Why is it so hard to develop relationships in public procurement? The impact of early interaction

Abstract

Public procurement research emphasizes the benefits of interacting with potential suppliers early in the public procurement process; that is, in the phase before the tendering. However, how such interaction influences relationships between public and private actors has remained an unexplored area regardless of the obligation of public buyer to regularly invite suppliers to tender that tends to create relationships that follow a trail of active and less active phases. In this study, we explore how early interaction influences the activation and reactivation of buyer-supplier relationships in public procurement context. By employing a qualitative case study design, we investigate the development of four buyer-supplier relationships in public procurement, in which the suppliers were involved in the pre-tender phase activities organized by the public buyer. The preliminary findings indicate both hindering and promoting impact of the pre-tender phase interaction on the activation and reactivation of relationships. However, intensive interaction in the beginning of the relationship activation/reactivation with the selected supplier was regarded as more important than interaction in the pre-tender phase, during which the supplier was merely a potential supplier. Therefore, we conclude that early interaction in public procurement context remains problematic from the relationship development perspective, because the pre-tender phase tends to be too short and interaction too superficial to create a trusting atmosphere that would assist in activating or re-activating, and thereby enhancing relationship development.