Procurement Perspectives: Working in a market-based economy

In a market-based economy, a strong argument can be made that supporters and their customers should look after their own respective interests.

Ideally, every large business should have a dedicated staff member who is experienced in winning government contracts. The reality is that most do not.

Since municipalities generally benefit from receiving more competitive bids than less, the onus falls upon the purchasing department of each municipality to provide reasonable support to bidders, so that the maximum number possible are put in a position to submit a competitive quote for a tender or RFP. Providing the above training serves this purpose.

However, the responsibilities of the purchasing department do not end there. The tender or RFP documents need to be scrutinized before they are issued by a municipality.

The fundamental goal of this process is to facilitate the understanding of the prospective suppliers as to what it is that the municipality is trying to buy.

One lives for the day when some municipality wins the Nobel Prize in literature for its front-end tender documents.

However, even if that day is unlikely to come, there is no reason why such documents should look and read like they have been put through a blender.

Logically organized, clearly written documents are much more likely to attract supplier interest than written documents that can only be understood after Herculean effort.

Municipalities can also do much to improve their cause by streamlining tender and RFP procedures to produce a more efficient proposal.

The rules that must be followed to submit a compliant bid should be clear in meaning and easily found by the supplier. Far better that a supplier realizes that it is not eligible to bid immediately, rather than going through the effort of having prepared and submitted a bid that is subsequently disqualified.

Generally, municipalities should work with their suppliers to narrow the qualifying criteria to as great an extent as possible.

Where there are doubts as to whether a particular product meets a given performance specification, the manner can usually be resolved by a relatively simple test.

In the case of successfully managing a major project it requires a blend of business expertise as well as a project management and communication skills.

Major capital projects invariably involve a change process which must be facilitated effectively to avoid an adverse impact on municipal services.

Without a suitable mix of skills applied to the management of the project, the probability of project success is decreased considerably.

Minor problems will escalate in importance rather than be quickly and inexpensively resolved. If any major problems are encountered, the project is likely to end up in trouble.

Ineffective project management is often a major contributor to the development of problems with a project.

Effective project management is largely the product of learning from experience.

The goal of this process is not just to maintain existing supply relationships. It is to expand them.

As I have discussed in previous articles, many private sector entities shy away from competing for government work.

One of the most common reasons advanced in explanation to their reluctance to bid is that government work is subject to “too much red-tape.”

From the context in which this term appears, it would appear many businesses shy away from government work because they have had bad experiences resulting from the exacting demands imposed on the conduct of a government contract under the law of tender.

In a disturbing high number of cases, highly qualified bidders fail to submit a qualified bid.

Bids are received too late (perhaps a minute or two after the closing of the tender), or are missing certain information (e.g., consents to security background checks) or components (e.g., bonds or other bid security).

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.