Procurement Myth-Busting - Putting Misconceptions to Rest

Many companies are on missions to improve their procurement processes. One technique that caught my eye is an approach used by the U.S. government, which started in 2011 when the Office of Federal Procurement (OFPP) , a unit of the Office of Management and Budget began disseminating a series of “myth-busting” memos.

The concept is interesting because it is aimed at helping procurement people (many of whom have been in their jobs for their entire career) realize that policies and practices are much different than what they have learned over the years. The first memo explains that “with expenditures of over $500 billion annually on contracts and orders for goods and services, the federal government has an obligation to conduct our procurements in the most effective, responsible, and efficient manner possible.”

So what are some of the common myths? One is a major misconception that the government can’t meet one-on-one with potential suppliers as they seek the best way to develop a strategy or prepare for a competitive bid. Sadly, many in government procurement believe this is not allowed, because talking to one supplier can unfairly disadvantage other suppliers that are not also called into meetings.

The myth-busting memo sets it straight, pointing to the Federal Acquisition Regulation (FAR), in Part 15, which actually encourages exchanges of information with interested parties during the solicitation process; this then ends with the receipt of proposals. “There is no requirement that the meetings include all possible offerors, nor is there a prohibition on one-on-one meetings,” the memo says.

The consequences of not talking to suppliers is dire because it means the people writing the bids are failing to get the needed information and market research to do their jobs. Or worse (and yes – we found it really does happen in our own research) people simply take the old bid documents and just reissue them!  For example, a contract for refuse management was put on the ‘repeat’ cycle for so many years it failed to incorporate all the great improvements and innovations that had occurred in how to incorporate and manage recycling requirements.

Another misconception is that communication with contractors is like communication with registered lobbyists, and since contact with lobbyists must be disclosed, additional communication with contractors will involve a substantial additional disclosure burden, so it’s better to avoid such meetings. But the fact is that disclosure is required only in certain circumstances, such as for meetings with registered lobbyists, and many contractors do not fall into this category; “even when disclosure is required, it is normally a minimal burden that should not prevent a useful meeting from taking place.”

In another memo, the office focused on debunking the notion that supplier  debriefings after a competitive bid “always lead to protests.” On the contrary, the office noted that an effective debriefing process “can greatly reduce the frequency of protests, as protests are often driven by a desire to obtain additional information - information that should otherwise be available via a proper debriefing.”

Further, according to data in the Government Accountability Office’s (GAO) Bid Protest Annual Report to Congress, “the most common reasons why unsuccessful offerors file protests is related to issues with the evaluation criteria in the solicitation. Although offerors have access to the evaluation criteria, they often lack substantive insight into how the source selection officials assessed the proposal’s strengths and weaknesses.”

Since the original myth-busting memo in 2011, the OFPP has issued three myth-busting memos.  

Bottom line?  I love the concept of an official myth-busting campaign. It is smart because it acknowledges that procurement practices and misconceptions are slow to change and that it is far easier for people to continue to do the same thing they have always done rather than the change – especially for large and bureaucratic organizations such as the federal government.

Kate Vitasek, Educator and Expert, University of Tennessee

Kate Vitasek is an international authority for her award-winning research and Vested® business model for highly collaborative relationships.   Vitasek, a Faculty member at the University of Tennessee, has been lauded by World Trade Magazine as one of the “Fabulous 50+1” most influential people impacting global commerce.    Her work has led to 6 books, including: Vested Outsourcing: Five Rules That Will Transform Outsourcing, Vested: How P&G, McDonald’s and Microsoft Are Redefining Winning in Business Relationships and Getting to We: Negotiating Agreements for Highly Collaborative Relationships.

Vitasek is known for her practical and research-based advice for driving transformation and innovation through highly-collaborative and strategic partnerships.   She has been appeared on CNN International, Bloomberg, NPR, and on Fox Business News.  Her work has been featured in over 300 articles in publications like Forbes, Chief Executive Magazine, CIO Magazine, The Wall Street Journal, Journal of Commerce, World Trade Magazine andFuture of Sourcing.