Since 2013, just about every article and newsletter I receive about government procurement is on cooperative purchasing or how to write a good RFP. Like a bad song on repeat or an old ballad that’s been remade too many times, these conversations are getting, well… boring.
Local government purchasing folks and procurement managers aren’t just talking about cooperative purchasing and writing a good RFP, right? What’s really at the top of their minds?
And, maybe most importantly, what trends and obstacles should other procurement teams prepare for during the rest of 2021?
You’re in luck; I’ve had the good fortune of working with procurement teams from California to Florida and have listened to many conversations being discussed right now. Sure, many are still talking about cooperative purchasing and writing good RFPs, but here are four new topics that are becoming more popular — and are only likely to get louder — throughout the second half of 2021:
Work from Home Is a Permanent Reality
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 the University of Chicago 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 when 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 teams were still using desktop computers instead of laptops, reaching for desk phones over mobile devices, and booking only physical conference room spaces to have meetings vs. turning to Zoom.
This caused plenty of initial headaches as staff reported using their cell phones from home to call suppliers about a procurement contract or job, scrambling with IT departments to set up remote logins, and quickly buying the basic versions of Zoom, Slack, and Microsoft Teams.
It didn’t take long for government organizations to catch on to the efficiency and benefits the private sector was experiencing with work from home. Within a month, governments were running finance meetings, logging hours, doing payroll, and 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 work week. With many states on the road to fully reopening, what will be the new norm and standard for government purchasing departments and the procurement contracts they work on?
We know some procurement teams went all-in as soon as they had to close their doors to the public, getting staff laptops, buying video conference licenses, and setting up infrastructure policies and workflows that allowed them to keep on procuring goods and services that aided their communities to operate smoothly even during the pandemic.
We also saw other procurement teams hold back on investing in tools to help staff work from home during the pandemic. Instead, they put in place band-aid policies like having procurement managers and teams fill out forms estimating the hours they used their cell phone for work calls and reimbursing them or scheduling hours for each individual to come into the office during the week to make copies of the forms they needed to use, or even pausing the procurement process 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 to employee retention? What will the total cost be of losing a key staff member due to the ensuing frustrations?
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 compete for employees. A staff member may leave because they’re required to be back in the office 100% of the time, but the neighboring city’s procurement department is offering the continued freedom to work from home. These changes are causing conversations at the real or metaphoric “water cooler” to last quite a bit longer, and they will likely continue to be top-of-mind during the rest of 2021.
Procurement Managers, Teams, and Departments Seen as Heroes
Remember the days where the only news the public ever heard about government procurements was when there was bad news? Like when a project didn’t finish on time, or when a project went over budget, or there was an accounting error?
I can’t lie and say those days are 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 parks and trails during the pandemic, thanking parks and recreation departments for keeping these areas clean. Nurses were thankful to government buyers who were able to find a supplier for face shields, and there were even interviews with teachers who were glad to have new technologies to teach their students.
This last year shined a light on how vital a procurement manager, their team, and the entire department are to keeping a community operating smoothly. Maybe this is the new trend, as the citizens of our communities start to see procurement folks as the unseen heroes behind everything that operates and works as it should.
Those of us on the receiving end of these comments can’t help but smile, and we’re all keeping our fingers crossed that this appreciation continues.
The Biden Jobs Plan Could Be Hard to Accomplish
In 2021, the federal government also took a bolder approach to policy with a major infrastructure plan presented in late March 2021. The passage of the plan through the Senate secured at least $1T in infrastructure spending. The bill now goes onward to Congress and will ultimately have a major impact on local government procurement teams, as they will have to roll up their sleeves and source the contracting of the goods, services, and products from commercial businesses.
The good news for communities is a signed infrastructure bill makes funding available that many communities have needed for years. However, the challenge we face will be procuring goods and services that we have never had the opportunity to procure before.
Most of us have the suppliers and procurement contract experience to do the electric, lighting, and construction work, but many of us just don’t have local suppliers to source the products and solutions that would meet the infrastructure plan’s requirements for reducing carbon footprints, introducing electric charging stations, and innovating with clean energy technologies.
Plus, I’m not confident that the Teslas and ChargePoints of the world are reading our local newspaper, waiting for a procurement manager 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 and 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? These concerns and many more are some of the things we have to watch out for as the infrastructure plan moves from an idea to a bill.
The DBE Program Needs Modernization to Address the Wealth Gap
Historically, the U.S. government can and has greatly influenced the distribution of wealth, as it’s the largest consumer of goods and services in the world. In 1983, for example, Congress decided to pass the first Disadvantaged Business Enterprise (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 elements have contributed to this gap, including a lack of tools for governments to do outreach to the DBE community, a lack of transparency, and overall skepticism about “good faith efforts.” The biggest possible reason for this program falling short of what it set out to do is that it was designed with the procurement process of 1983 in mind, and unfortunately, these processes are still being used today without any update to match the times.
Imagine if we were all still using computers built in 1983 to do our jobs of today; it would be way too slow and the software too outdated to accomplish most tasks! That’s what it must be like for procurement teams when we ask them to address procurement goals of 2021 with procurement rules, processes, and standards from 1983.
Asking procurement managers and teams to solve and address upcoming contract challenges with old policies feels like a near-impossible task. As the spotlight shines brighter on the wealth gap in the U.S., 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.
Both 2020 and the first half of this year have inevitably impacted the conversations about government procurement departments and what the remaining months will look like for these teams. Let’s hope the four trends covered here won’t be played on repeat for years to come, and that they actually change and improve the way public procurement happens across all states in 2021 and beyond.
Written by: Steve Tran, VP of Network
Want to learn more about the Infrastructure Bill? Watch this recorded live webinar on the future of our country’s infrastructure, here: Webinar – Preparing for the American Jobs Plan.