There’s a Growing Trend Toward Statewide Procurement and It Could Impact Suppliers
In recent years, we’ve seen states like Massachusetts, Nevada, Oregon and, most recently, Arkansas make big moves to transform their procurement functions. They each are striving to:
- Give local governments more buying power
- Increase bid participation from small and local businesses
- Save state and local agencies more money by simultaneously increasing procurement function efficiencies and reduce waste in spending.
Though, each is taking a slightly different approach to their modernization efforts, there are five key commonalities that you should take note of:
- They are embracing eProcurement. Vendor registrations, certification verifications and solicitations are all being managed online.
- They are increasingly shopping first (and sometimes exclusively) from online marketplaces built exclusively for the public sector. They want to make it easier to shop contracts and, when needed, the open market.
- They are taking measured steps to improve supplier enablement and diversity. They want to simplify the bidding process for companies to increase competition. They also want to increase spend within their state. (Though, if they can’t find the goods and services they need locally, they will look to other states’ contracts and the marketplace just mentioned to locate new vendors.)
- They are laser-focused on extracting more money from every dollar spent, eliminating duplicative purchases and increasing volume discounts. That’s a key reason why they’re moving all state agencies onto the same eProcurement system and encouraging local governments to take advantage. They want to see where they can consolidate purchases to improve pricing and leverage pre-negotiated contracts to expedite purchases.
- They are leveraging automated procure-to-pay platforms to better track spending, increase accountability and expedite solicitation, contract award and contract management actions.
What does that mean for suppliers like you?
- Take the time now to set up your free Periscope S2G profile, as many states (and local governments) now require vendors to be registered in the system in order to become a vendor, access solicitations, communicate with procurement officials and submit bids.
- If you haven’t secured a statewide contract for your goods and services, then you need to make sure your catalog is viewable in these marketplaces ASAP. You can read more about how to do that in this blog post as well as on this Marketplace information page.
- You may be asked to self-certify that you are a disadvantaged business entity (DBE). Take care to confirm that you do, in fact, meet all the criteria to gain a DBE advantage when you go through the self-certification process. If something changes later and you no longer qualify, then proactively notify the state. There could be dire consequences if it comes to light at a later date, after you’ve been awarded a contract based on DBE preference, that you don’t check all the boxes.
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- Be prepared for contract negotiations. With COVID-19 straining budgets, we’ll likely see expectations rise for pricing reductions – especially if you are in a category with a lot of competition, such as commodities or IT.
Finally, make sure that you stay on top of changes to state and local procurement strategies and re-orgs. These transformation efforts are not just centered on technology modernization and process refinement. In many cases, team structures are changing, too. Know who to contact with questions and insights about upcoming procurement opportunities. People you worked with before may not be the ones you need to call now. Of course, once you build relationships with the right people, it will be easier to get clarification on changing processes, policies and systems.