Against a backdrop of increasing budgetary pressure and greater accountability on the part of public purchasers, controlling financial and budgetary risks is a major strategic challenge. In addition to complying with public procurement rules, it is now necessary to secure each stage of the purchasing process in order to guarantee the efficiency of public spending, the budgetary sustainability of projects and the compliance of commitments made. Identifying, assessing and anticipating financial risks - whether they relate to price fluctuations, supplier performance or contract execution - is becoming essential to avoid abuses, protect public funds and ensure continuity of services. This article explores the levers available to buyers and public decision-makers to incorporate a proactive risk management approach into their purchasing practices.

Identify financial risks at each stage of the purchasing process

Budgetary and financial risks in public procurement can arise at any stage, from the definition of the need to the execution of the contract. Upstream, a poor estimate of requirements or an unstable budget framework can compromise the financial equilibrium of the project. A lack of dialogue with operational departments or insufficient market analysis accentuates these uncertainties.

During the procedure, risks may arise from abnormally low or excessively high bids, reflecting either a lack of knowledge of the economic conditions or an opportunistic strategy on the part of the bidder. Unclear contractual clauses, poorly calibrated allotment or inappropriate weighting of selection criteria can also create areas of fragility.

Finally, in the execution phase, the main pitfalls lie in budget deviations, unanticipated price revision requests, late payments or even the insolvency of the contractor. These are all risks that can have a direct impact on the continuity of the public service and the financial sustainability of the project.

Integrating a risk management approach into procurement planning

The key to managing these risks is rigorous, structured planning. This presupposes a precise, shared analysis of needs, close alignment with available financial capacity, and consideration of economic contingencies from the design phase onwards.

Drawing up a multi-year procurement plan that is consistent with the budget guidelines enables expenditure to be anticipated and risks to be smoothed out over time. Tools such as risk mapping, sensitivity analysis and impact matrices make it easier to prioritise the actions to be taken.

At the same time, structuring the tender documents - particularly the specifications and the contract - is a powerful way of controlling risk. The introduction of robust clauses (price revision, penalties, performance guarantees) and detailed knowledge of the local or sectoral economic fabric strengthen the resilience of the purchase from the outset.

Securing budget execution and smart contracting

The execution of the contract is often the most sensitive stage, where the theoretical risks become concrete. Signing a contract is not enough: it must be actively managed, rigorously monitored and documented.

This implies regular monitoring of expenditure, continuous updating of budget forecasts in line with actual progress, and the ability to react quickly to unforeseen circumstances. Price review clauses must be based on reliable indices, clearly defined and limited in scope to avoid surprise effects.

Appropriate financial guarantees (bank guarantee, holdback, insurance) should be considered depending on the profile of the service provider and the nature of the service. In the event of breaches, the penalties laid down must be rigorously applied, and the procedures for handling disputes must be contractually defined to prevent any drift towards litigation.

The central role of buyers and budget managers

Today's public purchasers are much more than mere administrative executors: they are becoming the true architects of public spending. Their role is a strategic one, at the crossroads of legal, financial, economic and operational issues.

By integrating the budgetary aspects from the preparation phase, working closely with the finance departments and ensuring that contracts are closely monitored, buyers make an active contribution to the sustainability of projects. Their ability to structure purchasing, anticipate contingencies and manage supplier relations makes them key players in public performance.

The same applies to budget managers, whose expertise in analysing budgets, monitoring appropriations and projecting financial flows provides invaluable support in securing complex purchases or those with a high financial impact.

Towards a shared risk culture in public procurement

Establishing a genuine risk culture requires a collective, cross-functional approach. Buyers, legal experts, management controllers, budget managers, operational departments: they all need to share a common vision of the financial issues at stake, and act in a coordinated fashion.

This involves adopting common tools - risk mapping, regular reporting, feedback - as well as continually upgrading the skills of our teams. Training in contractual risks, how to read financial offers and how to analyse the economic health of suppliers is becoming a lever for efficiency.

This culture must also be part of a process of continuous improvement: analysing failures, capitalising on good practice, and developing internal tools to move from reactive management to preventive, structured and shared management.

Conclusion

Managing financial and budgetary risks in public procurement is no longer an option: it's a necessity. In an ever-changing environment, with ever-tighter economic and regulatory constraints, buyers need to adopt a proactive, well-equipped and strategic stance. By securing procedures from the planning stage onwards, drawing up intelligent contracts and closely monitoring implementation, they become essential guarantors of public performance. Establishing a shared risk culture is the key to making public procurement more resilient, more responsible, and sustainably more effective.

Sources

• OECD, Public Procurement Toolbox - Risk management in public procurement
• World Bank - Mitigating Procurement-Related Risks in Public Financial Management
• European Commission - Public procurement guidance for practitioners