It’s Time To Rethink Government Purchasing

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COMMENTARY | State and local governments are exhausting their vendor lists. It is time to rethink what can be standardized across jurisdictions—and with it, how we purchase.

Over 90,000 local and state governments are looking more than ever for help from the private sector. Now, they just need to make it easier to do business with them.

Over the last decade, public spending on private businesses has increased almost every year. Many of the functions that governments are called on to perform these days are simply too complicated to do on their own. Digital services, case management, direct care, health and human services and ever more complex engineering projects are often too much for the overstretched public sector.

At the same time, state and local governments are realizing that they need to take care of public works projects that have been put off for far too long. There is so much demand for private sector vendors that governments are literally exhausting their current vendor lists.

Governments need more qualified businesses to bid on all the work that’s out there.

To put more businesses to work, it’s time for the public sector to rethink how it goes about soliciting bids. Simply put, the entire process needs to be standardized.

Individual governments have done a phenomenal job of making it easier for companies to compete for contracts. But the problem is in the aggregate. The way things stand now, companies have to meet various standards and certifications depending on which city, state, or federal government entity they hope to work for. You can have the simplest, most easy-to-use procedure in the world for one government, but that doesn't change the fact that, from a vendor's perspective, they have to repeat the bidding process 89,000 different times among governments if they want to get full coverage of the United States.

Governments need to collaborate with each other to produce uniform standards for their private sector bidders. They should move to a marketplace approach that marries government buyers with a shared supplier community online. This would help reduce costs and hassles for vendors, and help the government by generating more competition for their projects.

Imagine, for example, if there were one government purchasing network for the state of Washington. Vendors would then have a single place they would need to go to upload certifications and get them verified. Then a city like Auburn, just to name one, could easily narrow the field of businesses down to suit their needs.

“Piggybacking” off of state and local contracts, and a strong, vibrant ecosystem of cooperative purchasing organizations already helps governments purchase more efficiently. However, much more needs to be done to level the playing field for all businesses to compete for opportunities to serve their community.

Imagine if purchasing officials had one registry to easily see which vendors were vetted to meet the standards of third-party companies, and which have certificates from the state or other municipalities. They could also quickly identify for their authorizing environment which vendors are local, and which are minority, woman or veteran owned.

Standardization is a trend that will continue to drive efficiencies and value for governments. Just as governments increasingly turn to shared and master contracts, they will increasingly find value with a shared supplier database, where one business can register once to do business with all governments that serve their community.

Government is getting much better at developing private partnerships. Procurement officers will be well advised to identify and onboard the best and the brightest of this new wave of partners and bring them into the fold.

Ben Vaught is CEO of DemandStar

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