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Blog | 12.02.20

How COVID-19 Procurement Challenges are Changing Sourcing Strategies

As anyone responsible for marketing or sales knows, it’s best practice to evaluate and evolve your go-to-market strategy from time to time. Your customers’ needs are constantly changing, so you must ensure that the messages you’re putting out into the marketplace – and the means by which you’re communicating them – are still relevant. This is true even when pursuing government contracts.

But the key to selling to the public sector lies in your understanding of the procurement process. Goods, services, construction and systems aren’t sourced in the same manner as the private sector. There are more policies and regulations informing processes than what you might find if you were selling to another business or consumer as well as different priorities driving purchasing decisions.

For example, since the start of the COVID-19 pandemic, we’ve seen many state and local agencies…

  • Become more reliant on co-op contracts and similar purchasing vehicles, to augment their traditional vendor pool and acquire specialized goods.
  • Look to the open market, beyond pre-vetted vendors, to find what they needed. With multiple agencies tapping the same vendors, it’s not uncommon for demand to outweigh supply. Even now, many products are still being ordered in high volumes, including those that were backordered or only available in limited supplies for months. And service providers can only be on-site at so many places in a day. So, agencies are increasingly searching online for alternative sources and calling referred companies that may not have been on their radar previously.
  • Scrutinize sources more closely, whether new or known. After getting burned a few times in the early days of the pandemic, agencies have become more diligent about verifying vendor’s performance records, product or service quality and fulfillment capabilities. They are also keeping a close eye on vendor compliance with labor laws; insurance, bonding, licensing and certification requirements; as well as compliance with security, safety and supply chain mandates. They need to mitigate any risk of fraud, delay or loss.
  • Attempt to buy local first. While not novel to this pandemic, it certainly became more of a priority as governments worked to stimulate economies, ensure on-time delivery of goods and services and build stronger relationships with local businesses for their mutual benefit.
  • Increase contract awards to disadvantaged business entities (DBEs) including small businesses (SMB) and women, minority and veteran-owned businesses. Again, this isn’t a new practice. But we have seen the preference for DBEs grow in recent months as governments (and communities) work to give them an advantage in this uphill battle. Some state and local agencies are even setting goals for DBE contract awards to help route more revenue to DBEs to help keep their doors open. Those who have been able to pivot to meet government agencies’ vendor requirements may see more bid opportunities than usual present themselves in the coming months.
  • Issue more emergency or short-turn solicitations. Though any crisis can spur emergency bids for essential supplies to aid in a recovery, COVID-19 has prompted emergency solicitations in non-traditional categories, such as technology. Though we may not see the urgency of the first wave rematerialize in the coming months, we are still noticing a number of short-turn bid notices posted. The world is still very much in a state of flux, and nothing has truly normalized yet. Agencies are still sourcing in real-time for many goods and services, so it’s best to keep your eyes peeled every day for new bids. Also, be sure to communicate your company’s current capacity and flexibility to agencies that you know may need your products or services. That way, they know who to call if they need something fast. (You may even be able to get your vendor registration and vetting complete now to help expedite the sales process down the line.)
  • Adjust p-card purchase thresholds, to make it easier to buy in online marketplaces or secure critical goods as supplies dwindled. This is important to note because procurement teams may be able to make a direct buy from you versus having to go through the more tedious solicitation, evaluation and contract award process.
  • Maintain their telework stance. Though some government buildings are re-opening for in-person services, many procurement teams are still working remotely. That means they may be relying more on virtual networking events to meet new vendors and catch up with those who have existing contracts. Pay attention to agencies’ online communications: newsletters, social media, website updates and more. Take advantage of opportunities to connect with buyers, but don’t just focus on selling. Use this time to understand their current challenges and needs, and then be strategic in your recommended solution. Make sure they can see that you want to partner with them, not just sell to them.

Of course, there are legislative changes happening at the federal, state and local levels that could impact your eligibility to do business with the government, so make sure you’re tuned into those. And – as always – do your market research. Once you find bid opportunities that align with your capabilities and goals, reach out to the contracting officer to ensure you fully understand their expectations. Ask questions if you’re unclear about how contracts are being awarded or managed right now, and be sure to inquire about how supply chain issues, closures and other similar disruptions could impact their expectations and your obligations. The more you know, the better poised you’ll be for success in the government sector in these uncertain times.