Form a partnership or just follow the leader? Public procurement’s digital age strategic conundrum
Public procurement has long been viewed as a profession of “doers.” We do what it takes to ensure our customers have exactly what they need, exactly when they need it, to complete their mission. In the simplest of terms, what we do enables them to do what they do best. But therein lies the problem.
For decades, the procurement model has been one of top-down delegation. A “follow the leader” flow of requirements, if you will, with very little strategic input from procurement. The customer tells us what they want and we go out and find it. Which works if you’re buying simple commodities where the specifications are clear-cut and quality is comparable. However, simply serving as a middleman between the customer and the supplier – executing a straightforward solicitation task list and, later, just managing the contract lifecycle – is doing a disservice to the customer. Particularly when it comes to complex procurements or large spend solicitations, such as technology buys, construction projects or even professional service contracts.
Procurements Should Not Be Conducted in Customer-Buyer-Supplier Silos
It is becoming abundantly clear to government leaders (not just procurement leaders) that the central role we play in every public-private sector transaction has strategic value. Not after the purchase requirements are passed down to us, but before. And our value doesn’t stop after the solicitation is complete. Our strategic value extends far beyond the contract award.
Procurement has a deep understanding of what customers need and what the market can deliver. We know if a requirement is reasonable or restrictive or neither. Think of it in terms of who, what, when, where and how: customers tell you “what” they need to meet their customers’ (i.e. community/taxpayer) needs. Customers may even be the ones to decide “when” something needs to be delivered. But it is procurement that knows “where” to look to determine what’s actually feasible, “who” can provide the desired solution (if anyone); and ultimately how to achieve the desired outcome. It is procurement that also confirms whether or not the timeline (i.e. “when”) is reasonable. That is why procurement should be engaged early and often by those in charge of modernizing government services and systems or driving infrastructure development and upgrades.
As procurement professionals, we are familiar with the all-too-common-compromise that customers often make when their ambitious requests are unattainable based on available solutions or, in some cases, funding. We are the ones doing the market research, negotiating with suppliers and monitoring performance of the project and the people involved. We’re not just paying attention to supplier performance, though. We’re also analyzing customer behaviors and searching for maverick spend that could be working counter to our organization’s mission. That’s because our mission as procurement professionals is to make sure customers are able to complete theirs. Procurement is the function that enables every other government function. Overly-ambitious goals often lead to overspending and less-than-desirable outcomes – and we are often the only ones who can bring that to customers attention. Let me be clear, though. Procurement should not be asked to police customers’ decisions or actions. We should be embraced as solution providers.
When – and How – to Engage with Customers to Enable Better Outcomes
As procurement professionals, you are expected to provide a certain level of “customer service” to your internal agency customers. Though you may not always be a subject matter expert on the goods and services you are asked to buy, you are the expert on how best they can be acquired.
Whether or not you are officially invited to join the “core project team”, procurement officials should be proactively recommending the solicitation strategies, contract vehicles and negotiating tactics, especially for high-stakes procurements. You know what is going to work best for certain types of procurements and, just as importantly, what won’t work. You are responsible for ensuring compliance with government policy and regulations. And you will be the one who is ultimately charged with providing the resources and expertise to execute the sourcing strategy. So, it is your responsibility to help customers understand why a certain sourcing strategy should be utilized and come up with creative procurement solutions when needed to support complex requirements.
At the same time, you should be sharing market research insights related to pricing, specifications and delivery timelines with customers during the requirements development phase – not after the customer has delivered that document. One of the biggest pain points for procurement remains to be the discrepancy between agency customers’ “wants and needs” and available solutions. Telling the customer that you can’t fulfill their requirements is never a fun conversation. It certainly doesn’t bode well for customer service. But this is the consequence of the long-employed “delegation” model. One of many.
With government hyper-focused on modernization, procurement modernization has never been more mission critical. Or, should I say, procurement’s elevation and acceptance as a “strategic” partner has never been more critical.
I know I talk a lot about procurement technology modernization and the reasons why you need the right eProcurement system in place to effectively facilitate large-scale technology and system procurements. But eProcurement technology doesn’t miraculously deliver the outcomes that your customers want or need. It simply makes it easier to manage the solicitation, contract award and performance monitoring processes by providing a more collaborative and data-driven environment from which to operate. Technology increases efficiency in the “execution” phase, keeping you and your customers accountable for your decisions.
But, if you don’t have the right procurement strategy in place to begin with, technology won’t do anything for you but let you know that you need to correct course and then facilitate such actions when you’re ready to re-solicit or renegotiate the contract. In other words, the key to government modernization is modernize procurement’s role in government.
Not Sure Where to Start?
I highly recommend that you advocate for customers (and other government leaders) to engage a multi-function team comprised of resource advisors and contracting officers as well as technical experts and end users – at a minimum – for every project. Engagement should start with the project ideation and planning phases and continue through the procurement process and entire contract lifecycle.
You can also reach out to the NIGP Consulting Team for guidance on how to demonstrate procurement’s value as a partner, gather supplier feedback on processes, elevate procurement into a more strategic role or design an “enablement team” to support your customers or even local governments looking to modernize their procurement function.
Jean Clark, FNIGP, CPPO, C.P.M, CPM is president of NIGP Code and Consulting Services at Periscope Holdings. She is an NIGP Past President and former State of Arizona Procurement Administrator.