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Pursuit of Painless Procurement

Pursuit of Painless Procurement. Richard Mordaunt Director of IT & Office Procurement, OSD Commonwealth of MA December 12, 2007. An Irreverent View of Procurement.

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Pursuit of Painless Procurement

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  1. Pursuit of Painless Procurement Richard Mordaunt Director of IT & Office Procurement, OSD Commonwealth of MA December 12, 2007

  2. An Irreverent View of Procurement The RFP process is highly flawed. Buyers issue documents that often provide a distorted, incomplete, or inaccurate description of the problem. This is not their intention but simply the result of many different people trying to describe a complex requirement or a difficult problem. Suppliers then take this information and interpret it in the light of their own knowledge and product offerings and develop their proposals. http://www.wrtech.com/rfp_advisor/final_offers.html

  3. Risk in the Procurement Process • “Risk is directly related to the successful achievement of targeted goals and objectives …Risk management is an interactive process… complicated by the dynamics of the internal and external operating environments.” - from Risk in Public Contracting, Elisabeth Wright, Ph.D. published by NIGP • Planning, monitoring, anticipating change, and proactive oversight immediately impact the success of contract’s stated outcomes.

  4. Actions to Minimize Risk • Take actions to deflect potential issues long before they arise. • Make every effort to ensure the reality and perception of a fair, open and competitive procurement. • Openly communicate with all potential bidders through Comm-PASS. • Communicate early and often. • Use every opportunity to make sure all bidders understand the RFR objectives, requirements and desirable components. • In the RFR include background and current status information so no company has an “inside track” in a solicitation. • In the RFR include a list of components that will be evaluated.

  5. More… • Document your research (See handout) • Decide on content areas for the procurement document (See handout) • Avoid specifications that are atypical for the industry of the procurement • Use the Comm-PASS Forum to host Questions & Answers and announce a Bidders Conference • Use the Comm-PASS Solicitation for a RFI, early announcement, procurement documents and procurement schedule • After the Bids are in - Use Best and Final Offer (BAFO) See: • The Procurement Information Center - http://www.mass.gov/Aosd/docs/pic/procure.doc • RFP Advisor - http://www.wrtech.com/rfp_advisor/final_offers.html • Other publications

  6. Successful Procurements Can be Win for Both Buyer and Seller Joan Shea, MA Deputy Comptroller Adjunct Prof, Suffolk University

  7. Buying Technology • Challenges in buying technology are not unique to current period • Principles in successful technology procurements are similar to other types of purchasing • KSG case based on Civil War arms procurement – rate of change equal to that seen today in IT

  8. Civil War Arms Case • Different objectives based on gov’t branch • Competing technologies with significant changes in evolution of options • Organizational resistance • Reluctance to take risk on latest, unproven solution • Stakeholders targeted by sales staff – managing access to assure accurate information provided to key decision-makers

  9. Civil War Arms Case (cont.) • Union “HOPED” for quick victory • Unrealistic expectations • Press reinforced perception of superiority of the Union • Competing forces/agendas within the administration • Competition for scarce resources • Focus on control vs. management

  10. Civil War Arms Case (cont.) • Technology strategy must follow business strategy • Business strategy not clear in Civil War case • Not always clear in procurements • Different perspectives within organization • Executive sponsorship key (actions, not words) • Early buy-in increases likelihood of success • Bleeding technology – great potential but greater chance for disaster: requires risk-taking

  11. Critical Success Factors • Importance of understanding requirements before looking at any products • Functionality to be supported • Priority of features and functions • Legacy considerations • Desirable and optional vs. required features • Loose requirements increases the difficulty of comparing vendors

  12. Critical Success Factors (cont.) • Know your options • Assess the market • Estimate potential costs/prices • Merit in NOT pushing advanced technology unless the business need requires it • Focus of TCO not lowest cost • Terms and conditions are key and should be included in the RFR

  13. Critical Success Factors (cont.) • Detailed, specific requirements and RFR process benefit both bidders/purchasers • Process needs to be structured to be a win-win • Good vendors prefer smart clients • Bankrupt vendors cannot deliver good service • Relationship during the bidding and negotiation process sets the stage for long-term interactions

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