Technology is one of the biggest challenges faced by government agencies. For years, antiquated procurement processes stood in the way of businesses hoping to win the big bucks that often come with state and local government IT contracts. For the benefit of all, that’s changing.
Technology is one of the biggest challenges faced by government agencies. This is especially so as they are actively looking to the private sector to provide solutions. For years, antiquated procurement processes stood in the way of businesses hoping to win the big bucks that often come with state and local government IT contracts. For the benefit of all, that’s changing.
Procurement improvements can’t come soon enough. Consider the recent response to the Coronavirus (COVID-19) pandemic. Many government agencies are struggling to operate virtually while their employees stay at home. The technical infrastructure is simply not in place. Networks need to be secured. Remote teams and effective communication strategies need to be rapidly put together to address the issue. In general, most governments aren’t set up to move quickly.
Electronic bidding is a crucial tool at times like these, as agencies that use e-bidding are able to speedily access emergency supplies and those that still rely on outdated methods suffer delays. That can make the difference between governments operating as close to normal as possible during a crisis and failing to provide public services.
During the pandemic, Washington Governor Jay Inslee made his state the first to help remove some of the challenges faced by procurement officers by declaring a State of Emergency, a move nearly every state across the country made shortly after, thereby removing procurement requirements nationwide. This allowed city governments to purchase urgently needed supplies outside of the normal request for proposal (RFP) process. When this happens, the city is most likely to go to a trusted vendor.
E-procurement, including online bidding, is one area where government is evolving and can greatly assist procurement officers during emergency situations like the pandemic to provide the best solutions to their communities. As more agencies seek to simplify their procurement practices through digitalization, tech companies are finding it easier to learn about and respond to opportunities. IT industry decision-makers need to be prepared to act quickly and thoughtfully if they hope to win a contract. The payoff for those who do is usually very lucrative.
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Public sector opportunities for IT businesses
State and local governments reported more than $3 trillion in direct general expenditures in fiscal year 2017, according to U.S. Census Bureau dataOpens a new window . Governing reportsOpens a new window that states, cities and counties are expected to spend a record $111 billion on technology in 2020.
With those kind of dollars, government contracts are an excellent way to grow a small business. Moreover, they are somewhat recession-proof. IT contracts include everything from network design to cabling jobs and ongoing software licenses. Many cities are now looking for partners to help them create accessible websites to comply with the Americans with Disabilities Act.
Winning a series of contracts can make the difference between hiring more people and growing versus just getting by.
Procurement digital transformation
Historically, government work has been somewhat out of reach to small businesses and startups. Procurement officers expected a company to wait months, even years, to get paid.
In an effort to open their doors to more diverse and innovative workforces who can help improve communities, governments are streamlining procurement and becoming more nimble. Manual practices are being replaced with 21st-century answers.
In a 2019 reportOpens a new window , Governing Institute highlighted emerging trends based on a survey of procurement officials in 28 states and the District of Columbia. Researchers “learned that data and analytics are now driving all parts of the procurement process, a sign that states are seeking to be more responsive and flexible. While gaps remain — such as in using technology to improve the customer and vendor experience — states in general are moving toward a more modern approach to buying,†reports GoverningOpens a new window .
The National Association of State Procurement Officials’ 2018 Survey of State Procurement PracticesOpens a new window found that all but one of the 48 responding jurisdictions use an electronic procurement or enterprise resource planning (ERP) system.
We are also starting to see legislation that mandates the move to online bidding in order to simplify workflows. New Jersey passed a law that made it acceptable for government entities to use e-bidding in their procurement processes, and Louisiana approved legislation requiring it for cities above a certain size. When an agency moves to e-bidding, vendors no longer have to submit hundreds of pages of documents in person. Advantages for governments and vendors include more accurate bids as the software checks that proposals are complete. Agencies also benefit from transparent spending, accelerated timelines and easier compliance with procurement requirements.
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These changes are in line with what contractors have been asking for all along.
“Suppliers are eager to submit bids online, and they would like to find out within days whether or not they will be given a contract,†wroteOpens a new window Boston Consulting Group, which advises public agencies to automate where possible. “By building a simple web portal that lists acquisitions, posts announcements, accepts bids and provides feedback to suppliers, agencies can lower the barrier to entry and broaden their pool of suppliers.â€
Tech companies need to be prepared to adapt
The move to digitalization means tech companies should be prepared for increased competition for government contracts. Increased competition means more contracts to manage and that will require effective contract management software as we go forward.
IT businesses have the option to subscribe to third-party platforms that keep them informed of government quotes and RFPs and allow them to respond online. This can save time and resources over directly contacting agencies. During emergencies when governments are looking to rapidly access suppliers, third-party e-bidding platforms can instantly make those connections.
Providers offer a wide range of features. It’s best to choose a company that has relationships with governments. Many others rely on scraped content. The problem with this business model is that suppliers generally miss a day or two in getting the bid, sometimes longer if the bots are kicked off the sites they are scanning. In emergency response situations, this extended delay may be too long. Most bots miss amendments, which can mean a vendor doesn’t get a job.
Ideally, a tool should allow a business to view bids across multiple agencies, respond instantly and ask a question of the procurement officer. Certain platforms will even allow a company to find out which competitors are also responding to bids and RFPs. Since governments want to work with businesses owned by minorities, women and veterans, decision-makers should look for a e-bidding system that allows the business to apply its certifications.
Increased competition also means tech companies need to communicate value when responding to RFPs, as more governments shift away from simply accepting the lowest bid. All but one of the states in the Governing Institute’s survey ranked best value above low price.
Government procurement processes may still be imperfect. But with digital solutions making access to bidding easier than ever and with so much potential revenue on the line, IT companies would be smart to consider the public sector as a vital business partner.
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