PurchTips - Edition # 68

 

This is the Web-based version of this article. Click here for the printer-friendly version.
* More Purchasing Articles

Picture of Charles Dominick, SPSM, SPSM2, SPSM3

Government Vs. Private Sector Purchasing

By Charles Dominick, SPSM, SPSM2, SPSM3

Do You Know What Best Practices Can Cross Over?

If you are a private sector purchaser who ever wondered what it would be like to be a government purchaser - or vice versa - today's resource will be of great interest to you. Next Level Purchasing's president, Charles Dominick, recently had the pleasure of interviewing Tom Youngs, the Chief Procurement Officer for Allegheny County, Pennsylvania. Prior to accepting his role as the head of that government purchasing office, Tom gained valuable experience in the private sector, so he knows both sides very well. This resource will provide excerpts from that interview to give you insight into both roles and how they compare to one another.

CD:

It is easy to assume that your group is responsible for buying things like computers, police uniforms, and forms. What types of products or services are you responsible for that may surprise our readers?

TY:

Along with uniforms, the officers need guns (and) gas masks, so we buy some pretty high-powered items there. For the Coroner's lab, we buy testing things such as monkey brains. And with parks, we actually have buffalos - we've purchased animals. So the Purchasing Agency is sometimes a little difficult. We have a very wide array of items to purchase and it's a little tough to know all of them, but we give it our best effort.

CD:

What do you feel are the biggest differences between government and private sector purchasing?

TY:

The biggest differences I've seen are the openness and the "publicness". Everything we do is open to the scrutiny of the public. When I started here, my salary was in the newspaper. We do most of our purchasing through an Invitation For Bid process, which involves a public bid opening. You can see every bid we've received. We have a public bid tabulation, which we post on our Web site. And the final contract - that's posted on our Web site as well. So everybody knows what we're doing.

An Invitation For Bid does not allow us to negotiate - we, by law, have to award to the lowest responsive, responsible bidder. We can call the supplier for clarification, but cannot call him to ask him to do better.

CD:
What are some of the most common misconceptions about government purchasing?
TY:

I think there's a few. People say: "You award to the low bidder." I can't argue with that because, by law, we have to. But, in order to get there, there's a lot of steps. The apparent low bidder is the one who seems to have the lowest price when you do the initial comparison. But we only award to the lowest responsive, responsible bidder. Yes, we award to the low bidder, but only after a great amount of homework to determine that they are a responsible firm and their bid is responsive.

There's some question as to the professionalism of public purchasing. There are certifications that public purchasers can receive. We encourage our people to get certification and, in fact, everyone in this staff except one has a professional certification.

CD:

You bought in the corporate world before joining a government entity. What traditionally private sector practices did you bring with you to make improvements in your government role?

TY:

Only now is the government coming along with terms like strategic sourcing, which have been thrown around in the private sector for a good number of years now. We started down that road four or five years ago, doing it relatively quietly in terms of supplier reduction. We've gone through a process to reconfigure our bids that we can award on a lump-sum basis versus a per item award. In terms of supplier reduction, we've been able to manage our suppliers better.

And the strategic sourcing process, (we're) going out and looking for more companies rather than just depending on the same old guys who've always bid. Three pieces we hang our hat on: reducing cost, customer service, and professionalism. I think we've taken all three of those from the private sector and been able to apply them here.

CD:

Were there any unique challenges of government purchasing that you just didn't experience in the private sector?

TY:

Yes - the high level of scrutiny with newspaper reporters, separately elected officials, and suppliers feeling free to tell you "I know what Company B bid, you better be awarding to me." Truthfully, it makes our lives a little easier. We post all of our contracts on the Web site. If a company wants to get in the County's door, I'll say "Look at the Web site. See what our contracts are. Can you beat that price or come close? That'll give you a feel if you can get in." There's nothing confidential here. It took time getting used to, but I see the benefits as well.

CD:
What government best practices should a private sector purchaser consider adopting?
TY:

I've had suppliers say: "Once I have an award with government, they are true to me. I don't have to worry about losing business because I didn't play golf on a particular day." That felt good. We stick with our suppliers.

(keep reading for a FREE Offer)

Spotlight On Professional Development Opportunities

SPSM Certification

Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.

You see, today's employers refuse to reward employees for yesterday's skills.They demand that purchasing professionals like you use the most modern skills and achieve unprecedented results. They want you to save more money, achieve better operational performance, and reduce risk.

Is lacking a purchasing certification keeping you from getting the results, opportunities, respect, and money that you want out of your career? Today's employers refuse to reward employees for yesterday's skills. They want you to save more money, achieve better operational performance, and reduce risk. They demand that purchasing professionals like you achieve unprecedented results and without the most modern skills that can be a challenging feat!

So how can you acquire the most modern skills, achieve meaningful results, and convincingly prove your capabilities to today's employers? There is an impressive purchasing certification program that will teach you what you need to accomplish all of this and more. It is the SPSM® Certification, earned by completing the Senior Professional in Supply Management® Program. And you could earn it in less than a year - maybe even much less than a year!

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) (with the option of getting a Study Guide on an iPad) at:

Distinguishing yourself as an achiever in purchasing is key to sustaining a rewarding career, even in these difficult economic times. Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) at:

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices  into your organization and achieve your career potential. And if you sign up for the Senior Professional in Supply Management® Program on or before May 31, 2008, SPSMSM Certification Program on or before 4/30/2007, you also get these and other bonuses valued at over $700:

  • FREE $30 gift certificate to Amazon.com!
  • FREE CD-ROM with printer-friendly versions of the class materials!
  • FREE Purchasing Performance Measurement spreadsheet template!
  • FREE audio CD about purchasing job security!

To learn how to earn your SPSM® Certification and get these valuable bonuses, visit:

Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to takeif you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:

Learn how to earn your SPSM® Certification at:

www.NextLevelPurchasing.com/spsm.html

FREE Offer!!!

Purchasing Leaders: What are the secrets to having a successful team? This question is answered by our FREE whitepaper "The Purchasing Leader's Guide To A More Successful Team."

To Get Your Copy of

"The Purchasing Leader's Guide To A More Successful Team,"

Visit http://www.NextLevelPurchasing.com/plg


Free Procurement Training & Certification Starter Kit

This Starter Kit gives procurement professionals like you a clear idea on what it will take to become certified. You'll get an excellent feel for what you will need to learn and how long it will take.

Click here to learn more

Included in your free Starter Kit:

  • Access to two lessons from courses that are part of the Senior Professional in Supply Management® Program
  • A Certification & Training Planning Template
  • Case studies
  • A free Basic Membership in the NLPA

Together, these materials will help you decide how well the SPSM® Certification can help you achieve your career goals.

So, what are you waiting for? Begin your pursuit of a more rewarding procurement career – get your Procurement Training & Certification Starter Kit now by signing up for a free NLPA Basic Membership!

If you are already a member of the NLPA, click here to login and visit the "Starter Kit" tab to access these resources.