Connecting state and local government leaders
COMMENTARY | With procurement, the public sector has made shopping a chore. Here’s how to fix that.
Let’s be honest, no one likes procurement. In all the roles I’ve held—civil servant, consultant or in tech—I have often felt that life would be easier and better without procurement. In my daydreams, I was able to buy and sell with abandon without pesky requests for information, quotes, qualifications or proposals. Everything would be so much faster and possibly even cheaper! Governments would be nimble!
While the procurement process can be arduous, it’s also a critical force in ensuring that products and services are purchased responsibly.
Procurement as a Force for Good
Procurement ensures that juicy contracts don’t go to your BFFs at exorbitant prices. It also forces buyers to think hard about what they need and to nudge the marketplace to compete on quality, speed and price. This is supposed to spur a virtuous circle of innovation and competitiveness. Instead, procurement has become a slow, difficult and cumbersome process. How can this process be fixed? By streamlining procurement.
Stimulus Funds Mean More Procurement
Stimulus money is flowing—or about to flow—and public expectations are sky high. The ability to acquire the right products and services quickly has become critical. What can local and regional governments do differently to improve procurement?
Here are nine ways in which procurement can get you what you need, faster, cheaper and easier:
1. Understand what you are trying to accomplish and for whom. The best procurement documents are clear about goals and objectives, including what is not in scope, and the broader policy context. Trade-offs and conflicts should be identified ahead of time by engaging all relevant stakeholders. If you don’t have a clear picture of what you want, vendors will try to guess, and you may not like the result. And make sure the document as a whole reflects your objectives. Too often, documents are Frankenstein-type creations cobbled together from excerpts of previous documents – either internal or obtained from peer organizations. Without careful editing, the documents fail to convey exactly what you need or even contain contradictions.
2. Focus on outcomes, not specific requirements. Procurement documents contain a lengthy list of requirements for the good or service being purchased. The collection of multiple requirements assembled bottom up is less likely to be available in a single solution. But extensive requirement lists add complexity that can make the overall product or solution hard to grasp as a whole, leading to potential contradictions or trade-offs. The more requirements included also means it is less likely that states and localities will be able to find a single solution. Basically, this puts them at risk for shutting out competent and innovative bidders and only receiving bids with extensive custom (i.e. expensive) work.
A procurement document with a clear vision and outcomes and fewer prescriptive requirements is more likely to elicit many solid and innovative proposals from the marketplace. Make sure you describe the strategic and functional outcomes you are trying to accomplish, and anchor them to policy objectives. Take a risk management approach: What could go wrong with fewer requirements and a focus on outcomes only?
3. Research what you are buying, but also how to buy it. To meet your needs, issue your own well-structured request for information and interview a wide variety of vendors and clients -- including from other regions and countries -- with your own questions. Ask them to outline both their current offering and their product roadmap. Don’t hesitate to ask how you can design the best procurement process.
4. View pilots as part of your RFI. Getting to understand the marketplace can involve trying products and services or conducting pilot projects in a real-world setting with solid research questions and extensive user feedback. Pilots can help you and, your decision makers and the public in your community gain a first-hand understanding of new goods and services, so think of trials as an integral part of your RFI process, not your RFP. By then it’s too late.
5. Keep the scope manageable. Because issuing a RFI or RFP in the public sector can be such a difficult and lengthy process, it can be tempting to try to solve multiple business problems in one shot. The result can be an unwieldy purchasing process and suppressed vendor response. Reducing the scope and making it more targeted can lead to better overall outcomes.
6. Retire the “single accountable vendor” mantra. The public sector loves to have a single supplier providing a range of related products and services on behalf of several firms. In reality, unless independent vendors are used to working together, you risk being charged extra for the integration risk and losing control over coordination.
Procurement with an excessively broad scope can also conceal mediocrity. Depending on how submissions are scored, a contract can be awarded to the submission with the best average score, instead of one with the best score in each category. If you have the capacity to coordinate and integrate internally, source individual elements separately based on their individual strengths.
7. Force yourself to justify not going for off-the-shelf products. Every client thinks that their needs are unique, especially if they identify them as a wish list built by committee. Often that’s not the case. Instead, research what the marketplace can offer in the form of off-the-shelf, plain vanilla offers, and identify gaps. Off-the-shelf products and services are cheaper, less risky and faster to build or deliver, easier to maintain (and replace, if needed), and connect you to a global community of clients.
8. Make the process easier and more streamlined through empathy. Apply the platinum rule: Treat others the way they want to be treated. Making the process easier and more streamlined will ensure that more potential vendors will have the time and resources to respond, and fewer will be disqualified. This approach will reduce the cost of responding, which you ultimately are paying for.
Think also about the vendors that might be excluded by the process, and the impact on your desired outcomes. For example, a large incumbent can keep recycling the same response, but they may not have the best price, or the most innovative ideas.
Challenge each clause and table in the document, in the context of the target audience. For example, what is the impact of insurance requirements on small businesses? Are your intellectual property clauses consistent with your vendors’ business model?
9. Value excellence in procurement. Finally, if you are the end buyer, value excellence in procurement. Only excellent practitioners know how the system can help achieve your outcomes. And if you are a procurement professional, the more you know about your clients’ true objectives — and it takes skills and patience to uncover them — the better service you will provide.
Antoine Belaieff is the Lead, North America at FAIRTIQ. Prior to that, Antoine spent 10 years at Metrolinx, the Toronto Region’s transit authority in senior roles in innovation, sustainability, long-range planning, customer and fare experience.