Losing Vendor Litigation (Part 2): Vendor Side Origins?

Posted on August 8, 2011

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There is one salient rule for vendors considering the pursuit of government contracts, just one rule . . . people buy from whom they know, like and trust!

from April 2010 Washington Keynote address

I remember when I gave the above referenced keynote, I was just coming to the end of a special 7-Part Seven Steps to Success Series with Washington-based government business expert and author Judy Bradt.

Bradt, who over a career that has spanned 20 plus years, has helped more than 6,000 suppliers win in excess of $300 million in government contracts.  The series was of course invaluable for vendors.  But it also offered extremely useful insights for those from the buying side of the government acquisition fence in that it perhaps for the first time from a single source delivered the complete picture of the public sector purchasing process.  A kind of showing of the cards so to speak that helped to finally address the 300 pound gorilla in the room.

The gorilla being the long recognized but never spoken reality that the vast majority of government contracts are decided long before the RFP is actually issued.

Now one might reasonably assume, as has been done with the recently re-negotiated wind and solar energy deal between the Province of Ontario and Samsung that would make Ontario home to North America’s first green energy manufacturing sector, that under the table or bottom of the deck wheeling and dealing are an everyday part of the public sector acquisition process.  After all, the conspicuous re-negotiation led to a drop of $327 million or 75% of the total contract that was originally awarded to the Korean manufacturer in 2010.  As critics have been so quick to point out, either the Province is a terrible negotiator or, there was something amiss with the original bid.

However, and while malfeasance may occasionally be a factor worth considering and investigating, based on my extensive experience in the government arena I can say with a good degree of certainty that most bid problems and resulting vendor complaints find their origins in the misunderstanding of what transparency actually means.

Specifically, transparency is not the holding fast to the illusion of a level playing field, but is achieved through a clear understanding of the layout of the playing field itself.  Or as Bradt would say repeatedly throughout the 7-Part Series; The process for winning government contracts is truly based on the ability of a supplier to legitimately and transparently win preference with government buyers.

Unfortunately this subtle but critical difference relative to transparency eludes the majority of vendors who still believe that the race begins when the RFP is posted for all the world to see.  The exact opposite is true.

The vast majority of suppliers who successfully win contracts on a consistent basis have laid the foundations for their victor long before the actual RFP is issued.  The Samsung deal is a perfect example.  I mean do you honestly think that Samsung simply responded to the government of Ontaio’s bid and that was that?  Nothing could be further from the truth.

In reality, Samsung representatives probably started working on winning this contract well before 2010 when they sought to form relationships with key government officials in an effort to understand their unique view of the challenges faced by the Province in terms of going green.  Especially since Ontario has traditionally relied upon fossil fuels such as coal for many, many years.  This is the way that business is done per the know, like and trust edict.

From a personal standpoint I can remember winning a multi-million dollar contract with Deloitte, Haskins + Sells (now Deloitte Touche) even though I was a new supplier, who came in at the 11th hour and was facing much larger incumbent vendors . . . and did it by way of a cold call where I did not have a single inside person or champion relationship when I started.

The contract, through which Deloitte sought to outsource their IT acquisition and support services to a third party, was at the time one of the industry’s plum contracts that had vendors falling over themselves to win it.

In fact, my company was so far off the grid that when the contract had been awarded to me the Toshiba representative (Deloitte’s used a lot of Toshiba notebooks in those days) who treated me to a congratulatory lunch said that he had to scramble just to find my contact information when news of the win was publicized.

I can still remember his asking how did you do it?  You were not even in the game 3 weeks prior to the contract award?

One day I will provide a complete end-to-end run down in a future post however for today’s article I will provide you with the Coles Notes version.

When I had heard about the pending contract award at Deloitte’s, I found out who the point person was in terms of overseeing the vendor review process and called him.  When I spoke with him I indicated that even though he had probably reviewed 100 vendors by that time, I had a few ideas that were probably unique from anything that he had already seen and that I wanted to get together to ask him a few questions.

Perhaps I was in the right place at the right time . . . maybe the 100 same-old, same-old ideas weren’t in line with what he and the team of Directors with whom he was working had envisioned as part of a sound outsourcing strategy . . . maybe I just piqued his curiosity.  Whatever the reason, he agreed to see me.

When we met, rather than pitching about our attributes as a company I simply started to ask him questions about what he had seen to that point, what he liked, what he didn’t like and what ultimately he wanted to accomplish through the outsourcing strategy.  About 2 1/2 hours later (which actually felt like only a matter of 10 to 20 minutes) I left his office with a follow-up appointment scheduled for the next day.

That evening I put together a presentation based on the copious notes I had taken and as scheduled showed up at his office at 9:30 AM the following morning.  Again, and in an effort to avoid telling him what we were going to do, I began to lay out the strategy slide by slide asking him for his input each step of the way in the context of how he would do a presentation if he were me and was sitting on my side of the table.

It was a great brainstorming session filled with energy, insights and the occasional chuckle.  About three quarters of the way into the second meeting, my Deloitte collaborator paused, looked at me and smiled.  I asked him why he was smiling and he said, because you have been the only vendor who has taken the time to provide me with the resources of expertise to create a strategy that is in reality mine.  It was at that point that I was invited to present the Deloitte IT outsourcing program to the Directors the following week.  And that is exactly what I did.

Over lunch, the Toshiba representative told me that he was informed that I had won the contract because I was passionate about what I was saying, completely informed and understanding of the challenges Deloitte was facing and therefore they believed that I could deliver the results.

The truth is that had I not in relatively short order formed a strong bond with the Deloitte point man, I would have never received the information that the other vendors had overlooked in their haste to tell the client why they were the right choice.  Through this exercise I formed a collaborative relationship that led to gaining the buyer preference to which Bradt referred.

So here is the question, was there any aspect of the bid/selection process that was questionable?  Any under the table here are a few bucks to take your family to Cuba for a winter vacation exchanges?  No.

Through the years I have used this same model to pursue and win several large, multi-million dollar contracts including one through a third party service provider to manage the procurement process for the Department of National Defence.

As a vendor, you cannot simply equate transparency or the concept of a level playing field with an accessibility to bid notifications.  You have to know your strengths and then invest the prerequisite time in building the know, like and trust relationships that provide you and your firm with an unassailable competitive advantage.

If more vendors followed this track versus merely expending incalculable resources responding to RFPs you would find happier vendors (and buyers), and fewer contract award challenges.

In part 3 of my Losing Vendor Litigation series, I will be discussing when a legitimate buyer preference crosses the line into apathy and convenience to the detriment of the buyer and ultimately all parties including, the triggers for what can develop into a major headline grabbing crisis.

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