Buying with public money is difficult by design, but are there fair ways to fix it?
Greg Veatch just wanted to buy some software. How hard could that be?
As senior legal technology specialist in the Ohio Attorney General’s office, Veatch needed digital tools to better enable review of legal documents in the discovery process. Procurement took nine grueling months.
“I came into this from the private sector where all you’d do is say, ‘Hey, I need this!’ and you got it. I thought that was a practical approach,” he said. “This is really, really too long.”
Government purchasing is notoriously slow, especially around technology. The same safeguards that ensure open competition, all the rules and regulations that guarantee taxpayer dollars are wisely spent, also cause the gears to grind.
Systemic problems worsen this issue. The latest survey from the National Association of State Procurement Officials (NASPO) found that 74 percent of state procurement officials report increased procurement responsibilities are not being matched by additional staff. A recent Governing Institute survey found that only a third of government buyers have up-to-date spending information and market metrics in their databases, even though nearly two-thirds cite such areas as critical to success.
Despite such hurdles, government technology leaders say that much can be done — and is being done — to make government IT buying more efficient. Need it now, and not next spring? We asked top gov-tech leaders for their most effective procurement strategies. They gave us 11 ways to speed up the process while still protecting the public interest.
It’s not a foolproof system: When a service provider dropped off the Massachusetts list, Emanuel had to rebid the work through Pennsylvania’s co-op. Still, he said, it was faster than had he gone after those services on his own.
One way to speed procurement is to tailor the RFP. Get beyond the generic and fine-tune IT requests to align them with the actual landscape of products and services. Former Oregon CIO Dugan Petty calls this strategic sourcing.
“You look at how much you are spending and what you are spending it on. Then you focus on how that market actually works,” said Petty, now a senior fellow at the Center for Digital Government.* “So instead of putting out the same RFP you use for office supplies, you address those markets differently.”
Maybe you can still buy PCs the way you buy staplers: It’s a mature, commodity-style market. But for more sophisticated IT needs — managed services, cloud products, Internet of Things — you need to hone the process. “This needs to involve the business owner,” he said. Deeper engagement over system requirements may demand more conversations up front, but it will lead to a smoother, swifter process overall.
In Utah, Jaron Janson manages Salesforce use statewide for the Governor’s Office of Economic Development, where he recently acquired Conga Contracts as a tool to enhance the software’s contract management capabilities. He says the way to efficiently procure current software is to tap the user base.
“We formed a Salesforce user group for the state public sector where we discuss the different needs we have. That gives us buying power; we can vet each other’s needs and identify solutions together,” he said. “That’s cut down on acquisition time because we can discuss pros and cons up front, [and] talk about the pitfalls we’ve run into. That helps us identify new vendors and speeds up implementation on the back end.”
As Arizona state procurement administrator until 2014, Jean Clark found that procurement tended to slow down when IT leaders focused too precisely on the specs. The way to shake things loose, she said, is to view procurement through a wider lens.
“What are we trying to achieve and what do we want the outcomes to be?” said Clark, now president of the National Institute of Governmental Purchasing (NIGP) Commodity/Services Code practice at Periscope Holdings. “Government still has a tendency to be extremely prescriptive on how things need to happen, versus focusing on the larger outcome. The specifications can get extremely detailed, when the real question should be: What do we want the outcome to be? If we want to increase our processing by 20 percent, that is how the RFP should be worded.”
Buying technology will be slow and painful if you have to start from ground zero every time. IT leaders can speed up the process by defining terms and standards around emerging technology, creating a common parlance that can be used anytime government buys such services.
By forging consensus early on, it’s possible to write RFPs with the assurance that they will find a receptive market. “The vendors can say what they will accept and what is reasonable, and you do that before there is even a deal on the table,” she said. “If we can get more standard language between the vendor and state government, that’s a big deal in terms of cutting the acquisition time.”
As Emanuel watched the rise of cloud and service-based IT offerings, he saw that the standard procurement process didn’t always apply. The classic sticking point: unlimited liability. Government contracts hold vendors infinitely liable; cloud suppliers can’t play that way, because of the many variables that are outside of their control.
Emanuel’s solution: Craft two sets of rules, one for regular stuff, another for next-gen IT offerings. It was no small thing to pull off. “We knew most state organizations didn’t want to have two different sets of terms and conditions, but that’s what was needed,” he said. To make it fly, he built what he refers to as his internal United Nations. “I spoke technology, my procurement person spoke procurement, my legal person spoke legal,” he said. “Together we learned to speak the language of the people we needed to convince, to help all the different decisionmakers understand what was needed.”
Procurement is wonky. It’s an insider’s game best played by experienced professionals, and yet many of the most seasoned veterans are leaving as part of the baby boomer retirement wave. “Even when they get good replacements they still have to retain them, they have to pay them competitively, which in turn puts tremendous pressure on training,” Petty said.
