Today more than ever government must be good stewards of tax payer dollars; ensuring that we only procure goods and services when needed, and being wise about what and how we purchase. At $500B, the US government is the largest purchaser of goods and services in the world, and yet we can do more to leverage our collective buying power and our collective intelligence to be smarter. This post will focus on rethinking procurement through open peer review and a second post will look at cooperative purchasing.
The goal of procurement is noble: ensuring that we are wisely spending tax payer dollars; yet our approach often has the opposite effect by introducing significant administrative overhead and time without actually being smarter about purchasing. This investment in time and process would be worthwhile if we were optimally purchasing goods and services; however, the lack of access to tacit knowledge by many of the actors in the procurement process diminishes the ability to correctly make decisions.
The current approach to procurement is layers upon layers of review and approval. A typical procurement process might look something like this: your manager reviews your purchase, then your division manager, finance manager, CFO, department director; then it leaves your agency to head to your central purchasing agency which goes through several rounds and of course your union wants to make sure that existing staff aren’t adversely affected. During all these reviews who actually understands the nuances of your purchase? Perhaps your manager and one other person does. What we need is the collective intelligence of the organization to determine if this purchase is appropriate; not just administrative staff who often know little about the specific purchase. In academia, the concept of peer review is a common practice to ensure that an academic paper’s suitability for publication. We simply need to shift the subject area from scientific papers to purchasing to see that this approach can be used to determine the suitability of a purchase.
Technology plays an important role to ensure that peer review is open and utilizes the collective intelligence of our communities. Technology helps achieve the scale required to introduce a distributed and open approach to peer review of the actual purchase that wouldn’t be possible otherwise. Imagine a system where experts or non-experts could subscribe to specific topic areas like public safety and get notified of new purchases so they can provide comments, vote, and other signals to provide additional information to the traditional actors in the procurement process. This approach keeps the current process intact but provides invaluable tacit knowledge to each of the actors so they can make better decisions. Surfacing the collective tacit knowledge of an organization is critical to helping government recognize if and how we should purchase goods and services. As we face ever growing fiscal challenges, the need to actively experiment with government procurement through open peer review, cooperative purchasing, and other approaches has never been greater.