Chapter 41 Chapter 14 Purchasing for Government and Institutions

2 Purchasing for Institutions Schools Hospitals Zoos Prisons Libraries Museums etc.

3 Characteristics 1. Clerical Purchasing 2. Broad spectrum of purchases 3. Deal with difficult people (professionals) 4. Backdoor selling 5. Pressure for reciprocity 6. Great potential for improved practices

4 Organizations National Association of Education Buyers (NAEB) Purchasing Co-operatives Educational and Institutional Cooperative Service (E&I) sponsored by NAEB Broadlane (Purchasing Co-op for Health Care Industry)

5 Purchasing for Government Municipal County State Federal

6 Characteristics of Government Purchasing No profit motive for efficiency Spending someone else’s money Heavily bureaucratic with laws and regulations Emphasis is on compliance more than creativity Overuse of competitive bidding Price reigns supreme over relationships Pressure from taxpayers and politicians

7 Characteristics of Government Purchasing Huge supplier base Service contracting (62%); commodity contracting (38%) Fish bowl environment vice confidentiality Public announcement of requirements Size (economic power)—big customer! Frequent supplier relations problems Use procurement policy to promote social policy Small businesses MBE HUB Zones

8 The “Fishbowl Environment” “These are tough times to be in contracting. As one career procurement professional recently ed to me: ‘Those of us involved in Katrina have been talking among ourselves that contracting officers are criticized if they award things quickly for wasting money (fleecing America) and if they try to step back and take a day or two to complete something, they are inflexible bureaucrats who aren't getting help to the public.’” --NCMA’s Contract Management Magazine (Nov 2005)

9 Key Players in Federal Government Procurement DOD NASA GSA F.A.R. GSAAdvantage.gov OMB OFPP DCAA DCMC GAO and the Comptroller General of the United States [

10 Two Key Laws in Federal Procurement TINA CICA Promotes competitive procedures Discourages sole sourcing Disadvantages Puts disproportionate emphasis on price Leads to longer lead times Doesn’t promote partnerships or rewards for past excellent performance

11 Miscellaneous comments Federal Procurement practices are very leading-edge and sophisticated Cost Analysis techniques CPM FPI/CPIF/Award Fee Earned Value Accounting Value Engineering TCO Trend is toward privatization of commercial activities OMB Circular A-76 Managed Competition in State Governments Organization for Federal Procurement professionals is NCMA and the certification is CFCM

12 Let’s move on