A public contract can be awarded on time, pass every compliance check, and produce a respectable saving. It can also push smaller suppliers out of the market, deepen dependence on one incumbent, or leave an agency unable to respond when supply conditions change. 

That tension sits at the heart of our article, “From Contract Management to Societal Value Creation: A Public Procurement Portfolio Model,” published in the Journal of Supply Chain Management. 

The paper starts from a simple concern. Public procurement has relied for decades on strategic tools developed mainly for private companies. These tools remain useful, but they were designed around a different objective: improving the buying firm’s competitive and financial position. 

Government procurement has a broader job. 

Public buyers must secure goods and services efficiently, but they must also protect fairness, maintain transparency, support policy goals, manage vulnerable supply markets, preserve continuity of essential services, and justify their decisions to citizens, auditors, elected officials, suppliers, and service users. 

A framework centered primarily on profit impact and purchasing leverage cannot fully capture that reality.

Public Procurement Needs Its Own Strategic Logic

The best-known procurement portfolio models help organizations classify purchases according to factors such as financial importance and supply risk. This can support useful decisions about negotiation, supplier relationships, and sourcing strategy.

The difficulty arises when those models are applied directly to government.

Consider a city purchasing school meals. The procurement team may need to think about price, nutritional quality, food safety, reliable delivery, local suppliers, sustainability, labour standards, and access for smaller businesses. These are not secondary concerns added after the sourcing decision. They shape what a successful procurement looks like.

The same is true for a digital health system. Cost matters, but so do data protection, service continuity, technical integration, accessibility, public confidence, political scrutiny, and the ability to hold the supplier accountable over a long implementation period.

In such cases, the central question is not simply, “How much do we spend, and how much leverage do we have?” It is also:

Our model was developed to help answer that question.

We traced the development of procurement portfolio thinking, reviewed 38 studies on procurement portfolio management, and gathered evidence from 143 public procurement professionals. The resulting model replaces the traditional emphasis on profit impact with a dimension that better reflects the public context: institutional-stakeholder complexity.

Two Questions Before Choosing a Procurement Strategy

The model asks public procurement leaders to assess two dimensions.

The first is institutional-stakeholder complexity. In practical terms, this means the difficulty of satisfying the regulations, policy goals, public expectations, and stakeholder interests attached to a procurement.

Some purchases take place in a relatively settled environment. The requirements are clear, the stakeholders broadly agree on the objective, and the procurement can be managed through a conventional competitive process.

Other procurements sit at the centre of competing demands. A major infrastructure project, for example, may involve budget constraints, community concerns, environmental objectives, political visibility, technical uncertainty, service-user expectations, and several public agencies. The procurement team is not simply selecting a supplier. It is helping to manage a contested public decision.

The second dimension is supply network risk. This concerns the ability of the supplier market and wider supply network to deliver under changing conditions. It includes issues such as limited supply capacity, concentration, disruption exposure, dependencies across several tiers, and difficulty verifying supplier performance.

These two questions lead to a more useful conversation before the agency selects a contract vehicle or begins writing a solicitation:

The answer points toward four different procurement strategies.

Four Strategies for Different Public Procurement Situations

Cooperative Agreements

Cooperative agreements are most relevant when several public organisations face substantial coordination or compliance demands, but the underlying supply market is relatively stable.

Instead of every agency developing separate specifications and contracts, organisations can combine expertise, align requirements, and use shared agreements. This may reduce duplication while improving consistency.

The strategic value is not simply greater purchasing volume. It is the ability to coordinate public requirements across agencies.

The approach still requires care. Aggregating demand into very large contracts can unintentionally exclude smaller suppliers or create excessive dependence on a small number of vendors. Cooperative buying should not automatically mean single sourcing or uncontrolled consolidation.

Patronized Competition

Patronized competition applies when agencies want to preserve competition while also supporting public policy objectives such as participation by small, local, disadvantaged, or historically underrepresented suppliers.

The word competition is important. This is not about shielding selected suppliers from market discipline. It is about making competition more accessible.

