With Federal spending being curtailed in many areas, how can better communications in the procurement process be part of the cost savings process?
Macro-economic, political and financial issues have combined to put the most serious squeeze yet on Federal spending. Real change is upon us. One area that gets some—but perhaps not enough—scrutiny in terms of improvements and efficiencies is the Federal procurement process.
For those outside the public sector, lack of understanding of the Federal procurement process is a major barrier to entry. Even to those with plenty of experience, the procurement process always seems to be shrouded in mystery as every agency, contract and contract office is run differently. The mystery of the Federal procurement process comes from the requirement to follow a certain set of rules (the Federal Acquisition Regulations, or FAR) whose stated purpose is to “deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives”.
One FAR requirement is that once a formal procurement has begun, any direct communication between potential solution providers and the business people who own the business problem must be cut off. At that point any communication is handled through the contract office, often in some form of mass communication. This restriction comes out of the desire to avoid any appearance that one bidder had an unfair advantage due to information the others did not have. This is an admirable goal, but in reality it is a situation that is very hard to avoid. There is almost always information that certain parties (such as incumbents and those already working in the organization) have that others do not. But more importantly, during a time when agencies are looking to squeeze every bit of value out of their budgets, this restriction creates a large hidden cost that agencies end up bearing.
The hidden cost of the restriction comes from this: In order for any large organization to find high value solutions to unique and complex business problems (such as those of government agencies), the potential solution providers must have a deep understanding of the organization’s business problem. The deeper the understanding of the business problem, the more expertise solution providers can bring. This also results in a higher value solution proposed at a lower overall cost to the government. This deep understanding comes from spending time face-to-face with those that own the business problem(s), asking questions, and listening. Restricting this type of communication between solution providers and business people at the most critical time in the solution development process creates an unnecessary barrier to achieving the desired result. In addition, limiting information means solution providers bear more risk on proposed solutions, which then gets factored into the final pricing, and results in higher costs to the government.
A better approach would be to plan for continued direct communications between the business-side and qualified firms throughout the procurement process, even after the RFP is “on the street”. There could be an upfront process to qualify potential bidders, so the business people are not wasting time with unqualified firms (i.e. a down select). Communications could be of a formalized nature to ensure fair and equal treatment; for example, each qualified firm could spend 60 minutes with the Program Manager and team each week during the final solution development phase. Or the business problem owners could host a weekly conference call open to all solutions providers during the weeks leading up to proposal submission. However it is done, this back and forth interaction during the critical solution development phase would improve the overall understanding of the business problem and ultimately enable the government to get better solutions at better prices.