Since 2013 just about every article and newsletter I receive about government procurement news is on cooperative purchasing or how to write a good RFP. Like a song on repeat or a great old ballad that has been remade too many times I think we are ready to hear something new. Many have asked me recently what are other local government purchasing folks in my role talking about? What is on top of mind and what trends and obstacles should we prepare for? It just can’t be cooperative purchasing and how to write a good RFP song forever right?
You are in luck; I have had the good fortune of working with procurement strategy from California to Florida and have listened to the conversations being discussed right now by procurement teams that are sure to continue for the rest of the year. Yes, many are still talking cooperative purchasing and how to write a good RFP, but there is a lot more going on, and here are the 4 other topics whose reverberation is getting louder and louder.
Work From Home
Over the past couple of years, studies and evidence have mounted showing that work from home (WFH) or hybrid remote work has shown levels of productivity equal to or greater than office-only work culture. Studies from Stanford University and Bloomberg also share that having a culture of remote work improves employee health, boosts employee retention, and increases work-life balance yet governments have been slower than the private sector to adopt this idea. That is until the pandemic, where government organizations were forced to jump into the deep end of the pool on working from home. Most governments were unprepared, as many government procurement strategies were to still use desktop computers instead of laptops, using desk phones instead of softphones apps, having only booked physical conference room spaces to have meetings, and having never used Zoom. This caused some initial heartache as procurement staff reported using their cells phone from home to call suppliers, scrambling with IT departments to set up remote logins, and quickly buying the basic versions of zoom, Slack, and Microsoft teams. What was learned from there was that it didn’t take long for a government organization to catch on to the efficiency and benefits the private sector was experiencing with work from home. Within a month government was running finance meetings, logging hours, doing payroll, CIP, and budget meetings, and judges embracing court hearings and cases through video conferencing.
Prior to the pandemic, only 3% of government employees were working remotely and at the peak of the pandemic, nearly 60% of government employees were working remotely during some portion of their workweek. With many states on the road to fully reopening what will be the new norm and standard for government purchasing departments?
We know some procurement strategy was to go all-in as soon as they had to close their doors to the public, getting staff laptops, video conference licenses, and setting up infrastructure, policies, and workflows that allowed them to keep on procuring goods and services that allowed their communities to operate smoothly even during the pandemic. For these governments do leaders simply tell everyone to come back to pre-pandemic schedules, in the office from 9-5 Monday through Friday, and if you’re not in the office you need to use PTO? Or do leaders put in place a hybrid work schedule where staff has the option to choose remote workdays?
We also saw other procurement teams hold back on investing in tools to help staff work from home during the pandemic, instead of putting in place band-aid policies like having staff fill out forms estimating hours they used their cell phone for work calls and reimbursing them, scheduling hours for each individual to come in the office during the week to make copies of the forms they needed to use or pausing procurement altogether. These teams did their best during the pandemic without investing in the suite of tools available for working from home and it looks like most are now fully back in the office. But what happens if another scenario occurs where we are required to work from home again? Can the staff manage those loose band-aid policies again and pause critical infrastructure projects that need to be done further? And what does this do the employee retention and what will the total cost of losing a key staff member be due to the frustration?
Procurement teams are finding that the decisions being made on this topic are all over the spectrum. You’re even seeing neighboring procurement teams from two cities just miles apart have one; leaving their staff with the continued freedom to work from home while the second is required to be back in the office 100% of the time. This is causing conversations at the real or metaphoric “water cooler” to last quite a bit longer.
Being seen as heroes
Remember the days when the only news the public ever heard about government procurement news was when there was bad news. When a project didn’t finish on time when a project went over budget or there was an accounting error. I can’t lie and say those days are gone and behind us but there sure seems to be a new sense of appreciation from the public for those working in government procurement. Last year there were tons of comments on social media pages from parents who flocked outdoors to park and trails during the pandemic thanking parks and rec’s department for keeping their parks clean, nurses thankful to government buyers who were able to find a supplier to deliver face shields, and interviews with teachers who were glad to have new technologies to teach students. This last year shined a light on how vital a procurement department is to keep a community operating smoothly. Maybe this is the new trend, as it sure seems like the citizens of our communities are starting to see procurement folks as the unseen heroes behind all that is working as it should. Whatever it is, is making those of us on the receiving end of these kind comments smile and we are all keeping our fingers crossed that this continues.
The Biden Jobs Plan
The idea of a major infrastructure plan was presented in late March and since has been estimated to be as low as $500B and as high as $2.25T. Whether the bill is signed through on the top or bottom of that scale remains to be seen but what seems certain is whatever goes through will have a major impact on local government procurement trends, as they will have to roll up their sleeves and fulfill the contracting of the goods, services, and products from commercial businesses.
The good news for communities is a signed infrastructure bill makes available funding that many communities have needed for years and being that so many of us in procurement are living within or near the communities we serve this is a welcome sight. However, the challenge we face will be procuring goods that we have never had the opportunity to procure before, most of us have the suppliers to do the electric, lighting, and construction work but many of us just don’t have the supplier locally to source the products and solution that would reduce the carbon footprint, introduce electric charging station and innovative clean energy technologies that are being funding by this infrastructure plan. And I’m not confident that the Tesla’s and ChargePoint’s of the world are reading our local newspaper waiting for us to put out an RFP as an ad. So how will we get the suppliers? How will we get the innovative companies that provide these solutions to pay attention to our needs, and what happens when there is a limited supply of companies that can match these standards. What will be the timelines to spend the infrastructure funds if we face these procurement challenges? This is one of the things we have to watch out for as the infrastructure plan moves from an idea to a bill.
The DBE Program Design To Address the Wealth Gap
The US government can greatly influence the distribution of wealth, being the largest consumer in the world of goods and services. In 1983 congress decided to pass the first DBE program, meant to help balance wealth across social, racial, and gender classes. Most economists agree that a more equal distribution of wealth across society leads to more innovation, strengthened public health, higher social trust, and better-resourced communities.
However, the intention of the program created to balance wealth distribution has not been achieved, and nearly 40 years later the Congressional Budget Office finds that the gap in the distribution of wealth is even larger than it was in 1983 and continues to grow wider every year.
Various things have contributed to this, lack of tools for governments to do outreach to the DBE community, lack of transparency, skepticism about the “good faith efforts”. What might be the biggest reason for this program to fall short of what it set out to do was that it was designed with the procurement processes of 1983 and is still being used in 2021 without updates to match the times. Asking procurement teams to solve and address contracting challenges of 2021 with procurement policies of 1983 feels like a near-impossible task.
As the spotlight shines brighter on the wealth gap in the US and the current administration looks at how to solve this challenge as the biggest influencer in the distribution of wealth it’ll be interesting to see how soon an update is made. Imagine if we all were still using computers built in 1983 to do our jobs of today, it would be way too slow and software too outdated to do accomplish tasks. That is what it must be like for procurement teams, we are asking them to address procurement trends of 2021 with procurement rules, processes, and standards of 1983.
The last year and what appears to be ahead of us have added elements that are changing the conversations being had in government procurement departments. Will, there be 4 songs played on repeat for years or will we be constantly switching the tune?