According to www.smartcitiesdive.com, rising costs of goods and services remain the top external challenge for public sector procurement leaders for the third consecutive year, cited by 74% of respondents in Euna Solutions’ 2026 State of Public Procurement report.
Top External Pressures
Budget reductions or stagnation ranked second among external challenges, named by 55% of respondents, while economic uncertainty followed closely at 48%. A separate National League of Cities report confirmed fiscal strain across municipal leadership, noting that economic development was the dominant theme in mayors’ state-of-the-city speeches this year. The convergence of these findings underscores systemic financial pressure on local governments — with procurement functions bearing direct responsibility for managing constrained resources amid volatile input markets.
The Euna Solutions survey, conducted in June, polled 100 public sector procurement professionals across North America. Of those, 45% represented municipal governments, while the remainder came from education, federal, and state agencies and other public entities.
Internal Priorities and Operational Gaps
Internally, compliance management emerged as the leading concern, cited by 46% of respondents — a figure the report attributes to “the mental weight compliance management places on already stretched teams.” Urgent or unplanned requests and budget management tied for second place internally, each selected by 42%. As one respondent emphasized:
“In public procurement, a small oversight can have significant impacts on taxpayers, vendors, and City operations.”
Streamlining and automating processes remained the top strategic priority for three consecutive years — now endorsed by 50% of respondents for implementation over the next 12 to 18 months. Implementing cost reduction strategies followed at 40%, while staff retention and recruitment stood at 33%.
AI Adoption Readiness and Caution
AI interest remains measured: 39% of procurement professionals expressed openness to AI adoption, 41% were neutral, and 21% uninterested. Confidence levels lagged behind interest — only 17% reported being “very confident” their departments are ready for AI, while 41% admitted they are not confident and 42% said they are “somewhat confident.” Danielle Mouw, a procurement analyst with the General Services Administration, captured the prevailing sentiment during a CivicLabs panel earlier this year:
“It’s the wild west right now.”
Source: smartcitiesdive.com
Compiled from international media by the SCI.AI editorial team.
