BEHIND THE VEIL: The Truth About Public Sector Procurements

Public Sector Perspectives 

Behind the Veil:
The Truth About Public Sector Procurements

In my opinion, most vendors over-estimate the value of peripheral players in public sector “IT” procurements. Vendors assume “internal” peripheral players, such as the state CIO, governor’s office and legislature, ultimately decide which vendor wins a specific procurement. This is not true, at least not in most states. At best they play a minor, indirect role.

The state CIO and the governor’s senior staff are important in relation to what problems will be addressed through procurements and helping to secure needed funding.  The legislature’s role is to adequately fund the solution, including the procurement. All of these actions are done before any procurement is issued and sometimes can be influenced by “external” peripheral players (vendors or lobbyists) through education or political intervention.

Once a decision is made to proceed and the funding is secured, the CIO normally asks staff to prepare a request for proposal (RFP), which is then vetted by the CIO to ensure compliance with the established “IT” vision. Often, agencies impacted by the procurement are invited to participate as evaluators of the RFP. As such, they probably will help craft or review a draft of the RFP prior to its release. If the draft RFP is presented to the vendor community for comment there is an opportunity to suggest changes to make the procurement more competitive. However, self-interested recommendations from any vendor likely will be rejected.

Once the procurement is issued, the ability for “external” players to influence the outcome is very limited. When a vendor’s proposal is selected, the only option for recourse unsuccessful vendors have is to stop the procurement or seek a re-bid. Normally that can be accomplished through official protest or “external” players seeding uncertainty with either the Governor’s Office or the legislature that the procurement process was unfair or the solution is seriously flawed. Most likely the legislature would need to convince the Governor’s Office to cancel the procurement since they have no direct control over government operations, except as a funding source.

The greatest value “external” players can have in guiding procurements toward their solutions begins early in the process, before the RFP is issued. Developing a strategy in advance helps the vendor’s team (including their lobbyists) better assess the needs of the state, be proactive seeding ideas for improvement, educate concerning best practices and success stories, and establish the vendor as a thought-leader. There is value identifying key agency staff, in addition to the CIO, that most likely will be invited to be RFP evaluators on specific-type procurements and continually educate these individuals on the merits of the vendor and its solutions. Obviously this needs to be done well in advance of any RFP issuance. Bottom line—the quality of a vendor’s response to the RFP, as perceived by the evaluation committee most likely will determine the outcome of any procurement. Therefore, the evaluation committee has the most control over the outcome of any procurement.

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