Thought Leadership

Staffing government procurement in the 21st century

In America’s public and private sectors today, just about everything which has not yet become digital is well along its way toward becoming so. Retail, healthcare, manufacturing, logistics, social services, defense and even agriculture, have all become dependent on streams of data for their managers to analyze and use in making decisions — decisions that typically turn out better than those based on past experience, intuition or seat-of-the-pants reckoning alone. That can be a good thing.

But for long-serving members of the workforce, it’s also an uncomfortable change. Back when veteran employees began their careers, data was the province of IT departments, and it didn’t have that much to do with the organization’s routine operations. Now it does. However, replacing personal interactions and familiar physical activities with keystrokes is not intuitive for anyone who became an adult in the analog era. So, for senior managers, upskilling experienced workers and recruiting younger, digitally native employees has become essential to navigating their agency’s digital transformation.

Take the case of procurement. One key reason for cultivating talent is that procurement organizations today depend on insights from analytics to secure savings and value from each purchase. But analytics can get complicated. And you can’t analyze what you can’t track. When activities happen offline or rely on isolated systems with poor reporting, procurement teams lose the ability to automatically calculate contract costs or score supplier responses, making it harder to do apples-to-apples comparisons. Whenever that happens, even the most advanced technologies become passive storage vessels instead of being active enablers that would allow procurement to become more strategic.

Although a lot of effort goes into training new public sector employees, most of it focuses on regulations and procedures. There is an overriding emphasis on understanding the process and regulatory requirements needed to successfully complete a bid or go through an audit without running into legal trouble.

The Millennial Worker

The workforce is evolving, and government service can offer some distinctive advantages. For example, widespread concerns over global sustainability and the important role played by public servants in achieving it, can be a powerful draw in recruiting new talent, along with ways that the common good can be strengthened through technology. With the passage of time, Millennials are making up an increasing share of new hires. By 2025, 75 percent of the workforce will be digitally native. Their expectations around technology and organizational culture are becoming key to recruitment and retention. That means the focus of training for new hires needs to be expanded and include different types of knowledge and skills than had been true a generation earlier.

Today there are multiple large and systemic risks that public officials are obliged to monitor — so many that it can be hard to know where to start. It is a challenge that not only affects elected officials, it also applies to public sector procurement professionals who need to manage throughout the full cycle of a product or service’s acquisition and use. The right technology enables procurement teams to strengthen their defenses against these risks and provides the flexibility to evolve their risk management practices. And, if done with care, it can even happen in the face of regulations and standards rooted in the anti-corruption rules of the early 1900s.

Today, federal spending on contracts amounts to more than $600 billion a year, so for aspiring vendors, learning how to participate in that market can be a worthwhile investment of time. But emerging companies, small businesses and startups face a formidable series of barriers in contracting with the government. They include regulations and policies that are complex, and cultural impediments that prevent communication and engagement with prospective vendors, both of which are compounded by a mutual lack of understanding that can lead to unhappy outcomes. Many of those regulations are embedded into the Federal Acquisition Regulations, or FAR. The General Services Acquisition Manual, with its 571 sections and hundreds of subsections, provides the details1.

In response, some federal agencies have crafted their own workarounds. At the Department of Homeland Security, for example, a Procurement Innovation Lab has been set up allowing teams to test seldom-used flexibilities that exist within the FAR and bring more non-traditional companies into the fold. And in the FY-2017 National Defense Authorization Act, DHS along with DoD and GSA, received a special authority, called the Commercial Solutions Opening Pilot Program, to provide seasonal discretion and flexibility to buy innovative commercial products valued below $10 million. The Small Business Administration offers other guidance as well.

While encouraging competition and inclusiveness are among many agencies' objectives, the overriding goals of FAR and its policy derivatives are to secure the greatest value for taxpayers from each purchase, and to implement safeguards against fraud, which can exist in multiple forms including collusive bidding, bribery, kickbacks, falsifications and counterfeit products, as well as other forms of abuse which were rampant at one time and still remain matters of concern.

Public sector protection

The federal government, of course, is not unique in its concerns about corruption, nor is it alone in having an eclectic assortment of procurement rules scattered throughout various departments, agencies and courts. Although their details differ, much the same can be said for essentially every school district, municipality and public authority at the state level. And what it means for those tasked with procurement is that getting the right product or service at the best price for their own taxpayer-financed unit of government, has been sharply constrained by requirements, sometimes including the vendor’s home office location and the ethnic diversity of suppliers — conditions which don’t generally apply in the private sector.

But technologies don’t work all by themselves to guarantee that the contracting process will be successful or even that it will operate as intended. They require talented professionals with both domain expertise, technical chops and interpersonal skills to use those technologies on behalf of the public agency. People with that mix of strengths are hard to find, so investing in training and talent development for procurement leaders, as in many other areas of public life, has become essential.

Jarrod McAdoo is the senior manager for product marketing at Ivalua.

Recommended for you
Around The Web
Comments