How public procurement can better prepare for the next unpredictable crisis
The public sector is rife with emergency response plans. When a hurricane, tornado, snow storm, flood or fire occurs, agencies know how to act fast to protect life and property. However, a pandemic is not a storm – even though the most recent one did seem to create a perfect storm of procurement challenges, especially at the state and local levels.
When a crisis occurs, procurement professionals are some of the first people called into action. Our job is to ensure that response, relief and recovery teams have everything they need to complete their missions without issue or delay. In many cases, this requires us to spend days or weeks in the Emergency Operations Center, focused on understanding the fast-evolving needs of these first and second responders and sourcing the required supplies and equipment.
Even before an emergency strikes, we’re the ones working behind the scenes to ensure that front-line public safety, public works and even public health professionals have what they need to quickly and safely respond to citizen aid calls. We are the enabling force of emergency services and recovery efforts.
However, we are only human. The COVID-19 outbreak reminded us of that. Even the best-laid plans for the worst-case scenarios can quickly become obsolete when a public health crisis occurs. Right now, agencies are assessing what they could have done differently to facilitate different outcomes.
Yet, the truth is that it is impossible to fully prepare for the unpredictable. Foresight will never be 20-20, and even hindsight can’t completely mitigate a repeat of the challenges that government leaders have faced in recent weeks. Even knowing what we do now about how COVID-19 impacted individuals, communities and economies might not fully prepare us for the next pandemic – or even the next wave of the COVID-19 outbreak. There are just too many variables to these types of equations.
What we can do, though, is continue to adapt our processes, introduce new policies and implement new technology systems that will give us more flexibility and speed in procurement actions.
Public Procurement’s History of Rigidity May Not Help Us in the Future
Most people don’t typically use the words fast or agile to describe government operations given the many different regulations with which agencies must comply, particularly when it comes to spending taxpayer dollars. However, ambitious efforts are being made to allow for greater flexibility in procurement processes without decreasing transparency or accountability, and they couldn’t come at a better time.
The three biggest pain points identified during COVID-19 related sourcing efforts are:
- Supply chain limitations
- Cumbersome procure-to-pay processes
- Insufficient technology systems, particularly as it relates to supporting a fully-remote workforce
Ironically, the first two issues can easily be addressed by focusing on the third one.
There is no question that procurement policy changes will occur quite quickly in the coming months (if they haven’t already) or that processes will be re-engineered to ensure buyers have the means to expedite sourcing actions in future emergency scenarios. But unless swift action is taken to modernize procurement technology systems, there will still be significant execution challenges in contingency contracting environments.
That’s because best-of-breed eProcurement systems built purposefully for public sector use afford users an inherent agility that isn’t possible with even the latest-generation procurement modules of ERP systems or homegrown eProcurement platforms. They can facilitate a completely automated procure-to-pay workflow that helps to:
- Expedite sourcing actions without extensive manual intervention required
- Monitors for compliance and prevents further progress of certain actions that do require manual intervention for review, verification and/or resolution
- Maintain real-time oversight of every dollar spend and identify wasteful actions or opportunities to reallocate spend to extract a greater return on investment (ROI)
- Generate detailed reports for routine spend analysis or budget planning purposes
- Recruit, register, screen and manage vendors
In emergency situations, especially public health crises that require a nationwide or global response effort, state and local government entities that have access to a modern eProcurement system will also find it far easier than those that don’t to:
Maintain continuity in procurement functions even if the entire team is teleworking. Buyers will be able to logon from anywhere to issue solicitations, review submitted bids and award and manage contracts quickly and securely. They can remain just as productive at home as they would be in the office. In fact, several state and local agencies that were still using manual processes or legacy procurement systems prior to the COVID-19 outbreak found themselves prioritizing the procurement of eBidding solutions at the peak of the pandemic just to be able to procure everything else they need to get through it. (Just be sure your team also has the computer hardware needed to securely access agency systems, collaborate with colleagues and communicate with suppliers.)
Locate reputable suppliers and negotiate contract terms very quickly. Many agencies have had to go outside traditional channels to find specialized equipment or additional quantities of in-demand items, such as personal protective equipment (PPE). Agencies with online access to a one-stop-shop of supplier catalogs can quickly locate potential sources, inquire about available inventory and secure quotes. Those whose eProcurement systems directly plug into these extensive catalog databases are even more empowered to secure what they need in an instant using a simple click-to-order action (assuming administrators authorized such off-contract transactions).
Even if buyers have to secure permission to purchase outside normal contract vehicles, they can still can use the eProcurement system to search for “off-contract” companies in a highly targeted manner using a NAICS or NIGP Code, review catalogs and verify current fulfillment capabilities.
Categorize organizational or departmental spend to improve fiscal management, file recoupment claims for federal emergency funds inform future planning decisions. This is especially true for agencies that also use a universal classification system such as the NIGP Code, which I discussed in detail in the April/May 2020 issue of Government Procurement. When you can quickly confirm on-hand, requested, solicited and procured quantities of essential emergency supplies, you can quickly take action to address shortages or increase stockpiles in preparation for future emergencies. Having visibility into categorical spend also helps to ensure accuracy in budget planning and expedite funding approval processes.
Remember: procurement is key enabler of emergency preparedness and response. Modernization is imperative right now to ensure buyers are equipped to act fast the next time an emergency situation occurs (or even as the COVID-19 crisis evolves.). In the coming months, as you’re reviewing and updating your policies, processes and procedures to introduce greater flexibility in contingency situations, take the time to assess your means to execute them.
Jean Clark, FNIGP, CPPO, C.P.M, CPM is President of NIGP Code and Consulting Services at Periscope Holdings, Inc. She is an NIGP Past President and former State of Arizona Procurement Administrator.