Government procurement contests (Part 2): When innovative ideas collide . . .

Posted on August 31, 2011

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Gèrard Quenneville, an Aylmer engineer who is acting as a liaison between the company and the city on the file, says, “The proposal deserved to be studied in depth.”  Mr. Quenville notes Alpine Energy had been working for four years on the proposal.  Both Mr. Quenville and Mr. Carrière met with Mayor Marc Bureau the week of August 15 and are waiting for an explanation.

from Friday, August 26th, 2011 West Quebec Post article Regional incineration project still open for tenders by Julie Murray

My initial thoughts when I first read the above referenced article regarding what appears to be a failed proposal by Denver, Colorado-based Alpine Energy Group hearkened back to the days of Henry Ford and the old Model T.  Specifically, Ford’s assertion that customers could have any color they wanted relative to their Model T cars, as long as it was black.

The parallel (and simultaneous contradiction) from the standpoint of the spirit of the procurement contest concept is that Gatineau has set or confined its innovative vision to anaerobic digestion, and as a result does not recognize Alpine Group’s technology which is based on its innovative “waste-away” technology that according to the article transforms residual garbage into odorless granules that are then used as fuel.

Rather than delve into the merits of one technology versus the other – which itself warrants a dedicated post, I will focus on the Gatineau story from the procurement contests standpoint.

As those who have already read yesterday’s opening post in the series (Are procurement contests just another way for government to pass the innovation buck to a preferred outside vendor?), the premise as well as the merits of the procurement contest approach were described as follows:

The basic idea of a procurement contest — sometimes called a prize or challenge — is to set out a performance requirement for a capability that needs development work and offer a prize, usually money, for the first or best entity to produce a product or capability meeting the requirement.

Within this context one has to ask how the City of Gatineau concluded that anaerobic digestion – sounds like an ailment from which my aging uncle suffered, was identified as the preferred technology versus the solution being offered by Alpine, which on the surface seems to be quite logical and effective?

It is at this point that we encounter one of the contentious issues of the current debate in that procurement contests might, as Alan Chvotkin cautioned, provide buyers with the opportunity to inappropriately ignore or sidestep what he called the basic tenets of federal procurement.  In the case of Gatineau’s discounting of  the Alpine technology, is Chvotkin position one that would suggest that the city could have an unwarranted predisposition towards the solution of a particular vendor?  After all, and when you take into account my May 2nd, 2011 post titled Government purchasing expert confirms that 90% of RFP winners decided before RFP is actually issued . . . with an important caveat!, in which experts both within and external to the government had suggested that 90% of all RFP contract winners are decided before the RFP is actually issued, it is not a stretch to perhaps assume that the preference for anaerobic digestion may be more relationship driven than the City might care to admit.

On the other side of the acquisition fence, a common criticism that has been leveled towards governments is that they have on far too many occasions abdicated the responsibility for having the initiative to pursue an internally-driven, original vision, choosing instead to acquiesce to a supplier’s agenda as was the case with the Government of Canada and A.T. Kearney controversy back in the summer of 2007.

At that time, Kearney had been retained for a set amount to assess the government’s purchasing technology.  Besides running over budget into the millions of dollars, to no ones eventual surprise the solution they recommended was their own reverse auction platform.

Obviously by making the decision to go with anaerobic digestion, Gatineau appears to have taken the innovation bull by the horns in a self-determining effort to drive a best value decision.

This then brings us back full circle to Alpine.  If in fact the City was committed to a solution with which the Colorado-based firm’s offering did not align, why would Alpine spend four years expending significant resources to try a convince the municipality that the company’s waste-away technology was the way to go.  At the end of the day, their efforts have gone down the proverbial drain in that having been rejected, they are no longer eligible to submit a bid.

anaerobic digestion

I will be following this particular story at great length and provide updates as they become available.

Suffice to say, as much as things may appear to change, they often do remain very much the same.  In terms of government purchasing, the answers are never simple and the seeming disconnect bordering on acrimony between buyers and suppliers is the one constant that is almost as certain as the sun rising in the east and setting in the west.

What do you think?  Is the Gatineau case a positive or negative example of if not in actuality at least in principle, procurement contests in the public sector?

Next Up – Government procurement contests (Part 3): A question of (IP) ownership

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