Privatized and Captive: The State's Struggle with Social Service Procurement
The government has acknowledged severe failures in its 17 billion shekel social procurement system. An inter-ministerial team recommends establishing a pool of service operators to improve quality and reduce bureaucracy.
Government reports that attempt to fix things are often the occasion where the government admits how bad the situation is. The inter-ministerial team for examining social procurement recommends establishing a pool of social service operators to shorten tender procedures and establishing a government unit to support ministries in social procurement processes.
The reason is the severe failures in procurement worth 17 billion shekels, including: severe cumbersomeness and bureaucracy in tenders, lack of flexibility in service delivery, lack of coordination and duplication between ministries, difficulties in accumulating and transferring knowledge, and more. The services in question include hostel and dormitory services for people with disabilities, shelters for battered women, nursing institution services, and transportation and enrichment programs.
The scope of social procurement in the three main ministries — education, health, and welfare — stands at more than 17 billion shekels for about 230 different services provided through 1,002 operators. The situation is exacerbated by the government's enthusiasm for privatization; for example, 90% of welfare services are privatized, more than any other field.
The report details a series of serious ills. The average number of clarification questions per tender stood at 84, and 71% of procedures required updates to tender specifications. The average number of discussions in tender committees stood at 24 per procedure. This lack of coordination creates uncertainty among operators and imposes a burden on both the market and the ministries. Furthermore, the government has become a "captive client," often unable to address service failures effectively.
The team recommends anchoring unique principles for social procurement in regulations, such as prioritizing quality and reliability over price. A central recommendation is developing a pool of social service operators sorted by specialization to strengthen competition and transparency. The target year for execution is 2027. However, it remains highly doubtful whether this reform will truly solve the inherent issues of lost professional knowledge and the lack of continuity in personal treatments.
