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COMMENTARY | A “shared services” model for procurement could eliminate some of the problems and pain points faced by state and local governments in the wake of a disaster.
State and local agencies are often overwhelmed by managing the aftermath of a major disaster whether it’s a hurricane or the ongoing Covid-19 pandemic. Chief among them is managing the complexities of the federal disaster assistance programs, which can lead to frustration. Frustration can lead to mistakes. Mistakes can ultimately result in recovery and rebuilding delays, recaptured funding by federal agencies and fewer disaster survivors served following or between events.
Now imagine a different process, one in which state and local officials coordinate together to manage complex recovery projects. To avoid major roadblocks from these lengthy processes and provide additional support to local governments, states should consider adopting a “shared services” model that simplifies and streamlines the traditional procurement process. While this model may not work for every state or local public sector operation—and some have proven models already in motion—taking a shared services approach is worth considering, especially for resource and capacity constrained governments.
Current State of Affairs
As it stands today, statewide disaster recovery and mitigation programs often require each local government unit to individually procure a group of nearly identical services. These services can range from program-specific grant administration to technical services like environmental review and engineering. This process is incredibly difficult as local governments must adhere to different, complex and onerous state and federal procurement requirements, which can be lengthy or fraught with regulatory and logistical challenges. It’s critical for local governments to strictly adhere to these procurement requirements because if contracts are not procured correctly, the federal government might not reimburse them for those contract expenses.
Local governments also have to understand the programs well enough to write detailed project scopes with all the federal requirements so they get useful and reasonable proposals. This is important because local solicitation websites and forums often don’t drive the same scale of site traffic as state or regional procurement clearinghouses—which can limit the contractor or vendor options available to agencies on the very frontlines of disaster recovery.
Lastly, state and local governments must establish transparent scoring criteria, perform independent cost estimates, publicly post their solicitation, review proposals and select vendors. And they must do all of this while documenting the entire process in line with record keeping requirements that could be monitored for more than a decade.
These are heavy burdens for resource-constrained local governments. Especially those that have never overseen federally funded projects.
Benefits of a Shared Services Model
Taking a shared services approach to the procurement process can be a good option for state and local governments. Instead of multiple local governments going through independent procurement processes for similar services, this model allows the states to procure centralized services and offer them directly to local governments. Streamlining this process at the state level can save considerable time, money and set local officials up for success in their recovery efforts.
The key benefits of the shared services approach are:
If the state procures a suite of services prior to making awards to local governments, it can speed up project delivery by eliminating the time needed for multiple—often lengthy—procurement processes. It can also give local governments more support earlier in the program lifecycle, which can help avoid later compliance or implementation challenges.
There’s a huge gap in the quality of vendors who do recovery work. Rather than push that vetting burden across hundreds of local agencies, vendors can be vetted and sourced by the state. Centralized vendor management can also increase consistency in such critical compliance areas as record keeping, monitoring, compliance tracking and reporting. If the state is overseeing the environmental reviews, for example, then the prime vendor can ensure the data collected is consistent and integrated across geographies.
By buying a larger quantity of services, states can often get a better price from vendors than if each local government has to conduct individual procurements. By taking advantage of economies of scale, vendors can reduce overhead costs.
Lessons Learned from Implementation
Importantly, states looking to adopt a shared services approach should also take steps to make sure small firms have opportunities to participate in these larger procurements. Emphasis on participation goals for programs that support disadvantaged, small, minority-, female-, or veteran-owned businesses should be paramount when transitioning to a shared services model. States can further support their local disaster recovery ecosystem and develop home-grown talent by requiring vendors to hold job fairs, instituting local hiring goals and setting subcontracting goals, as well as ensuring procurement requirements aren’t too onerous for local and smaller firms to compete for work.
The shared services model has been deployed successfully for different federal programs across the country. So why don’t more states use it? Often, recovery program decisions are made with an unwillingness to change the familiar. Some resistance may also be a reaction to the state having to take on more work and more responsibility for risk.
One possible solution is to pilot the shared services model on an opt-in basis. Each local government would have the choice whether to use the state-procured vendor or opt to procure their own. This mitigates much of the risk, especially where local control is important and there are existing sensitivities about forcing a one-size-fits-all plan on local governments. In these cases, states can further help local governments reduce their risks by creating and providing them with procurement document templates and checklists that include all applicable federal, state and local procurement requirements. If the pilot turns out to be a success or it’s revealed that certain services are better suited for this model than others, states can continue to fine tune this approach over time.
The time is right for state and local governments to start thinking about large-scale systemic changes of how things have always been done in disaster recovery. State and local officials, in particular, need to think differently about who sources key public sector services—and how. As disaster management professionals, we’ve seen procurement inefficiencies and problems up close that impact the delivery of those services. That’s why we advocate for investing in front-end procurement approaches as a way to save time and avoid incurring ineligible costs. If used as a model, a shared services approach could decrease risks and time spent managing critical large disaster mitigation and recovery projects.
Nathaniel Trombley and Lauren Nichols are directors of disaster management at ICF, a global consultancy.
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