The Government is Searching for a Better Way to Buy Professional Services

Jan 11, 2019
Bidsync Industry Blog

Buying and selling professional services can be challenging in the public sector. The many variables and uncertainties that exist in the rendering of certain services can make it difficult to define an all-encompassing scope of work on day one. Evaluating the efficacy of one vendor’s service delivery method versus another can be subjective. And the sometimes-limiting pricing structures of Lowest Price Technically Acceptable (LPTA) service contracts leave buyers and bidders with a mutual dilemma: How to effectively source, sell and ultimately deliver the quality services customers expect within a government-accepted service contract structure.

For example, many government contractors awarded professional services contracts are akin to staffing agencies. Whether they were tapped to provide janitorial, medical, education, IT or administrative services, these contractors’ first obligation is to source the labor needed to deliver the contracted services. The challenge that many contractors – and therefore, government agencies – face is in the recruitment and retention of qualified candidates to perform such services. This is often due to one of two reasons:

  1. There is a shortage of skilled candidates due to the job site’s location in a smaller, rural or remote market.
  2. Compensation for the position is below market average for the desired candidate qualifications.

If a contractor is unable to find skilled workers to fill advertised positions, they risk performance failure ratings and the government’s failure to deliver promised services is scrutinized. That is because customers and constituents are the ones that suffer: Medical staffing shortages limit healthcare access. Teacher shortages can lead to overcrowded classrooms. Even churn in cleaning service employees can lead to a lapse in service or quality degradation if a leaner team is forced to service more sites on the same schedule. The examples are endless. 

As a result, many government agencies are considering creative new evaluation factors to mitigate service delivery failures. They recognize that using Lowest Price Technically Acceptable (LPTA) criteria to award and administer professional service contracts effectively puts a cap on salaries for those that will be performing contracted services. A contractor can only pay its people what the government compensates without hurting its own bottom line. But identifying a way to compensate contractors to aid with labor incentives is not always easy. It’s not as simple as adjusting salary caps in the contract terms, as the potential of labor pool gaps or employee churn is not always evident at the time of solicitation or contract award. Many bidders claim that they will be able to deliver services without issue in their proposal. And no one can predict human behavior – such as the number of applicants, people’s intention to resign or retire, etc. – which is always an uncertainty in the service industry. Therefore, government buyers and service providers must work together to define a better solicitation, evaluation and administration method, with contingency options built in. 

How can you as a professional services provider step up to help (the government and yourself)?

1. Speak Up If There Are Concerns With Solicitation Requirements

Don’t wait until after the contract is awarded to call out contract terms that could hinder service delivery capabilities (such as salary caps). Let the contracting officer know if there are tools that the government will need to provide to support successful service fulfillment, especially if they are not indicated in the solicitation. Offer suggestions on other evaluation factors that can be used to ensure the government is selecting the right service provider. How can the government objectively compare vendors when service models may vary greatly? Are there unrealistic service expectations outlined that should be reconsidered? Are there better benchmarks that could be used to measure past vendor performance or track future performance of the awarded contract? The government would much rather pull down and amend a solicitation early on than find out after the fact that the solicitation was insufficiently written to source a quality service provider. 

2. Don’t Wait Until A Solicitation Is Published To Share Best Practices

You’ll find that more government agencies are now engaging industry experts early and often for recommendations on how to solicit and structure services contracts. They want to ensure successful outcomes for all parties. Requests for Information (RFIs) are a great opportunity to influence government contracting actions, possibly to your benefit. If you can show them which evaluation criteria will best determine a company's qualifications – and those evaluation criteria just happen to work in your favor – then it's a win-win. However, casual conversations during industry days, vendor networking events or even routine, relationship-building meetings can be mutually beneficial if you’re able to share lessons learned and offer recommendations on how future solicitations can be improved. Many public sector buyers rely heavily on private sector subject matter experts to inform their solicitation and evaluation structures. Their end goal is to secure the highest quality services for the best value. They are always open to suggestions on how to improve service performance. What tools can the government offer to help contractors incentivize qualified professionals for traditionally hard-to-fill positions? Locality pay? Something else? No idea will be discounted.

3. When You Do Bid, Make Sure Your Proposal Details How You Will Fulfill Your Contractual Obligations

What problem can you solve? How will you mitigate risks common in the professional services sector, such as churn? What steps will you take to ensure consistent service delivery? How can you guarantee that your recruitment and retention process will be effective? Of course, completing a thorough pre-bid assessment of your capabilities and resources will help you identify and address potential gaps prior to bidding so that you don’t have any issues meeting customer expectations if you’re awarded the contract. 

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