Should we have procurement reform or just improvement?
- By Bob Lohfeld
- Oct 16, 2014
It seems like everyone has been jumping on the procurement reform bandwagon this year and has been saying that the government’s procurement system is broken. While reforming government procurement is a lofty goal, and resonates well in the halls of Congress, the practicality is that it is more of a pre-election battle cry than a reality.
One organization, the Association of Proposal Management Professionals (APMP), has taken a different approach, stating that the Federal Acquisition Regulations (FAR), the rules that control government procurement, are fine and do not need to be overhauled. What is broken is the way the FAR is applied and interpreted in many government procurements.
According to APMP in their just-released survey report, Closing the Procurement Execution Gap, most government and industry professionals strongly agree about what improvements need to be made and how they can be done without reforming the FAR. I hope that business development and capture managers will share APMP’s findings with government procurement officials and help spread their recommendations about how to conduct better procurements. Here are some of the more interesting findings.
Limiting LPTA to Commodity Buys
Using lowest priced, technically acceptable evaluation criteria for services bids has been increasing, yet the APMP survey of over 500 professionals in government and industry involved in government procurements does not support this trend.
According to the survey, 81.8 percent of industry respondents and 71.7 percent of government respondents recommend limiting LPTA procurements to commodity bids. These results are very similar to those found in Washington Technology’s own survey, LPTA: A Hate-Hate Relationship. Most industry and government respondents are in strong agreement that LPTA bids should be curtailed to commodities.
Get Access Early in the Procurement Process
Serious bidders are always interested in gaining access to the government in the early stages of a procurement to better understand customer needs and help government understand what capabilities exist in industry.
The government refers to this early-stage interaction as market research. The APMP survey asked industry how well this process is working, and the results point out that this is a good area for further improvement.
Only 18.4 percent of industry repondents said the government almost always responds to their queries and is generally available to meet with representatives from their companies.
Most industry respondents (52.9 percent) said the situation was more challenging and they can sometimes get meetings, but those meetings are difficult to get. Some said the government generally avoids their requests (14 percent), does not return emails or phone calls, and does not want to meet with their organizations. Finally, 14.7 percent said they didn’t know if this was working or not.
Keeping Communications Open with Industry
FAR 15.201 states that, “after release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors.” Some procurement officials are moving the communications cutoff date to the left and closing down communications with industry well before RFP release.
Some agencies cut off communications when a draft RFP is released and some even earlier when an RFI is released. I have even seen one agency close off communications after completing their market research effort and initiate the communications blackout period more than a year before RFP release.
The survey showed that 93.3 percent of industry and 73.9 percent of government recommended keeping communications open until final release of the RFP. Clearly, there is strong agreement that communications between industry and government should remain open until RFP release and not cut off prematurely.
Using RFIs to Prequalify Bidders
The government uses requests for information (RFIs) as part of their market research to help set technical requirements for future procurements and decide procurement strategies. Some procurements use RFIs to screen potential bidders and then discourage unqualified companies from bidding. The survey asked respondents if they favored using RFIs to prequalify bidders and then have the government create a short list to receive the final RFP.
There was strong agreement among government and industry that this was a good idea—78.4 percent of industry and 74.4 percent of government favored using RFIs to prequalify bidders.
Improve Effectiveness of Industry Days
Industry days are events where the government invites bidders to attend a procurement announcement meeting and presents the requirements for a planned procurement. Often, bidders will fly in multiple people for these meetings only to discover that everything the government presented was already in the published RFP.
The result is that industry representatives come away saying they didn’t learn anything from the meeting that they didn’t already know.
Some agencies use industry days as an opportunity to engage in one-on-one discussions with bidders after the general briefing to industry. This practice has been well received by both government and industry, and the survey confirms this finding with 87 percent of industry and 73.9 percent of government agreeing that industry days should include one-on-one meetings with prime bidders.
Proposal Instructions Needed
Often government releases draft RFPs without including the proposal instructions and evaluation criteria. Industry uses these draft RFPs to make early bid decisions, but without the proposal instructions and evaluation criteria, companies don’t have all the information needed to make good pursuit and/or bid decisions.
Most companies start writing their proposals upon draft RFP release, but without proposal instructions and evaluation criteria, they risk that whatever they write will not be usable upon final RFP release.
In the survey, there was moderate agreement about releasing complete draft RFPs with 86.8 percent of industry and 66.7 percent of government agreeing that draft RFPs should include proposal instructions and evaluation criteria. Industry needs to do a better job of communicating the importance of having proposal instructions and evaluation criteria in draft RFPs. If government better understands the importance of this, we will begin seeing more complete draft RFPs being released.
Communicate RFP Release Dates and Delays
When RFPs are not released on time, the cost can be extraordinary to industry. In anticipation of an RFP release, bidders begin to assemble their team of managers, subject matter experts, and proposal writers by pulling them from other assignments in order to be ready when the RFP drops.
When the RFP is not released on schedule, bidders often keep their proposal team in place—especially when a short delay is expected. However, short delays have a way of turning into long delays, and soon each bidder will have spent a small fortune keeping their teams on standby for an imminent RFP release.
In the survey, 95.6 percent of industry and 69.5 percent of government agreed that government must do a better job of establishing RFP release dates and then update them when there is a delay.
Respondents recommended that government use a website to update the RFP release date frequently once they issue a draft RFP. From the survey statistics, it is clear that industry feels the pain when RFP release dates drift to the right, but not all government procurement personnel understand the critical importance of having an accurate RFP release date and keeping industry informed of delays.
Reducing the Frequency of Protest
If government and industry communications improved, there would be fewer protests. The survey confirms this belief, in part, with 50.9 percent of industry and 20.5 percent of government respondents believing that there would be fewer protests if the government better communicated requirements and problems with industry proposals.
Since industry files the protests, not government, I’ll lean on the industry statistics to substantiate the position that better communications may mean fewer protests. Surprisingly, 61.5 percent of government respondents and only 26.8 percent of industry respondents believe that there would be fewer protests if the government put more rigor into their proposal evaluation process and made sure they evaluated each proposal carefully against the stated evaluation criteria.
Only 22.3 percent of industry and 17.9 percent of government thought that more-effective debriefings for the losing bidders would reduce the frequency of protests.
Both government and industry want good and effective procurement, and everyone wants the government to get the best products or services at a good price. This is the underlying premise for best value procurements.
When we fail to accomplish this, we all lose. We are all in this together, and we can all succeed together. Better procurement is a win-win proposition.
There are many recommendations in the report with the data to substantiate them—download a copy.
If you have other recommendations for better procurement, you are welcome to write them in the comments section below.
Bob Lohfeld is the chief executive officer of the Lohfeld Consulting Group. E-mail is email@example.com.