differently.

 Why not create a dedicated IPP task force?

Not a commission to write up a white paper and blah blah blah.

Not only talking about doing but actually doing!

Why not create an IPP bridge building team that includes all of the stakeholders from government, private sector and the ISME space. A team with dedicated procurement officers, works supervisors and business coaches and mentors. Give the IPP team accountability and hold them responsible for an outcome. Don’t tie them down in government bureaucracy because then we will not close the gap but create an even bigger gap.

The IPP task force will find the right ISMEs, work together and build not only one bridge but many bridges.

 Lets work together in closing the gap in Indigenous Procurement to make sure that the IPP is not a bridge too far but a celebration of many bridges and many dreams coming true.

 


 

For more details on the Stories about the Swan River, please visit the State Library of Western Australia.

If you would know more about the IPP, please read here.

About Celia:

Celia Jordaan is a freelance procurement and risk consultant at Ichiban Commercial Solutions, Perth Western Australia. With over 19 years experience, Celia has worked in different countries, locations and cultures in the areas of procurement, supply chain, contract management, law and risk. She has also worked in the area of risk management, contractor management and safety.

Grab the free resources on Ichiban Commercial Solutions’ website and register for our monthly newsletter with procurement tips and invitations to future workshops.