Sourcing goods and services: should bottom price be top priority?

Sourcing in Ireland

Sourcing in Ireland

Often high up on the list of challenges facing today’s procurers is the pressure to keep costs low, stretching budgets in all directions. But are we asking for trouble by allowing this fixation on price to dominate when it comes to evaluating supplier bids?

In addition to the immediate effects this approach can have on our businesses – are we allowing cost to eclipse considerations of quality, ethics, sustainability, exposure to risk? – does it distract us from our corporate responsibility to support local suppliers rather than their lower-cost overseas counterparts?

As highlighted this week in an RTÉ News article on the awarding of Irish public sector contracts, procurement can play a powerful role in supporting the domestic economy. Speaking about the launch of Chambers Ireland’s Strategic Procurement Policy for Ireland, Chief Executive Ian Talbot declared:

‘We believe the Office of Government Procurement (OGP) should use metrics such as job creation and long term benefit for the economy. Too many contracts continue to be awarded on price alone without taking into account the number of jobs created in Ireland or monies that could be lost in tax revenue.’

This support of indigenous business aligns with the concept of ‘reshoring’, an international trend in localising the supply chain, decreasing cost and risk while contributing to the prosperity of the home economy.

Read the RTÉ News article in full here.

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