In February, Governing released a report ranking 39 states based on their procurement policies. They were ranked in 10 categories, including their use of technology, how they engage with vendors and how effectively central procurement offices work with agencies.
Six states stood out as top performers: Georgia in the lead, followed by Virginia, Minnesota, Utah, and, tied for 5th place, Massachusetts and Ohio.
We helped evaluate the states and saw tremendous variation in the ways states handle this important function. To hear more about how the number one state got to be where it is, we interviewed Lisa Eason, the deputy commissioner of Georgia’s purchasing office, and her predecessor, Leslie Lowe, who retired in 2015.
The following interview has been edited for clarity and length.
What were the first actions you took when you came in?
Lowe: The first thing I did was sit down with customers and ask what they needed and how we could help them. I probably got to 50 different entities in the state, including higher education, and I established a customer advisory group that wasn’t there before.
Eason: At that point in time, I was one of those customers, and the process was too slow.
What were the key actions you took to speed up the purchasing process?
Lowe: The previous deputy commissioner had dramatically increased procurement officials’ training. That enabled me to increase their delegated authority. When I came in, they were only allowed to handle purchases below $250,000; we raised it to $1 million. For people in the agencies who were highly trained and skilled, I’d go up to $5 million. In addition, the legislature went from a $5,000 no-bid limit to a $25,000 no-bid limit. That also provided both flexibility and speed.
What were the key elements that provided fertile ground for other reforms?
Lowe: Building the curriculum and training classes, revising the rule book and the state’s processes and procedures, and implementing enterprise-wide technology. That was all initiated before I started in 2011. You can’t overlook any of that. The state developed a cradle-to-grave seven-stage process for procurement, and it gave people the tools they needed at each stage.
Eason: It meant everyone across the state was handling procurements the same way, so you had consistency.
How did the technology improvements help?
Lowe: We had a better workflow because we weren’t waiting for a piece of paper to go from one person’s desk to another. But we also needed a different skill set. Our director of strategic sourcing said, ‘I have procurement specialists, and they know procurement, but they don’t know data, spreadsheets, pivot tables and how to analyze a massive amount of data. I need help crunching the numbers so I can free up my procurement people to do procurement.’ We reallocated our head count and hired data analysts to crunch the numbers and do market research. We looked for people with math backgrounds. We were able to find young college graduates who are whippersnappers.
Eason: We call them our “mathletes.” They are coming up with new ideas all the time. Thanks to their work, we can now structure a contract to take into account the difference in regional offices. With something as simple as shredding paper, for example, we now know that southern Georgia might need a bigger container than middle Georgia or the coastline. If you’re contracting for more than is needed, you’re paying too much and wasting money.
What’s coming next for Georgia procurement?
Eason: We’re still improving relationships with the customers. Some of the agencies still perceive us as being too slow, and there are still roadblocks. But that number is getting fewer and fewer every day.
We’re sending teams out to agencies to evaluate their processes and provide them with recommendations on what they could improve. If they’re doing something really well, we can take that to other agencies.
Internally, we’re continuing to look at our processes to see if there are ways to streamline, so we can have more time for procurement training. We’re working on making some of our training classes more interactive. We’re also developing a two-day contract management course so procurement officers can understand their role throughout the life of a contract. People are lined up to take that. And we’re offering classes to potential vendors, too.
What are the biggest misconceptions about purchasing?
Lowe: I can only say this because I’m retired. We are unappreciated and not acknowledged as having superstars here who work hard every single day. They are doing a great job for the state of Georgia. That doesn’t get in the newspaper because it’s not sexy.
Don’t people realize how important purchasing is?
Lowe and Eason, in unison: No, they absolutely do not.