8 Ways That New State and Local Leaders Could Change Government Procurement (for Suppliers)

Jan 23, 2019
Bidsync Industry Blog

Anytime there is a change in state or local leadership, there is a chance that the government’s “business” priorities will change. That can lead to a change in procurement priorities, which subsequently drives the adoption of new procurement policies and buying strategies.

That is why the BidSync team is often asked after an election – or after the actual “change of command” such as the one we just experienced: “How will my bid opportunities be impacted under the new [state or local] administration?”

The short answer is that “it depends.” There are many factors that influence buyer side procurement actions and, therefore, suppliers’ opportunities and actions:

1. Programming

New programs will emerge that demand the acquisition of certain goods, supplies or construction. This will drive an increase in the volume of bid solicitations in certain categories. At the same time, some current programs may be downsized or cut altogether depending on the funding priorities of governors, mayors, CIOs and agency directors. Some existing contracts may not be renewed, while the volume and value of contracts in related goods and service categories may be reduced.

2. Funding

As just noted, budgets may be reorganized at the request of new leaders to ensure top-line agenda items receive the proper resources. If a governor is focused on introducing new digital government services, then you can expect several new opportunities to emerge for IT hardware, software and service providers. If education improvement is a priority, then you may see an increase in the number of high-dollar education technology, service or supply-related solicitations. If a government official is tough on crime, then you may see funding increase for a range of law enforcement tools and technologies to improve personnel capabilities. You may even see some services outsourced that were previously handled by government employees. It helps to monitor state and local spending reports for the markets you’re targeting, as well as budget changes. NASBO is a great resource.

3. Infrastructure

We touched on this topic recently, but infrastructure modernization is a hot button issue at all levels of government right now. It has been for a couple years now. Aging utilities, public housing demands, expanding communities and increased traffic are all driving investments in new infrastructure. However, the method by which government approaches such projects will vary. There’s been a lot of buzz about the benefits of private-public partnerships (P3s), and it may seem like more infrastructure projects are utilizing this model. However, there are plenty of projects sourced via more traditional bid structures. For example, a public works agency may choose to internally manage a pipeline replacement project, just as the Department of Transportation may drive all aspects of road expansion or resurfacing projects. And while the public sector is spending less money on highway construction, road supplies and maintenance (can you believe it?), this downward trend is not directly indicative of overall infrastructure-related spending trends. Project schedules, reduced material costs and other factors impact spend levels year-over-year, but rest assured there are many opportunities out there for those who can provide labor, materials and project management services.

Speaking of services, don’t forget the uptick in demand that will likely occur for professional services once these infrastructure projects are complete. Buildings will require cleaning services. Roadways and utility infrastructure will require routine inspection and maintenance. So pay attention to what is happening in adjacent markets that could influence demand for your particular business. (We track some of these trends at The LAB.)

4. Quality Assessments

Just like a change in leadership at a private sector business, a change in command within the public sector often leads to a performance reassessment of current contracts. Are current vendors delivering meeting expectations? Is there an opportunity to extract more value from certain buys? You could see new contract structures or term frameworks applied this year, and you’ll very likely see solicitation structures change as well. (As we just covered in the last blog, the government is looking at new ways to buy professional services to improve the quality and consistency of services. And we’ve noted before how proposal/bid evaluation factors are changing for everything from ink pens to vehicles as procurement leaders try to maximize value and eliminate waste.) 

5. Procurement Process Reviews

Government is always looking for a better way to buy. But new state or local leaders often take swift action to implement process changes. As Govtech.com reported: “One of California Gov. Gavin Newsom's first acts after inauguration was to sign an executive order creating a new path for state agencies to buy technology, pushing procurement in a more modern direction.”

Specifically, the four-page document that Gov. Newsom signed “promotes a new procurement tool that allows for solution development and collaboration on the front end of the process, instead of requiring payment before service delivery. The new option would create work groups of public-sector stakeholders, vendors and private-sector subject matter experts, convening to build proofs of concept in answer to problem statements released by state entities. It also inverts the traditional procurement system, which leans heavily on the state having a solution in mind when releasing a request for services.”

Clearly, this change is going to have implications on how private sector businesses engage with California agencies both before the actual bid and during the contract period. And California won’t be the only state to introduce new processes this year. More agencies are moving to agile procurement models, and others are increasing reliance on co-op and open contracts.

6. Sourcing Regulations

As you have probably noticed, each state and local government can define its own set of procurement rules and regulations to a certain extent. While states can use the Federal Acquisition Regulation (FAR) to guide purchasing processes, they don’t have to. Nor do local agencies have to follow state or federal buying guidelines. This grants a lot of flexibility in their procurement model and also leads to a lot of variance. While the Commonwealth of Massachusetts requires certain agencies to buy off statewide contracts, the cities, towns, and municipalities within the state’s geographic boundaries do not. They can source via the COMMBUYS tool, but they also have the choice to buy off other co-op contracts, solicit directly to vendors, etc. And, unlike the federal government in which every agency is legally obligated to follow the FAR, the procurement rules literally vary from state to state, city to city, county to county, and – in some cases – agency to agency.

7. Business Community Engagement Goals and “Disadvantaged Business” Definitions

Like the variation in procurement regulations, state and local agencies often set their own “business community” engagement goals and preferred purchasing program guidelines. These are often defined by the percentage of contracts awarded to green businesses (or for environmentally preferred products), local businesses or small businesses, or the number of points given to “disadvantaged” businesses such as women, minority, veteran, and service-disabled veteran-owned businesses. Some even extend preference points to LGBQT business owners or specific ethnicities. At the same, the definition of a “small business” may vary from one jurisdiction to the next, and the vendor certification programs are not consistent across all state and local governments. These factors all impact how solicitations are structured and contracts are awarded, so pay careful attention to each agency’s certification requirements and business practices.

8. Government Modernization

As we noted when the current Presidential Administration took office, it’s very common for agency missions to evolve under new leadership (due to those shifts in agenda and program priorities). Staffing structures and assignments will also evolve and, as of late, lead to new technology systems and tools to support operations. We have already seen a rise in spending for computer, networking and cell phone equipment, and we expect that will continue to rise as agencies move from legacy – or even paper-based – systems towards mobile work and digital workflows. 

THE TAKEAWAY

Whether you currently have a government contract or have plans to submit bids this year, you need to be aware of the political climate in each individual state or local jurisdiction where you want to do business. Understand agenda priorities and, therefore, the budget priorities of governors, CIOs, mayors and other agency leaders driving procurement actions. (Following NASPO, NASBO and government trade publications such as GovTech.com and StateScoop will help keep you in the know.)

At the same time, talk to customers. Talk to buyers at each target agency. Talk to our team. They will be well-tuned into the spending trends, bid opportunities and procurement process changes that will influence your government marketing and sales actions

*Don’t forget to sign up for daily bid notifications from BidSync. This is the easiest, fastest and most cost-effective way to find out when relevant new solicitations are posted by more than 90,000 federal, state and local government agencies in North America.