Efficient and effective procurement for municipalities

About the VNG: The Association of Netherlands Municipalities (VNG) is the advocacy organization and knowledge platform for all Dutch municipalities. The goal of the VNG is to unite the strengths of municipalities and collectively act in the interest of local government and its residents.

The impact of the knowledge center on municipal procurement strategies

On an annual basis the 342 municipalities in The Netherlands buy approximately 40 Billion Euro in goods, services and (public) works. This is 48% of the governmental procurement volume. VNG Realisatie, part of the Vereniging van Nederlandse Gemeenten, assists municipalities to gradually increase the buying scale to more collective buying. This leads to an increase in buying power and can deliver significant benefits such as lower costs or higher quality. Our program- and interim manager Björn van Rosengarten has managed this process.

From project structure to procurement organization

Municipalities used to cooperate with each other through ad-hoc projects. The advantages of collaboration sometimes were sometimes unclear or apparent. This is unfortunate because collective buying can deliver many advantages on knowledge sharing, quality and cost. So how could VNG Realisatie best explain and facilitate this process?

Our interim manager Björn was asked to participate and manage this process. Under his leadership the ad-hoc project structures have made way for a permanent procurement organization. Alongside the procurement organization Björn set up a central center of knowledge where municipalities can get advice and information and where they can collaborate. In this case he reflects on the challenges, the approach and the results of the collaboration with VNG Realisatie.

Result at every level

• Municipalities boost their buying power and achieve better buying terms & conditions.
• Businesses experience streamlined processes and standardization.
• Inhabitants profit from more sustainable and effective use of public funds.

A solid base for collective procurement

Björn started out at VNG Realisatie by managing large, collective procurement projects. “The process was fragmented and time consuming, especially because many municipalities had to be convinced. Fairly quickly the question arose whether this could not be set up in a different way. Together we had a lot of knowledge on procurement and tendering. How could we make this available in a smart way?”

During a discovery with all the different stakeholders the idea was born to set up a center of knowledge. “Rather than offering collective procurement processes we wanted to help municipalities to bundle their buying power. Consultation based on content rather than just matching supply and demand.”

Over a period of two years a solid foundation was created for the center of knowledge. “We now have a dedicated team of specialists. They research the opportunities per sector, determine the ambitions with the different municipalities and consult on collective procurement projects.”

Listening, confronting and deciding

Despite the positive results there have been challenges. It was, for example, a significant challenge to create a collective mindset between the hundreds of different municipalities, explains Björn. “Each municipality has its own policies and ideas about procurement. It was our job to connect their needs and emphasize the benefits of collaboration. Sometimes a collective purchase was not the best option. I made sure that all involved parties understood what the consequences of their choices were for their own community, for example for local businesses and inhabitants.”

It was also necessary to create a balance between the different interests and priorities. “An association like the VNG is risk-averse by nature. Open conversations are crucial even if that leads to confronting questions. These questions I ask at every level: from IT staff to senior officials. I showed patience and understanding to show the benefits of the center of knowledge but choices had to be made to achieve the way forward. I made sure there was a common understanding for these.”

Reflecting on the process Björn is proud of the result. “The center of knowledge is an important step towards a more sustainable and effective procurement strategy for Dutch municipalities. It is a great example of a long term solution with societal impact. The kind of project I like to do!”