Government contracting by its nature is a legal process, not a sales process. At the end of the day, laws and regulations control the process, not a nice dinner, a trip to the golf course or a simple proposal outlining the benefits of your product or services. Instead, selling to the government is an act of patience, paperwork and polish across a variety of channels. If laws and regulations are not followed, the contract will be terminated.
Because the process involves laws, there’s an understandable apprehension about making sure to avoid mistakes. No one wants to be accused of unfair competition or of public corruption. Given how competitive the market is for government contracts, and the politics inherent in the system, it’s pretty understandable why government officials may be reluctant to engage in exchanges. They may have some level of fear about a protest, or about binding the department in an unauthorized way.
This hit me like a ton of bricks a few months ago. In a conversation with a procurement officer from one Arizona's municipalities, the officer said that the city’s new policy is to create a two-year pipeline of potential technology projects. Once the city places a technology project on the list, the city ceases all vendor communications until contract award, unless authorized with a procurement official.
Two years. Let that sink in. How quickly does technology change in two months? To rely on busy procurement officers and government officials to know everything available in the market for the forthcoming two years is astonishing to me. Sure, you can surf websites, but that doesn’t provide any level of detail on how something will work in a particular government program. And, not all companies are featured in Government Technology Magazine or pay to sponsor the local technology conference. That doesn’t mean that their product or service is any less valuable; in fact, it could be a better fit for government.
The decision to restrict communications with industry is a losing proposition. Here are some reasons why:
Duty to be Informed. With billions in expenditures annually on contracts for products and services, the government has an obligation to conduct purchasing decisions in the most effective, responsible and efficient manner possible. That means that access to current market information is critical for procurement officers to define requirements, develop procurement strategies, evaluate small business participation and negotiate contract terms. Industry partners are often the best source of marketplace information so that government can buy the most effective solution at a reasonable price.
Nothing in the Procurement Code: The Arizona procurement code does not prohibit vendor communications before a solicitation. Instead, one of the purposes of the code is to “maximize to the fullest extent practicable in purchasing value of public monies.” You can’t do that if you don’t know what is available in the market.
Protests are Rare. The goal of any state or local agency should be attaining the best procurement outcome. Speaking with vendors oftentimes improves the process by highlighting features, services and pricing options. As long as procurement officers conduct responsible, meaningful and constructive communications during procurement, circumstances that could create a reason for a bid protest do not exist. It’s when procurement officers restrict communication or try to make a procurement “protest proof” that questions around government transparency and fairness increase and are more likely to result in a protest. Some vendors may even use the protest process to get more information about the procurement.
There is Time. Schedules are important and meeting with vendors does take time, depending on the scope and extent of conversations. However, robust pre-bid communications may actually save time and result in a better procurement and contract performance, especially as the project grows in complexity. Looking back at some of the contracts that have been riddled with delays and cost overruns, and having represented companies in the process, many times the department chose not to meet with the vendor community early on to solicit input. When this happens, the government oftentimes does not have a clear understanding of the business or technical requirements. Looking at the big picture, it is worth the time to have discussions.
It’s More Than Products and Services. Learning about the latest and greatest developments in the market is valuable, as I’ve mentioned. However, getting vendor feedback on pricing, terms and conditions, like small business set-asides, is also important. Communicating with vendors on these topics as early as possible may alter the government’s approach and result in increased competition, more small business participation, lower prices and streamlined negotiations.
While departments certainly aren’t required to meet with each vendor at every step of the procurement process, early, frequent and constructive engagement with industry leads to better procurement outcomes. It’s really that easy. Instead of focusing on how to prevent talking to vendors, state and local government officials should think about how to improve their vendor relations and ultimately get better results for all involved.