copy the linklink copied!5. Looking ahead: Scenarios

This chapter outlines three co-created scenarios for the Slovenian public sector designed to influence the procurement system, based on the core priority clusters described in the previous chapter. These scenarios were co-created and tested together with Slovenian stakeholders. Examination of these scenarios allows for exploration of recommendations and different solutions, as well as analysis and stress-testing of their potential effects. Policy solutions often introduce both foreseen and unforeseen outcomes and the scenario approach helps to prepare for these in a more holistic way. These scenarios were co-created and tested together with the Slovenian stakeholders in October 2019. The scenario approach does not imply that any of the presented approaches represents a blueprint for change, but they can help to identify the ambition and strategic intent for reform.

    

Systems are difficult to grasp, and systems change is especially difficult. Where should decision makers start when everything is connected to everything else? To help ground systems interventions in reality, the OECD deployed a strategy called scenario building.

Scenario building is an analytical exercise that constructs narratives of current and historic trends and events, within a certain context, in order to describe possible future trajectories. The aim is to identify possible paths towards a specific vision of the future. In systems analysis exercises, scenarios avoid linear, reductive solutions and, instead, look at the system as a whole. This does not mean that scenarios can predict all possible forms of the future; rather, futures exercises and analysis of systemic effects of reforms should be continuously repeated to analyse unintended effects and new possibilities.

Scenario building asks a key question: “What possible sets of solutions can be combined and developed to change the functioning of the system?” At its core, scenarios, first and foremost, provide a critical outlook on the future. This future framework clarifies the main focal issues and strategic decisions that different organisations face within the system, and establishes interrelationships between critical decisions and their time horizons. The aim of this exercise is to provide clues about important drivers of change, early warning indicators, and strategies that may be sufficiently robust to deliver the desired aims in the face of future challenges. None of the scenarios are intended as predictions or prescriptions; instead, they function as prompts to think about the future direction of the system, and are designed to challenge existing, often unstated, assumptions about how events will play out. This approach helps to validate plans and readiness in the system by identifying four key aspects:

  • what is probable (likely to happen)

  • what is possible (might happen)

  • what is plausible (could happen)

  • what is preferable (want to happen).

The following sections present three scenarios. The first represents a continuation of the current approach (Scenario “zero”); the second introduces a significant driver for change that incentivises a range of new policies or interventions (Scenario 1); and the last embodies a radical shift in policy that prioritises procurement throughout the government’s strategic activities (Scenario 2). All scenarios are complemented by “wild cards” – low probability events – that may challenge the scenario trajectory and help uncover areas where the system needs to develop greater resilience.

copy the linklink copied!Scenario “Zero”: Continuation of the current trajectory

Overview

Under this scenario, the procurement system in Slovenia maintains its current trajectory. The government continues to bring out procurement in Coalition Agreements, with the goal of investing more funding in the transparency and efficiency of the system. More tasks are itemised and a digital audit trail for the procurement system is developed. E-signatures are incorporated into the system and digital systems inoperability is approved and completed. The government has more data to analyse bidding behaviour and the performance of procurement authorities more accurately. Small irregularities are detected, that lead to amendments, corrections or additional clarifications; however, no systematic bias or cases of corruption emerge.

The government discusses the adoption of machine-learning techniques to develop a risk detection tool for the procurement process, in order to limit corruption and the number of procedural mistakes. The idea both gathers both support and opposition, but is ultimately dropped as the risks associated with developing the tool in an agile manner are deemed too high, and most experts are unable to say with a high degree of certainty whether such a tool would work in the current data context.

The procurement system is made user-friendly, freeing up time for procurement officers to attempt different types of procedures, although new incentives to promote uptake are not introduced and very few attempts are made to use procurement for wider socio-economic aims.

With the aim of professionalising the workforce, the government co-designs a programme with industry partners to help buyers obtain experience in the private sector. Concerns are raised in public about the potential for procurement officials to develop overly close ties with industry partners, but the government gives its assurance that data transparency would prevent any such inclinations. Substantial effort is put into programme communication to outline the substantive aims of developing procurement professionals in the public sector through exchange processes. Relative research is made available to show the importance of social capital as a strategic factor in enhancing the accountability of political institutions (Nannicini et al., 2013[1]). The programme also includes a forum for discussion among participants about future trends in innovation and knowledge about procurement and the exchange of good practices between public sector organisations and economic operators.

An innovative public procurement award is established to heighten the visibility of the procurement system. While the award process is well received and generates positive media coverage, the Ministry of Public Administration, which co-ordinates the process, struggles to find notable cases.

