It's amazing how much we have been hearing about the amount of government spending, yet how governments and other public entities spend is never part of the conversation. It is in everyone's best interest to drive public procurement towards efficiency, measurable performance indicators, and a well-articulated system of accountability. After all, it is your tax dollars at work. The trend towards strategic procurement and professional development in public procurement is far behind the private sector. The ability to innovate and streamlines processes is crucial, yet almost nonexistent in most public procurement systems.
Without getting into politics, there are a number of internal challenges that public procurement systems inherently face including regulatory considerations, communication and political challenges, slow adoption of e-procurement, bureaucracy, and more. But at the heart of it, the cause of their inefficiency is the system's suppression of the sorts of decision processes and business relationships that produce results in the private sector. The government makes bad decisions both because it is badly informed and because its procurement officials are encouraged to disregard some of the important information or suggestions from bidders that they possess. The root cause of the problem is the system of full and open competition. I understand it is designed to thwart corruption, but it is designed poorly. A government or municipal RFP drives bidders towards a very specific set of regulations and prescribed standards, without allowing flexibility. Not to mention the number of irrelevant and frivolous RFP questions.
For example, say the Department of Energy is putting together a massive IT system for all of its field offices. The specifications may be designed to lead the bidding parties to offer a system that all of the vendors know is unusual and expensive. But none of the bidders have any incentive to suggest that its specifications should be reformulated. The whole process is very impersonal, and demotivating for bidders to do anything other than bid the lowest price they can on exactly what the government has specified. Governments will never be able to specify contracts that are sufficient to protect them against their own inexperience and lack of information concerning complex systems, especially IT and other tech infrastructure. They must rely on the vendors for information and continuing expertise. But, given the way government and public entities contract, they are not permitted to consult with vendors informally before contracting, in order to let the vendors tell them what is really needed, nor can they reward vendors for good performance by promising to continue doing business with them. Flexibility is a key component of the sourcing process that is lost in public purchasing.
With the upcoming election, no matter who wins, I hope that the new (or incumbent) president takes a look at the federal government's procurement practices and points them in the right direction.