Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

The Pandemic’s Opportunity to Improve Government Procurement

The emergency has underlined outdated procedures and rules that hamper effective, efficient public purchasing. There are principles for creating better systems that can outlast the current crisis.

N95 masks
(Shutterstock)
Shutterstock
The onset of COVID-19 has not only highlighted a critical shortage of ventilators, along with masks, gloves and other protective gear, but also has stress-tested government procurement processes that too often are slowed by outdated rules and regulations. In addition, the CARES Act's funding for cities and states, as well as any additional forthcoming federal pandemic aid, will only be successful if the funds are spent quickly and well.

In the midst of this global pandemic, the poor federal response to the needs of stressed health-care systems has left states and local governments to develop emergency procurement processes for the personal protective equipment (PPE) urgently needed for health-care and other essential workers. What has resulted has been a Wild West system of procurement as states had to bid against one another for resources and hospitals desperately resorted to extreme measures. Hospital administrators beseeched procurement teams to purchase foreign-made PPE on open markets, thus skimping on quality inspections, standards and other common protocols for "peacetime" procurement. Meanwhile, traditional medical-supply distribution companies insisted on following peacetime procedures undermining the urgency of the situation, such as asking possible suppliers for PPE product samples and submitting them to standard compliance protocols.

This issue is exacerbated by other procurement complications: With economic uncertainty, manufacturers have demanded heftier down payments on orders. It is more difficult to verify the exponentially growing number of potential suppliers. New, inexperienced suppliers are not prepared to manage complicated international shipping and customs processes. And purchasing in an emergency increases risks for governments, such as when unvetted, faulty suppliers receive contracts worth tens of millions of dollars only to fail to deliver.

With the urgency of the COVID-19 pandemic, it is clearer than ever that the standard procurement procedures governments have been operating with need a transformation — and hopefully one that will permanently improve procurement protocols beyond the global health crisis. Procurement systems are designed to prevent corruption and not, as a rule, to quickly solve problems. Yet in the time of emergencies, when new demand arrives rapidly, governments need to be flexible with rules and think about the benefit to public value versus archaic procedures that slow down necessary procurement.

One state that has been looking at procurement differently is Pennsylvania, which under the leadership of Curt Topper, the secretary of the Department of General Services, has been piloting the use of a startup tech platform called Procurated. Procurated, which is free for government users, allows procurement professionals to provide feedback on suppliers through a private social media-esque platform.

That's of particular benefit when it comes to the use of cooperative purchasing agreements, such as those that enable municipalities to piggyback on one another's contracts. But cooperative pricing is highly unregulated, resulting in a "buyer's-beware kind of system," says Topper, "so there's still a fair amount of due diligence that's required of the local municipalities when they use these contract vehicles."

The kind of communication across jurisdictions that Pennsylvania is pursuing is one reform that can help both during emergencies and normal operations. But the stresses during the current emergency underline a few other principles for creating stronger, more agile procurement systems:

Value speed. There are always opportunity costs for waiting, and those costs should be explicitly weighed against cumbersome procurement practices.

Compensate with transparency. Much of the rationale for today's procurement codes developed before open-government systems and in the face of local abuses. Sunlight compensates for a great deal. Maximum transparency concerning the process, award criteria and award rationale might not always prevent second-guessing or even mistakes, but it will insulate against charges of favoritism or cronyism.

Purchase off of the contracts of other agencies and jurisdictions that used a competitive process to procure the same service. A well-managed acquisition with clear competitive standards by one public agency should be sufficient for another.

Get elected officials to inoculate procurement teams. Speedy procurement is valued more than ever in an emergency like the pandemic, yet speed increases second-guessing. Elected officials need to understand the risks and rewards, including the risk of gotcha local journalism, and make clear to the public why new procurement processes are needed not only for the emergency but beyond.

Pay attention to service levels as much as price. Purchasing officials considering cooperative purchasing with other jurisdictions should study those jurisdictions' service-level agreements and review the reputations of their vendors. Cheapest often means unacceptable compromises.

Spending the taxpayers' money wisely and prudently is always going to be a challenge for governments. No procurement system will ever be perfect, but if the pandemic's urgent needs leave a legacy that timeliness and opportunity cost matter, the taxpayers of the post-pandemic future will reap the benefits.


Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.

A professor of practice at the Harvard Kennedy School and director of the Innovations in American Government Program. He can be reached at stephen_goldsmith@harvard.edu.
Special Projects
Sponsored Stories
Sponsored
Workplace safety is in the spotlight as government leaders adapt to a prolonged pandemic.
Sponsored
While government employees, students and the general public had to wait in line for hours in the beginning of the pandemic, at-home test kits make it easy to diagnose for the novel coronavirus in less than 30 minutes.
Sponsored
Governments around the nation are working to design the best vaccine policies that keep both their employees and their residents safe. Although the latest data shows a variety of polarizing perspectives, there are clear emerging best practices that leading governments are following to put trust first: creating policies that are flexible and provide a range of options, and being in tune with the needs and sentiments of their employees so that they are able to be dynamic and accommodate the rapidly changing situation.
Sponsored
Service delivery and the individual experience within health and human services (HHS) is often very siloed and fragmented.
Sponsored
In this episode, Marianne Steger explains why health care for Pre-Medicare retirees and active employees just got easier.
Sponsored
Government organizations around the world are experiencing the consequences of plagiarism firsthand. A simple mistake can lead to loss of reputation, loss of trust and even lawsuits. It’s important to avoid plagiarism at all costs, and government organizations are held to a particularly high standard. Fortunately, technological solutions such as iThenticate allow government organizations to avoid instances of text plagiarism in an efficient manner.
Sponsored
Creating meaningful citizen experiences in a post-COVID world requires embracing digital initiatives like secure and ethical data sharing, artificial intelligence and more.
Sponsored
GHD identified four themes critical for municipalities to address to reach net-zero by 2050. Will you be ready?
Sponsored
As more state and local jurisdictions have placed a priority on creating sustainable and resilient communities, many have set strong targets to reduce the energy use and greenhouse gases (GHGs) associated with commercial and residential buildings.