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

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

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.

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.

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

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

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

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

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

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

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

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

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