Strategic procurement planning and analysis
We expect that each public entity will have a thorough understanding of the:
type of procurement that it does;
value and risk associated with the procurement; and
importance of procurement to achieving its overall goals and business strategy.
A public entity should develop a procurement strategy if procurement is integral to achieving the overall business strategy.
Where procurement is not integral, a public entity should still be able to demonstrate:
a knowledge of the type, value, and risk associated with the goods or services it procures; and that policies and procedures are in place for those involved in procurement activity to ensure that good procurement principles and practices are adopted.
A public entity's relevant policies and procedures should include a strategic component that assesses whether procurement is sufficiently integral to the business strategy that it warrants a separate procurement strategy. To do this, a public entity will need to understand what it is procuring and how integral this is to its overall business goals.
Regardless of the size of the function, a public entity should know:
what goods and services it procures;
how much it spends by category type and also on individual procurements; its main suppliers and the volume and value of the procurements; and the main markets it procures in.
The public entity should include guidance in its policies and procedures on how it will develop and implement its procurement strategy. The guidance should cover:
who will have overall responsibility for procurement planning; who will be involved in the planning process and when they will be involved; and how the procurement strategy will be linked with the public entity's broader strategic planning processes.
If the procurement function is large, a public entity...
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