Public Procurement 2020
Urgent recruiting to replace retirees, expanded buying through cooperative contracts and greater reliance on technology are becoming the norm, and public purchasers will see these trends expand even further in the coming years.
As the workforce ages, procurement professionals are scrambling to replace exiting employees. In fact, succession planning is one of the top five factors that will most affect procurement in the next few years. According to a 2015 Government Procurement survey of public purchasing officials, nearly one-fifth of the 498 respondents said they would be retired in the next two to three years.
This data was reconfirmed in a 2016 compensation and retention benchmark survey from the NIGP: The Institute for Public Procurement, which shows many public procurement directors and managers are planning to turn in their badges. In the high single digits (7.2 percent for directors and 6.6 percent for managers), survey respondents said they were considering retirement in the next 12 months.
Exiting staff will only compound the issues with the heavy workloads procurement professionals already face. About 35 percent of public procurement professionals surveyed in Onvia’s “2016 Survey of Procurement Professionals” are stretched or working extra hours to meet deadlines.
DeLaine Bender (photo at right), executive director of the National Association of State Procurement Officials (NASPO) confirms Onvia’s findings. In her group’s “2016 Survey of State Procurement Practices,” 74 percent of respondents indicated the procurement responsibilities of the central procurement office have increased in the past two years. “While procurement responsibilities continue to grow, only 38 percent of responding states indicated a staff increase, which represents no improvement from the staffing challenges reported two years ago,” Bender says.
“Given that sixty-two percent of procurement offices are actually experiencing a staff reduction or no change in staffing, more needs to be done in the procurement workforce area to alleviate the rapid increase in responsibilities which is not matched by additional staff to support workloads,” Bender says. Those workloads, she says, are almost two times greater than those reported two years ago in the “2014 Survey of State Procurement Practices.”
Future leadership will bring new ideas
However, there is a silver lining in the workforce exodus. Future public procurement leaders will bring benefits to the profession, says Molly McLoughlin, director of supply chain management at the Boulder Valley (Colo.) School District (photo at left). “I believe the new generation of procurement professionals will bring new ideas on how to procure within the limits of our laws and statutes. New procurement professionals also bring with them a flexibility that we may not have seen in the office setting before; they are mobile, web-based, and come from an electronic generation.”
McLoughlin says the baton must be passed smoothly. “One challenge we must anticipate is merging the new with the experienced. As managers, it will be critical for us to support both and be diligent in managing change.”
To accomplish this transition, training methods are changing to bring retiree replacements up to speed, says Stacy Gregg, procurement manager II for the State Fiscal Accountability Authority at the South Carolina Department of Procurement Services. “In the past, we may have done just in-person training. Now we are taking different approaches to instruction, like webinars and online courses, to satisfy the needs of younger professionals.”
Gregg (photo at right) says the new hires are familiar with instructional technology and are often able to get needed training independently with no pushback. “We are finding that, whereas sometimes the older professionals may be reluctant to try to figure things out, the newer staffers don’t so much have that problem, because they are used to engaging with current tools to learn new ways of doing things.”
Gregg believes their familiarity with technology makes newly hired professionals a valuable addition to the public procurement community. “I’m hoping that their propensity to use technology will make them more strategic as they perform their daily job functions and tasks.”
But the question remains, how do industry professionals get younger workers interested in the profession?
Attracting the next generation of procurement pros
To help ease the problem of a rapidly depleting workforce, the procurement industry is reaching out to the next generation of leaders in a number of ways, says Marcheta E. Gillespie, director of procurement in Tucson, Ariz.’s Department of Procurement.
“Over the past 10 years, we have significantly increased our focus on educating and reaching out to the younger generations to encourage interest in our profession,” Gillespie says. One example, she says, is the heavy lifting to bring public procurement curriculum and degree programming into U.S. colleges.
But to truly be competitive, Gillespie says the profession also needs to focus on how the younger generation works and will want to work. “For most of our agencies, the way we work, where we work and what we work on will not be in alignment with how the younger generations want to work, nor will they work in the world that these students are growing up in,” she says.
However, Gillespie says the technological disconnect between younger workers and the current procurement discipline is a major hurdle. “The fact that you cannot process significant portions of your work on a tablet or cellphone is going to be an issue for procurement leadership,” she says. “If we don’t change, we’ll see a significant decrease in numbers of younger generations coming into our field.”
Organizations that are essentially paper-based operations may be challenged in attracting younger talent, says Lourdes Coss, formerly Houston’s chief procurement officer and now a procurement consultant, speaker, teacher and coach (photo at left).
“As the tech-savvy generation enters the workforce, they will be looking for the environments that provide the tools and technology to which they are accustomed,” Coss says. She tells Government Procurement that those new hires may bring fresh ideas to further automate the procurement workplace by leveraging technology.
By becoming more technologically minded and attracting younger workers, procurement managers must not isolate their more experienced, older employees. It’s a balancing act, but experts say this increasing diversity in the workforce is ultimately beneficial.
Leveraging a diverse workforce
With younger leaders coming in, and the majority of the workforce aging, today’s procurement administrator needs to learn to work across a wide generational range, says Brian R. Smith, purchasing manager in Multnomah County, Ore (photo below on right). “Some of us are working with and/or managing as many as five generations in the workplace.”
Although it can be challenging, this isn’t without benefit. Smith says that managers can mold a more vibrant and innovative work environment by leveraging the diversity of life experience among staff members to create a stronger team. These elements, Smith says, include both protected (gender, ethnicity, religion, age, etc.) and non-protected (experience, competencies, interests, beliefs, etc.) elements.
