Transforming Procurement in Local Governments: A Case Study on Linking Organizational Design and Value Creation

• In Event: Relational Public Procurement

Abstract

Designing procurement to fit organizations and their eco-systems is a long-standing question mark public managers face (Patrucco et al., 2019). Local governments are especially notorious for their heterogeneity in procurement structures. Factors such as size, human resource capacity, financial conditions, supply markets, politics, and geography drive these differences. These factors make it challenging for managers to determine which organizational design choices lead to the most efficient and effective procurement outcomes. Further, determine when and how procurement structures can be changed to provide value to residents and society. It is well known that public procurement can push forth competitive advantages and broader social impact, whether economic, social, or environmental (Selviaridis et al., 2023). It is also known that specific mechanisms are more likely to distribute value when delivering services (Jain et al., 2020; Osborne, 2022). There is even research on the strategy components, contents, and processes that give procurement a higher status in organizations (Patrucco et al., 2016). However, elevating public procurement from an operational, compliance-heavy to a more mature, strategic role is contingent on context. One of the key contextual contingencies is the design element, which includes the placement of procurement authority and various interest holders within and external to the organization (Patrucco et al., 2019; Thai, 2017; Choi & Hong, 2002; Kamann, 2007). Despite its importance, studying the influence of structural design configurations on value creation in public procurement is relatively nascent. There is limited literature on organizations actively undergoing changing environments. Further, on the challenges they encounter when navigating and weighing the voices of competing preferences that help shape the purchasing function. These new circumstances pose a significant opportunity to find ways for local governments to transform procurement processes for social benefits or streamline operations collaboratively. Thus, the question is, "How can changing public procurement models to represent interest holder needs create value for organizations?”
For this question, this study leverages a case study of a nationally-based medium-sized county undergoing a considerable increase in population size and economic growth. The case study includes interviews with the organization's central procurement authorities, lead user departments in purchasing volume and spending, awarded and non-awarded vendors from solicitations issued between June 2023 and April 2025, and a procurement consultant agency that provides services to the organization. It also utilizes secondary data sources, such as procurement codes, solicitation documents and information, and public memos. The preliminary findings highlight the importance of changing procurement structures and models to consider interest holder needs, as inclusive design and engagement generate meaningful benefits. However, the ability to create value from organizational design relies on procurement professionals' expertise to mediate different priorities and align systems with organizational goals and societal impacts.

Author

• Mariah Teal Lindberg, Arizona State University
  Presenting Author