Procurement and Purchasing Best Practices for State and Local Governments
State and local governments spend billions of dollars a year procuring goods and services. However, during the procurement process, they can hit major snags and challenges that hinder them from successfully purchasing or procuring anything.
To prevent wasting valuable time and resources, it is important to perform assessments of policies, procedures and processes to identify inefficiencies and opportunities for improvement so your organization can succeed in its pursuits.
Inefficiencies in government procurement and purchasing processes
The COVID-19 pandemic acted as a catalyst for many state and local governments, demonstrating that improvements were needed when it came to their procurement and purchasing processes. Thanks to federal relief programs like the CARES Act, many organizations were able to receive the funds for economic assistance. But these programs had time constraints, meaning the money had to be spent within a relatively short time frame. Many state and local governments were interested in using the funds to purchase goods, such as personal protective equipment, and to contract with subrecipients to provide services to populations in need, such as the homeless.
However, the procurement and contracting processes took time — oftentimes, more time than the state and local governments had with the constraints set by the relief programs. This meant the funds could be wasted if the contracts were not pushed through in a timely manner.
Remote work, which was not prevalent before the pandemic, revealed issues for many state and local governments related to their lack of automated processes. For example, some organizations still collected “wet” signatures on resolutions and contracts instead of using digital programs like DocuSign. They only learned of inefficiencies like these when everyone was working from home, leaving them to wonder how to fix similar and additional issues plaguing them.
Common issues facing procurement and purchasing
Say your organization has an IT department that has a workflow requiring its staff to manage requests in a certain way. Instead of “touching” the request just once and approving it, the purchasing employee must handle the same request three times. This is clearly inefficient, but oftentimes, state and local governments don’t realize the snags their departments are facing throughout their processes.
There are several reasons why this could be. For example, you could have a team that is stretched too thin, with several people doing multiple jobs — there are too many things to process and not enough resources, leading to things slipping through the cracks. Maybe the organization is facing a lot of turnover or new management, and without clearly outlined processes, no one is sure how to spread the workload effectively. Bottlenecks can arise, hindering progress further. Without documented procedures, roles, and responsibilities, your team won’t know who is responsible for what. And if your organization is decentralized — this can lead to even more confusion, slowing down procurement and contracting processes even further.
Details and communication are essential
If one of your departments requires a red truck and puts in a request without any detail, your purchasing department, could take a guess and buy a red truck – which may or may not meet the needs of the department. There are many kinds of red trucks, and by the department not specifying what red truck they want, time is wasted, slowing down whatever project the red truck is needed for. Does the department need to haul something? Does it need four-wheel drive? What will it be used for? Purchasing departments know how to purchase goods and services, but rely on the other departments to provide specific details on what to purchase. Purchasing needs details -- and back-and-forth communication is inefficient. The organization needs to set clear responsibilities to determine the scope so purchasing can do its job, making the process far more seamless.
Plainly, state and local governments face major hurdles when trying to get a contract out the door — it can take some governments six to eight months. With many steps, including bids, evaluations, approvals, and negotiations, the process can even stretch into the next fiscal year by the time it’s finally executed. The length of time is tedious — and unnecessary. Is there a way to make the length of time shorter, or make the process more efficient?
Steps to address payment and procurement inefficiencies
A third-party assessment of your procurement and contracting processes will tell you where the inefficiencies lie — and provide recommendations on how to fix them. All you need to know is the process isn’t working, and we can do the rest.
Here is a quick look at some of the steps of an assessment:
- Review current processes and practices
- Identify bottlenecks and root causes of inefficiencies
- Break down resource constraints with processing requests for bids or proposal
- Review necessary documentation and procedures
- Evaluate for best practices and opportunities for improvements
- Develop detailed methods for performance improvement
- Outline how to more efficiently use the resources you already have, information technology and staff
- Develop training and communicate the issues discovered
- Educate on how to more efficiently utilize current technology
State and local governments have distinct responsibilities to their constituents. In order to meet their needs effectively, it is crucial that they identify oversights and fulfill any control duties as efficiently as possible.
How MGO can help
At the end of the day, it can require a significant amount of time, resources, and effort for state and local governments to uncover issues and implement best practices. MGO delves deep, utilizing our extensive resources and professionals to go in, identify the issues, and recommend how to fix it — so your procurement and contracting processes flow more seamlessly, no matter your resources, staffing numbers, and size.
MGO’s dedicated State and Local Government team functions as an additional level of control to improve these important processes with comprehensive innovative strategies and solutions so you can focus on minimizing risk, optimizing performance, and exceeding the expectations of your boards, stakeholders, and communities. Contact us to learn more.