The Ministry of Public Administration tackles a key factor in innovation cited by stakeholders – the time and available resources to test new and innovative procurement methods – by undertaking a time study of public procurement to establish where and how much time is spent in the procurement lifecycle. In addition, working groups from communities of practice map out different user journeys across different sectors and types of procurement authorities. This allows the Ministry to propose standards, streamline helpdesk activities and propose further avenues for automatisation of the process. However, more innovative procurement methods fail to emerge, as the associated risks are still perceived as high, with few incentives to push for more strategic procurement.

Centralisation becomes a key priority within the Ministry of Public Administration. In order to save time and money, the government seeks to reduce duplication among smaller procurement offices with limited procurement experience and knowledge. This new strategy produces immediate benefits in terms of pricing and overall time spent on procurements, but increases the strain on the Ministry, which is tasked with organising and executing these procurements. Additionally, the smaller procurement authorities remain sceptical of the initiative as a result of centralised procurement, due in part because the central procurements do not always meet their context-specific needs.

The Ministry of Public Administration invests more resources in developing a hub of expertise to develop consulting services for government agencies for procurement projects and to test and develop innovative ways to buy technology. Particular attention is paid to competencies for the development of innovation in procurement. However, the hub cannot consult with all public procurement authorities and greater emphasis is placed on capacity-building programmes and the professionalisation of procurement officers.

Slovenia continues to lead in transparency of procurement systems (making publicly availably tender notices, evaluation criteria, award notices and contract texts), but other EU countries are quickly catching up.

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Box 5.1. Wild card: High-profile case changes the direction of the system

A large road infrastructure project utilising EU funding is carried out. A consortium of foreign companies with local Slovenian partners wins the tender. The tender is contested in the National Review Commission by several other companies, but proceeds as only small procedural irregularities are found. During project implementation, newspaper articles start to emerge implying an agreement between companies coming to tender at different times and potential bribes. No evidence for the former is produced. However, the political debate intensifies and calls to change the law emerge. After a long period of public debate, the government concedes to change the laws in order to intensify control of financial ties between companies. This implies new and intensive tasks for all procurement officers and significant changes to the IT system with high costs linked to the latter.

Source: OECD.

In the current route of the system one of the most challenging aspects is the potential of singular, high-profile procurement cases to challenge the system in its entirety and induce a process of legislative reform that does not benefit the system as a whole, but introduces new costs and administrative burdens to the system. This is described in Box 5.1.

Implications

The government builds an external legitimacy-oriented system with significant levels of transparency, but is vulnerable to unique and critical cases that can change the debate overnight. The lack of trust in the procurement system both inside and outside the public sector is not addressed. Incentives to use procurement as a demand-side measure for innovation and other socio-economic goals are not developed, as procurement officers consider the risk of more innovative public procurement or the use of more innovative means to be too high. Trust between different players in the procurement system – including procurement officers, policy makers, technical experts, auditors, NRC, journalists and the public – remains low.

copy the linklink copied!Scenario 1: Creating a sandbox for testing different governance arrangements in procurement processes

Overview

The Ministry of Public Administration decides to test and trial new working methods. Recognising that they need support from both policy specialists and procurement officials, the Ministry decides to develop a community of strategic procurement specialist first, and then propose a potential test space for more innovative procurement processes. The Ministry calls together a community of practice of procurement professionals to first and foremost co-design an experimental space for innovative procurement, although other topics are also proposed for different working groups of the network.

The community also attempts to trial a free agent programme in which procurement officials temporarily help out organisations with tenders when specific expertise is needed or the authority is overloaded with tenders. Through the communities of practise, the central co-ordinating body, the Ministry of Public Administration, is able build more trust in the system and also push for more widespread use of framework contracts and modular development in order to encourage SME participation. The group also undertakes in-depth market consultation activities in some core areas identified by the government and conducts an analysis of joint or collaborative procurement actions.

After a period of co-design and communication around the initiative, the Minister backs the effort and beings it to a cabinet session, where several ministries decide to participate. The interest of key players including the Ministry of Economic Development and Technology, the Ministry of Labour, Family, Social Affairs and Equal Opportunities, and the Ministry of Infrastructure results in the initiation of a procurement sandbox. The sandbox does not aim to test radically new forms of procurement for which a regulatory experimentation space would need to be created, but instead aims to build and test supporting governance systems for procurements types rarely practised in the country. These support systems and innovative procurement methods are tested by carrying out pilots and demonstration cases for procurement processes new to the country. To support this effort, an overall community of procurement experts within the system is assembled. The National Review Commission and auditors contribute to the design of the sandbox as part of expert working groups, and journalists are invited to follow the initiatives. The National Review Commission and auditors serve to provide legitimacy to the sandbox and help ensure that it follows the necessary rules, but both organisations preserve their independence by only participating in the design stage to test new forms of procurement. The procurement sandbox is used to bring different experts together from across the system around innovative public procurement.

