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Blog | 01.25.21

Procurement and Politics: How Newly-Elected Officials Could Influence Government Contracting

Anytime there is a change in government leadership at any level, there is a chance that agencies’ “business” priorities will change. That can lead to a change in procurement priorities, which subsequently drives the adoption of new procurement policies and buying strategies.

That is why the Periscope Supplier to Government (S2G) team is often asked after an election – or after the actual “change of command” such as the one we just experienced: “How will my bid opportunities be impacted under the new administration?”

The short answer is that “it depends.” There are many factors that influence federal, state and local agencies’ procurement actions and, therefore, suppliers’ opportunities and actions:

  • Programming: New programs will emerge that demand the acquisition of certain goods, supplies or construction. This will drive an increase in the volume of bid solicitations in certain categories. At the same time, some current programs may be downsized or cut altogether depending on the funding priorities of the president, governors, mayors, CIOs and agency directors. In the past, it was not unusual for some existing contracts to expire without renewal and the volume and value of contracts in certain goods and service categories to be reduced. However, given the state of the nation, it is very likely we’ll actually see programmatic procurement activity pick up as federal agencies aim to speed up economic recovery, reinvigorate climate change initiatives and improve the number and quality of citizen services. Even though state and local leadership may not be changing, you’ll likely see officials follow the lead of the federal government, especially as new executive orders, legislation and mandates are enacted.
  • Funding: Of course, budgets may have to be reorganized at all levels of government to ensure leaders’ top-line agenda items receive the proper resources. With climate change high on President Biden’s priority list, it is possible that funding will increase – or be prioritized –at the state and local levels for the utilization of more sustainable goods and services. Of course, we should expect to see a continued and concerted effort to improve education at all levels given the impact of the virus on learning models. So, don’t be surprised to see an increase in the number of high-dollar education technology, service or supply-related solicitations in the coming months. No matter what you offer, it helps to monitor state and local spending reports for the markets you’re targeting, as well as budget changes. NASBO is a great resource. Just remember that, because we are still in the middle of a pandemic, budgets are going to remain tight. Public sector entities have to stretch every dollar as far as possible, so expect there to be a lot of pricing competition – and even some creative pricing models.
  • Quality Assessments: Just like a change in leadership at a private sector business, a change in command within the public sector often leads to a performance reassessment of current contracts. Are vendors meeting expectations? Is there an opportunity to extract more value from the money being spent? Given the rise in fraud that occurred during the pandemic, there will likely be an increase in audits. In fact, some federal procurement experts believe that agencies will start paying closer attention to vendors’ non-government business activity and increase accountability for non-compliance with contract terms as well as government rules. Again, state and local entities operate independently of the federal government for the most part. But they are going to give an equally critical eye to contract performance. The public sector is accountable to taxpayers, and there is a zero-tolerance policy for fraud, bribery and waste.
  • Procurement Process Reviews: Governments are always looking for a better way to buy, but new agency leaders often take swift action to implement process changes. As Govtech.com reported: “One of California Gov. Gavin Newsom's first acts after inauguration [in 2019] was to sign an executive order creating a new path for state agencies to buy technology, pushing procurement in a more modern direction.”
  • Sourcing Regulations: While states can use the Federal Acquisition Regulation (FAR) to guide purchasing processes, they don’t have to. Nor do local agencies have to follow state or federal buying guidelines. This grants a lot of flexibility in their procurement model and also leads to a lot of variance. While the Commonwealth of Massachusetts requires certain agencies to buy off statewide contracts, the cities, towns, and municipalities within the state’s geographic boundaries do not. They can source via the COMMBUYS tool, but they also have the choice to buy off other co-op contracts, solicit directly to vendors, etc. And, unlike the federal government in which every agency is legally obligated to follow the FAR, the procurement rules literally vary from state to state, city to city, county to county, and – in some cases – agency to agency. Now, that doesn’t mean that state and local entities won’t adopt the policy or procedural frameworks leveraged for federal procurements. Best practices are increasingly shared across all levels of government, as are contract vehicles. Plus, state and local entities are very much influenced by what happens at the federal level, especially if they are receiving federal funding, buying cooperatively or using a federal source to acquire what they need (such as a GSA contract). Again, do your research to understand current rules and regulations for each agency or district on your target list.
  • Business Community Engagement Goals and “Disadvantaged Business” Definitions: Like the variation in procurement regulations, state and local agencies often set their own “business community” engagement goals and preferred purchasing program guidelines. These are often defined by the percentage of contracts awarded to green businesses (or for environmentally preferred products), local businesses or small businesses, or the number of points given to “disadvantaged” businesses such as women, minority, veteran, and service-disabled veteran-owned businesses. Some even extend preference points to LGBQT business owners or specific ethnicities. At the same, the definition of a “small business” may vary from one jurisdiction to the next, and the vendor certification programs are not consistent across all state and local governments. These factors all impact how solicitations are structured and contracts are awarded, so pay careful attention to each agency’s certification requirements and business practices.
  • Government Modernization: It’s very common for agency missions to evolve under new leadership due to shifts in agenda and program priorities. Staffing structures and assignments will also evolve and, as of late, lead to new technology systems and tools to support operations. We have already seen a rise in technology spending over the past few years as a result of previously-planned system upgrades and the pandemic-prompted acceleration. And we expect that this trend will continue to rise as agencies move from legacy – or even paper-based – systems towards mobile work, digital workflows and online service delivery. Of course, funding is going to play a big part in the pace of modernization. So, it will be important to keep tabs on budget plans, changing revenue streams and even federal aid distribution as that will ultimately determine when agencies get the green light to start new projects or enter a new phase.

Specifically, the four-page document that Gov. Newsom signed “promotes a new procurement tool that allows for solution development and collaboration on the front end of the process, instead of requiring payment before service delivery. The new option would create work groups of public-sector stakeholders, vendors and private-sector subject matter experts, convening to build proofs of concept in answer to problem statements released by state entities. It also inverts the traditional procurement system, which leans heavily on the state having a solution in mind when releasing a request for services.” 

Clearly, this change is had implications on how private sector businesses now engage with California agencies both before the actual bid and during the contract period. And California wasn’t the only state to introduce new processes after the mid-term election. More agencies have since moved to agile procurement models, and others are increasing reliance on co-op and open contracts. And though the pandemic drove many procurement teams to expand their sourcing strategies quite extensively, many expect additional contract structures or term frameworks to be leveraged in the coming months as federal procurement policies change and capture the attention of state and local buyers.

 

 In Other Words:

If you want to do business with state or local entities, you really need to be aware of the current climate in each individual jurisdiction. Understand agenda priorities and, therefore, the budget priorities of governors, CIOs, mayors and other agency leaders driving procurement actions. (Following NASPO, NASBO and government trade publications such as GovTech.com and StateScoop will help you stay up to date.)

At the same time, talk to customers. Talk to buyers at each target agency. Talk to our team. They will be well-tuned into the spending trends, bid opportunities and procurement process changes that will influence your government marketing and sales actions. 

*Don’t forget to sign up for daily bid notifications from Periscope S2G. This is the easiest, fastest and most cost-effective way to find out when relevant new solicitations are posted by more than 100,000 federal, state and local government agencies in North America.