Last Summer, I gave a presentation to an association of regional government purchasers.
I always get nervous when I speak to government purchasers. There always seems to be two types of government purchasers:
- Those that acknowledge that government purchasing is behind private sector purchasing and want to apply private sector purchasing best practices to their work in order to catch up; and
- Those that don’t even want to hear about private sector purchasing because “it doesn’t apply to government purchasing”
So, one of the first things I wanted to do in my presentation was to see what type of folks were in my audience. I requested a show-of-hands in response to two questions I had:
- How many of you are allowed to negotiate?
- How many of you have a cost savings goal?
The responses were a bit shocking for me.
Only about half of the people in the room were allowed to negotiate.
And – get this – only one person even had a cost savings goal!
So, if you were a taxpayer in the organizations represented by these government purchasers, how well would you think your tax dollars were being managed?
I know how I’d feel. And let me put it bluntly…constraints like these are bad business!
Now, I know that a decent percentage of people reading this are, in fact, government purchasers, so let me make it clear that I do not blame the purchasers themselves for these constraints. But I do blame the elected officials that have bestowed – or continued to allow – such fiscally-questionable restrictions on government buyers.
One can argue that government is not business. But, I would argue that anything involving the exchange of money for goods or services is business. And good business involves not spending any more than you have to.
There’s the perennial debate in government…what programs must be cut to bring expenditures in line with tax revenues?
Well, I’m here to say that this debate is short-sighted. I’ve seen good procurement practices save organizations up to 20% or more per year. A government agency that cut its spend by 20% while getting the same products and services may not have to cut any programs. Or it could cut programs and pass along an even bigger tax reduction to taxpayers. Or it could even adopt new programs that it couldn’t afford in the past.
Any one of those outcomes would make a politician a hero. Political heroics are usually pretty hard to accomplish. But getting procurement out of the dark ages would be relatively simple. It’s amazing that procurement reform hasn’t been adopted by more politicians in either their tenures as elected officials or as part of their campaigns.
To me – based in part on my experience speaking for the aforementioned government purchasing association – procurement reform is politicians’ undiscovered supertool.