Common sense is more common than you think
Updated: May 4
Procurement Network interviewed Levon Hovsepyan, seasoned public procurement expert with 20 years of focused international experience in world's major organizations.
Is procurement a science or an art?
That’s a tricky one (smiles). It’s like the "chicken or egg" question.
When you draft procurement laws for governments, policies for multinational corporations and international organizations, you feel it is a science. When you make world’s best companies compete against each other, and then you negotiate the price with a Fortune 50 company and reduce it to almost half, you understand it is an art. But when you deliver an anti-mosquito bed net to a boy in sub-Saharan Africa, or a book to a girl in Latin America or when you help the whole country shift to green energy, procurement becomes a passion.
What is more important in procurement management, integrity of the process or satisfying Client’s needs?
It is important not to have these two things crossing and conflicting. It is important to deliver up to Client’s highest standards and to keep the absolute integrity of the process. And that’s what the mission of a procurement professional is. Procurement officer should be a forecaster. S/he should see all the challenges coming and should duly and timely work with clients for mitigating the risks. Of course, this skill comes with years of procurement practice, buying different types of products and services in various corners of the world. It is absolutely instrumental to accumulate knowledge with every single tender. Every solicitation process should be a lesson to learn.
What is the role of public procurement in economic development?
Vital, but undervalued. Public procurement and wise spend management shifted the history of mankind in 20th century. The best example is, probably, the emerging of Silicon Valley due to US Federal and Defense procurement orders. US Government’s procurement fueled the whole new industry, which otherwise would never be what it is today. We would not have iPhones and Amazon dash buttons, drones or even internet so soon.
Today though, the challenge for public procurement is to lead in sustainability game. Procurement can be… no, it should be a champion in promoting sustainable purchasing practices. Another goal I see for public procurement nowadays is the support of small and medium enterprises and enterprises led by women.
Let us speak about a bitter topic, corruption in public procurement. How to combat it best?
There are books written about this. There are fantastic institutions working to combat it and yet we see reports on procurement corruption and fraud every day. Procurement Ombudsman goes through myriads of cases weekly.
Certainly, we need to apply established best practices. We need to use all available monitoring and investigating techniques, in addition to top e-procurement solutions. However, it is a mistake to think that best practice applied in one country or organization can be used with the same success in any other country or organization. Countries and organizations are different; corruption risks are different too.
Generally, the fight against corruption has very much to do with inner discipline, values, education and will. I always tell the following to my students: Whenever you underestimate the negative impact of corruption, think about your kids in 10 or 20 years from now. Imagine a situation when your child needs protection and justice, but someone with money simply buys the judge...
The impact of corrupt practice in public procurement is dire, because every dollar counts. Every dollar can save someone’s life, by becoming a medicine or an additional traffic sign.
What would be your advice for procurement novices?
Well, first I would say, you have chosen one of the most interesting professions in the world. You will learn that procurement is about effectiveness, efficiency and transparency, and I am telling you procurement is discipline, integrity and common sense. Exercise that discipline, integrity and common sense every day and you will do better in achieving effectiveness, efficiency and transparency.