Efficient IT procurement requires a savvy workforce. Michigan state officials have coordinated with the university community to develop a supply management curriculum. In Oregon, state and local procurement officials participate in robust, certification-based training. “That way we could be sure that the people who exercise procurement responsibilities have the competency to do that work,” Petty said.
“States can bring in interns, they can work to create relationships with major universities. All that helps to bring a fresh view into the organization,” he said.
Here’s one scenario: Every time you need something, put out another RFP. Here’s a better plan: Contract with a single vendor for a wide range of IT services. Let that vendor vet the others and then buy off their list. That’s how Janson got his latest Salesforce upgrade, buying Conga through reseller Carahsoft.
“In the past it was very splintered. We would do an individual RFP and an individual contract with each vendor,” he said. “Now we have one contract with Carahsoft and they have relationships with all the different vendors, so they can do all the bidding and contracting. That allows us a lot of flexibility to bring on new applications and new vendors immediately.”
In the case of Conga, “we found this vendor that was offering the perfect solution for us, and instead of having to go through an RFP with all the vendors who offer a similar solution, we were able to get the whole process done in a month and a half,” he said.
Public accountability requires the government buyer to still research each vendor individually to ensure suitability — Janson doesn’t give carte blanche to the central entity. Even so, he says, it’s a lot faster than issuing individual RFPs.
Sometimes a successful RFP gets you part of the way there. An IT need gets filled, but the project expands or an ancillary need arises. In the conventional procurement model, it’s back to the drawing board, with news specs and new bids.
Periscope’s Clark proposes an alternative, structuring contract language so that services offered under the initial RFP can still be on the table and available, even after an award is made. One vendor takes you part way to the goal line, then another steps in to carry the ball. It’s legally doable, but it takes some finesse.
“You have to identify it in the original solicitation and you have to have the policies and procedures to support it. You have to have that legal foundation,” Clark said. IT can look to social services for cues here. RFPs around group homes and foster care often will leave open the possibility of double-dipping, since the government need and the vendor supply do not always sync up on the first try.
State and local entities typically have some form of e-procurement in place. For many, it may be time to revisit these systems and consider streamlining.
“Many times you see organizations where finance or IT has driven the solution for e-procurement. As a result, they may fall short from a contract management perspective or even from a business intelligence and reporting perspective,” she said. Such systems may lack transparency, integration or ease of use.
To get the most out of e-procurement, it makes sense to take a more holistic approach. “You want to ensure it is a system that addresses things from the lowest to the highest levels, from requisition through invoicing. You want it as seamless as possible,” she said. Procurement cuts across multiple jurisdictions; e-procurement should do the same.
In Colorado, Russell helped build the Statewide Internet Portal Authority (SIPA), a centralized buying entity for state, county and local authorities. SIPA pre-qualifies a range of IT products and services, allowing government to buy without issuing an RFP.
The General Services Administration (GSA) does much the same at the federal level. Russell says there is value in bringing that model down closer to home. “The complaint I always heard about GSA is that it wasn’t relevant to what people were looking to do, and they didn’t think the GSA prices were as aggressive as what they could negotiate at the state level,” Russell said.
A consolidated source like SIPA can speed procurement, but it takes care and feeding. “It’s not one of those things that is just one-and-done, you sign up a vendor and they are golden forever,” she said. “There has to be governance in place so that you are constantly protecting the interests of the state and also the vendors.”
All these strategies can help to move the needle when it comes to technology procurement, but it takes a certain amount of nerve. Government buying is excruciating for good reason: All that foot-dragging aims to protect the public interest. It takes courage to do it differently. Many find it easier to take the plunge when those further up the chain are also willing to dive in.
“Flexibility is key, and that goes all the way to the governor’s office and the legislature,” said NASPO Executive Director DeLaine Bender. “If the legislature and the governor agree that there can be room for innovation in state government, then you get a whole new atmosphere in terms of the way that agencies can function.”
It helps, too, if IT leaders and procurement professionals can learn to think outside their areas of expertise.
Those who succeed in speeding procurement “are the people who try to understand the goals and challenges of the entire organization, not just what is going on in their department,” said Brent Maas, executive director of business strategy and relationships at NIGP. “We can all be very successful technicians, but to do this we need to ascend beyond our specialized roles.”
Finally, a word about integrity. It seems important to note that every gov-tech leader we talked to for this article began the conversation by stating a firm commitment to the rationale behind clunky government buying. Open competition, transparency, sensible stewardship of taxpayer dollars: It is clear that as much as these professionals may want to see procurement sped up, they are unwavering in their belief that it must always be done right.
*The Center for Digital Government is part of e.Republic, Government Technology’s parent company.
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