What keeps public procurement officials awake at night?
In its latest Public Procurement Report, the Washington, D.C.-based consulting firm Government Sourcing Solutions (GSS) says cooperative purchasing, e-procurement and agency staffing levels are the top three issues that senior government procurement leaders/chief procurement officers (CPOs) currently face.
It’s no surprise that agency staffing is an important and concerning issue for CPOs, says David Yarkin, president of GSS. He formerly served as Deputy Secretary for Procurement in the Pennsylvania Department of General Services. Yarkin says unlike other government departments, procurement didn’t replenish staffs that had been cut as a result of the Great Recession a decade ago. He says there’s a continuing size imbalance between procurement’s workforce and staffing at the agencies they serve. The effects of this imbalance have been dramatic. “Fully staffed agencies of end-users are able to create more and more demand for procurements, but the purchasing department has fewer and fewer resources to meet those demands.” Amazingly, despite these challenges, procurement has kept up to speed on its workloads, Yarkin tells Co-op Solutions.
As procurement duties increased and the resources to meet deadlines disappeared, cooperative procurement has helped purchasing teams keep from falling behind on their tasks, Yarkin says. “Public purchasers saw that they could leverage the hard work done by their peers in the town next door or across the country and adopt their contracts. Not only did the aggregated volume of all those organizations help reduce cost, but they saved countless hours that would have been spent developing requirements, writing solicitations, evaluating responses and negotiating with top respondents.” In the latest Public Procurement Report almost 45 percent of the public procurement officials polled said cooperative purchasing was a top issue. CPOs within local governments, school district/educational institutions and higher education tell GSS that cooperative purchasing as an issue is growing in importance.
GSS’ report says there’s been a steady increase over the last 20 years in the number of cooperative purchasing solution providers, including national consortia, regional cooperative programs and cooperative contracts of comparable institutions. The report notes, however, that cooperative consortiums have been combining and consolidating in the recent past, which has complicated the landscape.
About 39 percent of CPOs polled in the GSS data collection say e-procurement is a top issue for them. E-procurement systems automate the dozens of offline tasks that are involved in a single procurement, and provide governments with a significant time-savings dividend, Yarkin says. “The e-procurement systems allow governments to electronically solicit the suppliers who register through their systems, develop RFIs, RFQs and RFPs collaboratively which they can push out to their suppliers, receive and evaluate proposals and make awards, all without a pen scratching paper.” And when the award is made, end-users can search a catalogue or place orders via a punch out, receive invoices from vendors and make payments, all electronically.
E-procurement systems deliver a number of benefits, Yarkin tells Co-op Solutions. He says suppliers can achieve savings and efficiencies in the way that they manage customer accounts when the customer has successfully implemented an e-procurement system. “The time and cost required to respond to a paper RFP is significantly more than one that comes from an e-procurement system, as are the costs of performing account management after a contract has been awarded.”
And those benefits can flow back to the customer, Yarkin adds. “While those savings could drop right to their bottom lines, suppliers can reduce the costs of their goods and services to their customer as part of their overall partnership relationship.”
Yarkin also serves as founder and CEO of Procurated. The site enables procurement professionals to rate and review suppliers. Through the site, procurement officials can identify the highest quality suppliers based on feedback from their peers as they make purchasing decisions. Prospective users can sign up on the site.
Note: All issues of The Public Procurement Report can be found on the GSS website on the Insights Page.
Michael Keating is senior editor for American City & County and the GPN web site. Contact: [email protected]