Strategic vendor management in government
Conclusion: The development of a strategic relationship between suppliers and public government agencies needs to be approached differently to that in the private commercial world. Government bodies are bound by procurement rules which require government agencies to regularly market-test provision of services, where value for money is the primary consideration. Government agencies cannot therefore have a strategic partnership with suppliers in the same manner as a commercial strategic partnership. The relationship must therefore be timeboxed to meet procurement policies such as the Commonwealth Procurement Rules and cannot be open-ended1.
Strategic vendors for government agencies are either critical to the delivery of business outcomes or are influential in the development of future business opportunities.
For strategic vendor management to be successful in government, both the government agency and the vendor need to commit to effective governance of the relationship and agree to share knowledge on business strategies and product development.