As part of our Live Event coverage of the 3rd Annual Business of Government Summit in Washington, D.C. on the 27th of April, was an in-depth 90-Minute Special Roundtable discussion which posed the question “What is Transparency in Government“.
Joining me on the live broadcast from the floor of the Ronald Reagan Building and International Trade Center was Karen Evans, the former CIO for the United States Government, Tim Cummins who is the CEO of the International Association of Contract & Commercial Management (IACCM), Colin Cram, a 30 year public sector veteran and author of the seminal Towards Tesco – Improving Public Sector Procurement paper, as well as of course Judy Bradt, principle of Summit Insights.
As the lead-up to the release of a white paper that is being written about the observations and revelations from the Washington Roundtable discussion, this is the second in a series of excerpts that will be posted here on the Procurement Insights Blog, as well as in the Official Event Blog Essential Connections.
Providing both an overview of the key highlights from the April 27th broadcast, as well as a corresponding commentary, the first installment focused on defining transparency, as well as its impact on the public sector procurement or bid process.
In today’s segment we will focus on the impact that transparency has relative to perceptions, relationships and supplier value.
“The process for winning government contracts is truly based on the ability of a supplier to legitimately and transparently win preference with government buyers.”
Judy Bradt, Seven Steps to Success: Jump Start Government Contracts (Blog Talk Radio)
I have always contended that at the end of the day, regardless of industry or sector, people ultimately buy from whom they “know, like and trust.”
In fact with greater expenditures and the resulting increase in risk, this axiom becomes even more critical. The analogy I often use is that I do not have to know the person behind the counter (or even like them) at my local corner store, as all I really care about is whether or not the milk I purchase is fresh.
However, when I buy a car or a house, or for that matter choose a doctor, the focus naturally shifts to one of trust and comfort. In short, if I do not connect with the individual or individuals through whom I am going to make a major purchase I am not likely to deal with them.
As we pick up where we left off in the previous post, this concept or principle leads into Judy Bradt’s statement that “the rules provide ways” in which you can still do business with “people you like – especially in the U.S.”
Specifically, and in line with her analogy of a runner showing up for the race at the starting line without having trained, which is what the majority of suppliers do when they consider the release of the RFP to be the first step in doing business with the government, Bradt repeatedly emphasized the importance of building relationships prior to an RFP being issued.
By becoming involved at the early stages of the government procurement process, such as responding to a draft RFP or Requests For Information (RFI), the Washington-based expert indicated that vendors can “legitimately shape the perception of need,” including the manner in which the “evaluation factors” are written and ultimately published.
Karen Evans’ assertion in the previous installment of this series that the lack of clarity in terms of requirements and the expressed or intended deliverables associated with many RFPs creates countless challenges, perhaps underlines the need for improved communication and collaboration during these early stages of a government acquisition.
Evans’ observation that the degree of this disconnect has become even more evident given her current vantage point from the vendor side of the transaction fence, is therefore noteworthy.
This would of course suggest that through stronger “out of the gate relationships,” when RFPs are first being structured, stakeholders would be better positioned to address and even avoid the communication breakdowns that lead to non-compliance or a vendor’s inability to fulfill contractual obligations down the road.
Certainly U.K.-based Colin Cram believes that the know, like and trust axiom has merit given his belief that relationships are the key in preventing what he referred to as the “transparency of process” impeding the buyers ability to achieve a “best value outcome.”
In essence, and this is my take, pursuing the illusion of transparency at all costs represents what Cram had previously indicated was an appearance over value proposition.
Cram added that this overemphasis on transparency often times results in the government awarding contracts to “suppliers who have been justified by transparency procedures” versus “dealing with suppliers who can offer best value for the money.”
The 30 year public sector veteran and author of the breakout paper Towards Tesco – improving public sector procurement, added that he has “many, many examples” of what he referred to as “boneheaded, procedural procurement that doesn’t deliver a best value result for anyone, least of all the taxpayer.”
Tim Cummins added that while it is “easier for the private sector to engage best value suppliers, there are “common problems that run through both the private and public sectors.”
Even with this apparent ease to engage best value suppliers, the IACCM CEO stressed that whether private or public, a key overall problem that transcends all industries and sectors is what he referred to as “the evolution of the current procurement practice,” which has created “an adversarial environment.”
Despite the reference to a universal or shared issue, Cummins once again turned his focus to the public sector which through the dominance of its size has taken a “leadership” role in terms of “creating a procedural-based, buyer adversarial process” which is further compounded by “new unilateral terms and conditions such as liquidated damages and termination for convenience.”
In the end concluded Cummins, “all of these terms and conditions lead to premium pricing and a complete loss of transparency.” The reason for the loss of transparency, he continued is that “far too often, public sector procurement is about a blame game.”
The problems with the resulting aversion to risk in the public sector, or what I call the “belt with suspenders mindset” is that it creates according to Cummins, “a highly lopsided risk allocation” born mostly by the supplier.
Not only does this lead to a closed or self-protecting environment in which true transparency is obfuscated by a need to cover ones bases, it also drives further erosion of already thinning supply bases.
Next White Paper Excerpt: Transparency and the Talent Gap
NOTE: The following post came from the new Essential Connections Blog. For complete summit information including additional articles, visit the Essential Connections Blog
About the Summit:
The PI Window on Business took its show on the road on April 27th and 28th thanks to sponsor Elcom and the tremendous work of the 2010 Business of Government Summit’s organizer, Shared Services and Outsourcing Network (SSON).
It was a first rate venue that saw us broadcast “live” 5 incredibly informative sessions centered on “Building a Transparent, Collaborative and High-Performance Government Capable of Addressing the Challenges of the 21st Century.”The attendees of mostly senior officials and executives from the public sector world were exposed to an incredible array of thought leaders, whose shared insights and experiences provided much needed (and welcomed) perspectives on both the challenges and potential strategies for effective government practices in the 21st century.