A public agency might divide a large contract into smaller lots, simplify unnecessary requirements, improve payment terms, hold supplier information sessions, provide feedback to unsuccessful bidders, or use transparent preferences and set-asides where permitted.

For example, suppose a city wants more small businesses to compete for facilities maintenance work. Simply reserving work for the same few local suppliers could eventually create dependency and reduce competitive pressure. A stronger approach would first identify why firms are not bidding. The real barriers may be contract size, insurance requirements, complex documents, slow payment, or limited knowledge of the public bidding process.

The intervention should address those barriers while keeping performance expectations and competition intact.

Monitored Partnerships

Some procurements involve both high stakeholder complexity and high supply network risk. Examples may include major infrastructure, complex technology programmes, integrated healthcare services, or long-term public-private arrangements.

In these settings, an arms-length approach based mainly on awarding a contract and monitoring basic compliance is unlikely to be enough. The public organisation may need closer collaboration with suppliers, technical experts, users, regulators, and other stakeholders throughout delivery.

But collaboration cannot replace accountability.

That is why we use the term monitored partnerships. The relationship may be cooperative, but it must also include clear decision rights, meaningful performance measures, structured oversight, escalation procedures, and reliable audit trails.

The real challenge begins after the contract is signed. A strong award process cannot compensate for weak implementation governance.

Contingency Sourcing

Contingency sourcing addresses situations in which disruption, scarcity, or urgency threatens the continuity of essential services.

During an emergency, normal decision processes may be compressed and authority may be delegated so that teams can act quickly. That does not mean accountability disappears. In fact, expedited purchasing can increase the need for documentation, integrity controls, reporting, and post-event review.

The most effective emergency procurement arrangements are usually prepared before the emergency occurs. Agencies can establish pre-qualified supplier pools, emergency clauses, alternative supply sources, escalation routes, and minimum documentation standards in advance.

The practical lesson is straightforward: speed and accountability should be designed together, rather than treated as opposing choices once a crisis has already begun.

What Changes for Procurement Leaders?

The model changes the sequence of procurement strategy.

Too often, the process begins with a category, a buying guide, or an available contract vehicle. The agency selects a procedure and only later confronts the governance and stakeholder issues surrounding the purchase.

We argue that classification should come first.

Before selecting the sourcing route, leaders should ask:

1. What public outcome are we trying to achieve?
2. Which regulatory obligations, policy goals, and stakeholder interests shape the decision?
3. Where are the most important supply network vulnerabilities?
4. Which of the four strategies best fits this combination?
5. What governance, oversight, and supplier-management arrangements will be needed after award?

This also helps prevent every procurement from becoming overloaded with every possible public objective.

Cost, sustainability, supplier diversity, innovation, resilience, and service quality may all matter, but they cannot always be maximized simultaneously. Leaders need to decide which outcomes are most important in a particular context, explain the trade-offs, incorporate them into the evaluation and contract, and monitor whether they are delivered.

Societal value cannot remain a paragraph in a solicitation, but it has to become part of contract management.

From the Article to the Podcast

We recently had the opportunity to discuss the article and its practical implications in a new podcast episode from the Commerce & Contract Management Institute as part of their CCM insights series:

The conversation goes beyond the mechanics of the four-quadrant model. We discuss why private-sector procurement frameworks need to be adapted rather than simply transferred to government, how public buyers can support supplier diversity without weakening competition, and why resilience cannot be separated from accountability.

We also look ahead at the role of artificial intelligence in public procurement.

AI could help agencies analyze supplier markets, detect concentration risks, review past contract performance, identify potential supply disruptions, and spot tender requirements that may unintentionally discourage smaller suppliers. It may also make ongoing contract monitoring faster and more consistent.

But AI does not remove the need for public judgment. Decisions involving cost, resilience, fairness, local development, service continuity, and public accountability cannot simply be delegated to an algorithm. Technology can improve the evidence available to decision-makers. It cannot take responsibility for the public choices made with that evidence.

That distinction will become increasingly important as procurement functions adopt new digital tools.