Short answer
When designing procurement processes for public organizations, critically assess the impact of intermediaries on accountability, competition, and innovation, and implement safeguards to prevent negative outcomes.
- Field
- Innovation & Markets
- Source
- Journal of Public Budgeting Accounting & Financial Management (2025)
- Method
- Qualitative research
- Sample
- 27 participants
- Evidence
- Moderate effect
The use of intermediaries in public procurement, while often intended to increase efficiency, can inadvertently reduce accountability, limit competition, and stifle innovation, thereby undermining strategic objectives. This innovation & markets research insight is drawn from a 2025 study published in Journal of Public Budgeting Accounting & Financial Management. Using Qualitative research with 27 participants, researchers explored how this design variable affects real-world outcomes. The key design takeaway: When designing procurement processes for public organizations, critically assess the impact of intermediaries on accountability, competition, and innovation, and implement safeguards to prevent negative outcomes.
Intermediaries in Public Procurement Can Hinder Strategic Goals
The use of intermediaries in public procurement, while often intended to increase efficiency, can inadvertently reduce accountability, limit competition, and stifle innovation, thereby undermining strategic objectives.
Journal of Public Budgeting Accounting & Financial Management · 2025
Key Findings
- 01Intermediaries can undermine strategic procurement by reducing accountability and transparency.
- 02The use of intermediaries may weaken supplier competition and limit opportunities for innovation.
- 03Intermediary arrangements can reinforce inflexible procurement practices and distance public organizations from supply markets.
Application
Design takeaway
When designing procurement processes for public organizations, critically assess the impact of intermediaries on accountability, competition, and innovation, and implement safeguards to prevent negative outcomes.
How to apply
Before engaging intermediaries in a public sector design project, conduct a thorough risk assessment focusing on potential impacts on accountability, supplier diversity, and innovation potential. Develop clear contractual clauses and oversight mechanisms to address these risks.
Project actions
- 01When researching procurement strategies, consider the potential unintended consequences of using third-party agents.
- 02Investigate how different organizational structures (e.g., direct vs. intermediary procurement) affect innovation outcomes.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Provides nuanced insights into the complex role of intermediaries.
- +Utilizes a qualitative approach to explore stakeholder perspectives.
Limitations
The study's focus on specific sectors and a single country limits its universal applicability.
Reliability & validity
The qualitative nature of the study relies on the richness of interview data, with validity enhanced by triangulation of perspectives from multiple stakeholder groups. Reliability is supported by the structured approach to data analysis.
Think critically
To what extent can the negative impacts of intermediaries on public procurement be mitigated through improved contract design and oversight mechanisms?
Design Principles
"Strategic procurement requires direct engagement and oversight to foster innovation and accountability, rather than relying on intermediaries that may create distance and rigidity."
Designers and procurement professionals must critically evaluate the role of intermediaries in public sector projects. Understanding these potential pitfalls is crucial for ensuring that procurement strategies effectively support broader organizational goals like innovation and sustainability, rather than creating rigid and less competitive markets.
What This Means for Your Design
Using middlemen in public buying can sometimes make things less clear, reduce the number of sellers, and stop new ideas from coming up, even if they are supposed to make things easier.
How to use in your project
- 1.Reference this study when discussing the challenges of implementing strategic procurement in public sector design projects, particularly when external agents are involved.
Add to My Project
Quick Cite
Paragraph starter
Research indicates that intermediaries in public procurement, while often intended to streamline processes, can inadvertently lead to reduced accountability, weakened competition, and missed opportunities for innovation. This suggests that careful strategic management and oversight are necessary to ensure that intermediary arrangements support, rather than hinder, the achievement of broader public sector goals.
Source
Journal of Public Budgeting Accounting & Financial Management
Intermediaries in strategic procurement: opportunities and obstacles for public organizations
journal · 2025
View sourceQuestions About This Research
- What does the research say about intermediaries in public procurement can hinder strategic goals?
- When designing procurement processes for public organizations, critically assess the impact of intermediaries on accountability, competition, and innovation, and implement safeguards to prevent negative outcomes. Evidence: Journal of Public Budgeting Accounting & Financial Management (2025).
- Why does "Intermediaries in Public Procurement Can Hinder Strategic Goals" matter for design?
- Designers and procurement professionals must critically evaluate the role of intermediaries in public sector projects. Understanding these potential pitfalls is crucial for ensuring that procurement strategies effectively support broader organizational goals like innovation and sustainability, rather than creating rigid and less competitive markets.
- How can designers apply this research?
- When designing procurement processes for public organizations, critically assess the impact of intermediaries on accountability, competition, and innovation, and implement safeguards to prevent negative outcomes.
- What were the main findings?
- Intermediaries can undermine strategic procurement by reducing accountability and transparency.. The use of intermediaries may weaken supplier competition and limit opportunities for innovation.. Intermediary arrangements can reinforce inflexible procurement practices and distance public organizations from supply markets.
- What research method was used?
- Qualitative research with 27 participants.
- How strong is the evidence?
- Evidence strength is rated Moderate effect, based on a 2025 journal from Journal of Public Budgeting Accounting & Financial Management.
- What should I do differently in my next project?
- Before engaging intermediaries in a public sector design project, conduct a thorough risk assessment focusing on potential impacts on accountability, supplier diversity, and innovation potential. Develop clear contractual clauses and oversight mechanisms to address these risks.
- What are the limitations?
- Findings are specific to the consultancy brokerage and medical technology sectors in Sweden, and may not be generalizable to all public procurement contexts or sectors.