“One thing I’ve observed is that this newest generation is much more fluid as a group in working across elements of diversity. This approach certainly helps teams focus more clearly on achieving goals and objectives, but it can often suffer from myopically ignoring a broader organizational cultural context,” Smith says. “In other words, they’re very good at challenging ‘the way we’ve always done things,’ but may lack the sensitivity to organizational forces (and how to navigate them) that impede successful implementation.”
Cooperative purchasing will increase
While the workforce is evolving, so too are the methods by which procurement is accomplished. Experts agree that in the coming years more agencies are likely to use cooperative purchasing. “With the realities of our collective resource challenges, cooperatives will continue to see substantial growth,” Marcheta Gillespie says (photo below on left).
The growing number of cooperatives provides more competition in the marketplace, Gillespie says, but that expansion causes greater confusion for the procurement professional community. “The value of the market saturation is that it is forcing the public procurement professional to ensure their own agencies are properly vetting these cooperatives and the associated contracts,” Gillespie explains.
This leads to more work for the agency, Gillespie says, “but it also ensures the professional understands ‘why’ they are taking a particular action and not completely relying upon others to vet a decision.”
Strained resources will lead procurement professionals to look to co-ops beyond typical commodity-type purchases. says Reneé Medlin, procurement manager in Kansas City, Mo.’s General Services Department (photo below on right).
Medlin’s agency currently uses cooperative contracts for complex services, technology solutions and specialized emergency vehicles. “As we become more creative, I definitely see cooperatives thinking ‘outside the box’ and issuing solicitations that will meet our ever-growing needs,” Medlin says. Some potential cooperative contracts in the future, she explains, could cover correctional services, energy-related equipment and supplies and more public-private-partnership agreements.
The demand on procurement professionals to seek opportunities to reduce cost, maximize resources and reduce cycle times continues to escalate, Coss says. “Agencies seeking solutions may see cooperative purchasing as an opportunity to buy time while they acquire the talent and tools to address some of these requests.”
Government buyers are increasingly using a variety of alternative purchasing methods, according to the Onvia report These include statewide contracts; piggyback contracts; national, regional and local cooperatives, GSA contracts and P-cards.
Ben Vaught, director of Onvia Exchange (photo at left), says 93 percent of procurement agency staff that responded to the survey is using alternative buying methods. These alternative methods, says Vaught, may save time for the agency compared to formal bidding processes, or they can enable an agency to get a better deal on a commodity buy.
Technology’s growing role in public procurement
In NASPO’s survey, all but three responding jurisdictions indicated that they use an electronic procurement (eProcurement) or Enterprise Resource Planning (ERP) system.
“This represents a 15 percent increase compared to 36 states using eProcurement systems in the previous year,” Bender says. “This is a recognition of the continued growth and the value of e-procurement implementations nationwide.”
This begs the question, in what other ways will technology affect procurement? “We will continue to see our supply chain software and ERP solutions move into the cloud and towards greater business process standardization,” says Smith. Automation and innovation, he explains, “should be seen as both a mindset and an approach.” Agencies, however, need better data to understand how their processes are working.
“Some agencies have matured their technology to the point where adding mobility and reducing duplicative efforts across the agency would be an ideal next step,” Coss says. She says technology could be used to integrate efforts across an agency to minimize the duplication that generally exists when requests come from field personnel. “Hand-held devices to leverage the data entry from its origin would help expedite processes and reduce duplicative efforts within agencies,” Coss explains.
As agencies acquire new technology, procurement will be tasked with helping facilitate the amending of contracts and adding provisions and language to protect data and ensure that data privacy laws and policies are followed, McLoughlin says.
She describes the process as a monumental task that impacts the time, resources, skills, and patience of all procurement staff, contract managers and legal staff. McLoughlin sums up: “Our district has seen these addendums take upwards of six months to get parties to agree. Data privacy is a sensitive issue and as custodians of data, we have a responsibility to protect it.”
The upcoming election and public procurement
It’s difficult to discuss the future of procurement without discussing the upcoming presidential election. However, no matter the result, McLoughlin says procurement professionals will continue to perform a vital role.
“Regardless of what comes of this election cycle, we as procurement professionals will still be tasked with acquiring goods and services in a fiscally responsible manner. I do believe that our position at the table will be more valuable as budgets and resources grow tighter.”
Coss says that after the 2016 election, procurement pros may be asked to use more private sector strategies. “There could be greater interest in the implementation of category management, for example, to improve government efficiencies and develop a hybrid pool of procurement generalists to specialists,” Coss says.
Power shifts in elections can be dangerous, since many public officials pledge, “No new taxes,” says procurement veteran Hal Good, former director of procurement and contracting in Frederick County Md., and Palm Springs, Calif. (photo at right).
“In scenarios where revenues are not indexed, this can produce very challenging pressures when the demand for services escalates and there is insufficient revenue to cover provision,” Good says.
This situation, Good explains, gives rise to low-bid mentality as opposed to best value. It also leads to purchase solicitations based on lowest-price technically acceptable vs. innovative long-term solutions.
In this increasingly complex environment, public procurement needs to effectively navigate among senior executives and members of governing boards, Good says. He believes procurement needs to have a “seat at the table” in order to effectively influence policy.
Further, Good says, the chief procurement officer needs to be versed in multiple disciplines, tech savvy, business savvy and be an excellent communicator. “The CPO must put the goals and objectives of the organization first, and procurement must be seen as a valuable partner in pursuing the overall mission.”
Michael Keating (email@example.com) is senior editor for American City & County and the GPN web site. He’s written about the government market for USA Today, IndustryWeek, Industry Market Trends and more than 100 other publications.