Lessons learned from the process are presented at procurement community meetings, and the control agencies, including the National Review Commission, commit to developing easily accessible preventive procurement guides for non-traditional procurement projects. The communities of practice facilitate the diffusion of lessons from appeal bodies, and provide an opportunity to gather feedback for the National Review Commission on how lessons from their decisions could be best presented and communicated. However, the possibility exists that failures within the sandbox could derail the initiative (Box 5.2).

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Box 5.2. Wild card: An early failure in the sandbox overshadows all other projects

While two of the three major demonstration projects in the procurement sandbox go well, one project stalls due to lack of expertise in Slovenia to tackle a key issue. The sandbox members decide to proceed with the procurement regardless, in the face of strong political pressure to complete the projects. As the procurement scale and scope is not that large, only a few international bidders come to the tender and there is a general consensus that the Ministry may not identify a provider that meets its needs. As a result, the Ministry cancels the tender, but one of the international companies involved in the tender complains to local journalists about their experience of dealing with the government. The ensuing negative media coverage is not significant, but taints perceptions of the sandbox among politicians.

Source: OECD.

Implications

The government decides to invest in internal demonstration cases to prove that innovative approaches to procurement are possible. Yet, the success of the sandbox is based on too few cases, thus, not fully understanding and managing risks or understanding factors for success or failure. As a result, the approach is highly vulnerable to the success and failure of single projects and, based on these, other ministries will decide whether they want to be involved. High-profile cases are also deemed vulnerable to changes in government coalitions, if the efforts are not accompanied by attempts to build capacity within the system. Furthermore, the procurement sandbox will not be possible without a community of practice and buy-in from key stakeholders. The mechanism should include a way to encourage administrations that tested new approaches to promote them to others.

copy the linklink copied!Scenario 2: A radical shift in the procurement system

Overview

The Ministry of Public Administration and the Ministry of Finance decide that in order to maintain a leading role in procurement, they need to invest more heavily in the system and develop new tools and methods to innovate. To this end, the Ministry of Finance devises an incentive system for government offices decreeing that 15% of all procurements have to follow an innovative approach. Additionally, if organisations save money on their planned project during the financial year, they can carry over the funds and use them for either capacity building or innovative procurement projects. Needed regulatory changes follow and the system takes effect.

In the meantime, the Ministry of Public Administration develops a toolbox and a capacity hub to help procurement officers within the system carry out procurement experiments. It also plans a programme to evaluate efforts, reporting twice yearly about successes and lessons learned from these projects in Slovenia and outside. The international procurement community takes notice and international companies (especially start-ups) increasingly demonstrate a willingness to tender bids in the country.

However, the majority of contracting authorities fail to reach their goal of 15% in two years, and the government reconsiders its approach. It selects a couple of priority policy areas as missions where innovative procurement ideas can be put into practice and innovation procurement can be adopted more thoroughly. One of these areas is sustainable development. In these areas, the state decides to establish a competence centre together with the Ministry of Public Administration and the Ministry of Environment and Spatial Planning. The centre aims to work across different levels, targeting contracting authorities at the national and local level. However, the new processes may add pressure to the system (Box 5.3).

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Box 5.3. Wild card: Radical increase in turnover of procurement officers

The reform of the procurement system is implemented and the demands on procurement officers increase substantially. These include taking more risks and – together with the Ministry’s hub – carrying out new types of procurement. While people working in the field view this as a positive change and are excited about the process, both stress and on-the-job demands mount. While the Ministry of Public Administration and Ministry of Finance try to keep up by proposing a raise in wages for officers and more funds to hire new people, procurement officers slowly start to leave the public service, increasing annual turnover to 30%. The system struggles to find alternative talent to take their place. Younger people are more inclined to accept positions on the basis of the recent innovations, the importance of the job and the increased wages, but lack the necessary experience or capabilities.

Source: OECD.

Implications

The government has undertaken an ambitious strategy to make the procurement system world class, but failed to take fully into account the strain on the traditional system during the transformation process. While the ministries involved prepared for the need to adjust the capacities of procurement officers, the change was very fast requiring behavioural shifts, and on-the-job effects of the reform were not taken systematically into account. In order to undertake this type of ambitious reform effort, all contingencies should be assessed and resources made available to deal with unforeseen issues during the change process. The responsibility for this process cannot rest solely with the Public Administration, and must be spread across the system.

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