Top 10 Tips on IT Procurement
Tips on IT Procurement
Editor’s Note: Craig P. Abod is the president of Herndon, VA-based DLT Solutions, Inc. (www.dlt.com). DLT is a government solutions provider delivering comprehensive technology solutions, including Autodesk, Oracle, Quest Software, and VERITAS, to federal, state, and municipal governments.
Federal government information technology spending is forecasted to rise approximately 23 percent from $45.4 billion to $68.2 billion over the next five years. The size of spending in combination with the financial stability federal business brings to a vendor has motivated numerous technology vendors&mdashincluding software providers, integrators, and value-added resellers&mdash to establish a federal sales presence. As a result the government is suddenly faced with more technology solution options than ever before. This is a great thing for the government. However, procurement officers also are faced with more vendors to evaluate. Distinguishing the right vendors for their agencies has become a daunting task.
In this respect, here are 10 tips that procurement officers should consider when choosing a provider:
- Pricing Mythology
It is easy to assume that because a company has earned a place on the GSA Schedule its prices are the best the government can find. Contrary to conventional wisdom, many providers actually can offer price points through another federal agency’s specially negotiated contract vehicle. Procurement officers should ask vendors about any additional contract vehicles that might be available for them to use.
- Exclusive Providers
Exclusive provider is a good label to have. This often means that large companies, such as software giants Autodesk or Veritas, have entrusted their brands with an expert partner that truly understands the business of government, including compliance issues and the contracting process. Resellers that earn the label “exclusive provider” come highly qualified and often are a good choice among vendors for the government procurement officer.
- A Mile Wide and an Inch Deep
As vendors rush to develop sales channels with the federal government, companies tend to fall into one of two camps: diversity of products vs. the focused few. Vendors that pitch a “one-stop-shop” mantra should send up a red flag in the mind of a procurement officer. Having a diversity of products from software to hardware to consulting looks appealing at first glance, but it comes with a price, which could translate into hidden costs. Procurement officers should seek vendors who have a focus and a depth of technical expertise within the industry of products and services being considered for purchase.
- Revisiting Customer References
In the business world it goes without mentioning that a company will ask for customer references before purchasing any product or service. Amazingly, Section 300 of the Office of Management and Budget’s Circular A-11, which describes the guidelines for building a business case for acquiring technology assets, never requires reviewing customer references. Agency references can provide great insight and validation into the true quality of a product or service. In addition, reviewing references may help screen out some vendors early on in the planning and acquisition process.
- Segment Experience Counts
Government experience is a broad term. Does it imply federal experience, or state and municipal experience? Any procurement officer who has struggled to align a new product into his or her agency’s strategic plan, Enterprise Architecture (EA), or the Business Reference Model (BRM) can attest that the federal government is a very different entity with a unique set of compliance issues. Vendors should be able to point to specific examples of government work experience.
- Relevant Experience Counts More
Because the process of government business can be similar from agency to agency, procurement officers should look for vendors with experience at similar agencies. For example, the process of an investigation at the Bureau of Alcohol, Tobacco, Firearms, and Explosives is likely to be similar to the case management process at the Drug Enforcement Administration. A vendor with a sound understanding of one agency’s business could be invaluable in providing the right service or products for another agency.
- Knowledge of Government Contracts and Guidelines
Procurement officers should seek vendors with a depth of knowledge of government guidelines and contracts to ensure the acquisition process is both smooth and compliant. For example, purchases that fall under $500,000 have far fewer reporting requirements than those that cost more. While this fact is common knowledge, there also are several ways for an agency to procure more expensive products and services faster. The best vendors have multiple contract vehicles and a staff that can help procurement officers navigate those vehicles to fulfill their specific needs quickly and efficiently.
- After-Sales Support
Does a vendor deliver exactly what it says it will deliver? Does a vendor over promise and under deliver, or under promise and over deliver? What if, after taking the necessary steps to develop a business case and gaining authorization for the acquisition, the agency hits an unforeseen obstacle that inhibits implementation? What is the return policy? These are all questions that procurement officers should ask a vendor in advance of a purchase. After-sales support can range from technical help in smoothing out challenges to returning the product for a full refund. Procurement officers should expect a vendor to provide fair and reasonable policies that answer these questions in advance of a purchase.
- Financial Viability of the Vendor
There is no disputing the fact that the government procurement and sales cycle is long. Most experienced government vendors already understand that a business might not receive payment for 90 days following the sale. With a flood of new vendors trying to break into the government market, some might not under-stand this cycle. In business, cash is king, and if businesses don’t manage the cash flow despite rising revenues, 90 days might be too long. A quick review of a company’s financial stability before purchasing products should be a routine step for procurement officers.
- Longevity of the Technology
The recent bust-to-boom technology cycle brought many lessons to customers of technology products and services. One key lesson is the longevity of a technology. If one software company with a .NET-based technology acquires another software company with a Java-based technology, what will happen to the technology? Will the newly merged company still support customers with Java-based software or will it force customers to adopt new or different versions? Procurement officers can gain keen insight about the resiliency of a particular technology by reviewing analyst firms’ Web sites and searching for news articles in trade publications that incorporate the insights of market research analysts from well-respected research groups such as Gartner, IDC Re-search, META Group, Yankee Group and Forrester Research.