The pains of prolonged procurements
Published: March 07, 2015
Every state and local government agency is distinct, with its own rules related to procurement. Some have strict guidelines for vendors submitting a proposal, while others require state registration prior to even bidding. Regardless of the rules, one commonality routinely causes problems: drawn out procurement processes.
What constitutes a long procurement process? It depends on who you ask and also the technology being purchased. A simple request for quotes (RFQ) for 100 radios likely constitutes a straightforward procurement, while a customized jail management system for a statewide agency is more complex. For example, Connecticut issued a request for proposals (RFP) in September 2009 for an offender management system that still hasn’t been awarded. Details on the contract delay are sparse.
While the Connecticut procurement may be an outlier, it is not uncommon for bidding processes to take several months for multimillion dollar projects, which then lead to even longer timelines to award and negotiate a contract. Understandably, agencies want to ensure they select the best possible product for the best possible price, but at some point, this can be a detriment to both the vendor and the agency.
How the vendor loses
- Anticipated revenue following a win takes a hit during lengthy contract negotiations
- Hefty legal costs associated with negotiations
- Travel and other expenses related to contract meetings
How the agency loses
- Costly man hours spent reviewing bids and negotiating contract terms
- Technology advancements made during procurement timelines often result in negotiating a solution that could be antiquated
- Agency budgets, needs and wants can change drastically over the course of a long procurement
No single solution
Unfortunately, there is no silver bullet for long contracting and procurement processes. Agencies must be fully aware of what is required when reviewing a large, complex bid. They must also ensure budgets are secured prior to bidding to avoid dragging out awards due to limited funds. Vendors, on the other hand, must be patient and understand agencies may require more time for costly technology. Well-established timelines, budgets and game plans on both parts are required to achieve a swift and seamless procurement.