Public & Social Sector Procurement Best Practices Exchange€¦ · 27/04/2016 · 3 Agenda Agenda...

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Public & Social Sector Procurement Best Practices Exchange

April 2016 Meeting

Washington, DC

Sponsored by:


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About

•  The Public and Social Sector Procurement Best Practices Exchange is a global initiative to connect public and social sector procurement leaders and collect/disseminate actionable best practices

•  In partnership with faculty from Michigan State University’s #1 Ranked Procurement and Supply Chain program; and Spend Matters

•  Includes Federal, State, Local and Social Sector leaders; private sector leaders active participants

•  Global reach, leveraging Public Spend Forum and Spend Matters offices in Europe and Asia…and advisory roles with the World Bank, Penn Law Center for Asian Law

About-ThePublicandSocialSectorProcurement*BestPracticesExchange

*NOTEabout“Acquisition”vs.“Procurement”–Theterm“procurement”isusedtorefertoallphasesoftheprocurementlifecycleincludingneedsidentiCicationandrequirementsdevelopment.Theterm“acquisition”isuniquetothefederalgovernmentandisgenerallyreferredtoasprocurementinallothersectorsincludingstate/local/private.


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Agenda

Agenda Topic Time Frame

Introductions & Agenda Overview 2:00-2:15pm

Briefing on Volcker Alliance Public Procurement Critical Competencies Study 2:15-2:45pm

Introduction to the Barriers to Entry Study 2:45-3:00pm

Perspectives on UK Public Sector Critical Issues 3:00-3:15pm

Break 3:15-3:30pm

Public Procurement Metrics Insights 3:30-4:10pm

Innovating Procurement Workforce Training - The “Training Sherpa” 4:10-4:40pm

Webinar Announcement – “Spend Visibility — A Critical Component of Measuring Procurement Performance”


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Break 3:15-3:30pm





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Break 3:15-3:30pm





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Barriers to Entry Study is intended to identify the most common factors that inhibit suppliers from competing for public sector work

ImperativesfortheStudy

•  Process,policyandculturalbarriersovertimehaveledtopublicsectormarketsbeingessentially“closedmarkets”

•  Governmentisdeprivedofthebest,mostinnovative,andcosteffectivesolutions

•  Suppliersarenotabletobringtheir

solutionstodrivemeaningfulchange;

•  Workdoesnot?lowtothemostinnovativeandoptimalprovidersthatcanactasstimulusforjobsandinnovation

ObjectivesTheobjectivesoftheBarrierstoEntrystudyareto:•  Identifybarrierstoentry,whether

cultural,process,technicalorregulatory,thatexistacrosspublicsectormarkets

•  Identifypotentialapproachesandbestpracticestoreducebarriers

•  Developaprioritizedagendaforaddressingbarriers

This study is in initial design stages…we anticipate working with a host of partners in driving this work forward


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Some initial insights/hypotheses on Barriers to Entry (1/2)

Process / Structure

•  Complexprocurementprocessesandregulatoryenvironments•  Onerousregulatoryrequirementsandpaperwork•  Dif?icultaccesstocontractvehicles•  Variancebetweenfederal,state,andlocalprocesses•  Lackoftrainingandinformationprovidedtosuppliers•  Limitedabilitytocommunicateorinteractdirectlywiththecustomers•  Assessmentmechanismsmaynotleadtothebestvendororhighestquality

product,justthelowestpriceorbestwrittenproposal•  Socioeconomicrequirements

•  Speedofoverallprocess•  SomeacquisitionsrequireafastturnaroundtosubmitRFIsandRFPswith

littlewarning•  Governmentmaynothaveasetlimitforthereviewbodytorendera

decision•  Governmentcantakeaverylongtimebeforecomingtoadecision•  Evenoncegovernmentandcompanyleaderscometoagreement,contracts

canstillgethungupwithinthebureaucracy•  Onerousandaggregatedrequirements

•  Requirementstoospeci?icandlengthy…little?lexibility•  Governmentspeci?icrequirementssuchassecurity,ADArequirements•  Pastperformancerequirementsleaveoutmanysuppliers•  Largecontractsthatarebundledmakeitdif?icultforsmallersuppliers

•  Financialconcerns•  Highbidsecurityrequirementsmayhindertheparticipationofsmaller

suppliers•  Pricejusti?icationsmaylimitpro?itability•  Governmentinvoicingprocessescancreatecash?lowchallengesfor

vendors


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Some initial insights/hypotheses on Barriers to Entry (2/2)

Culture

Legal and Intellectual Property

Externalities

•  Dif?icultiesincommunicationbetweenbuyersandsuppliers:•  Inherentlackoftrust,particularlybetweenthetechandnationalsecurity

communities•  Informationin-balanceandlackoftransparency/data•  Potentiallylackofacommonlanguage

•  Incumbentsupplieradvantages:•  Government’srisk-averseculturefavortheincumbentandisbiased

towardstriedandtestedsolutions,avoidinginnovationandtheintroductionofnewsuppliers

•  Lackofcooperationfromincumbentsuppliersduringatransition

•  Intellectualpropertyrightsnotprotected•  Citizenshipandlegalownershipofcompaniesmaylimitopportunitiestowork

withcertaingovernments•  Companiesmustbeabletodemonstratethattheycanprotectcon?identialdata

heldbyGovernmentagencies,andthelegalandcontractualrequirementsmaybeviewedasnotworththetroubleforsomesmallersuppliers

•  Fiscaluncertaintyduetoadministrativeturnoverorcongressionalbudgetstipulationsresultsinrisktovendors

•  Programmaticuncertaintyduetoadministrativeturnoverandshiftingpolicypriorities


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We’ve just started digging into research

World Bank, “Benchmarking Public Procurement 2016” report http://bpp.worldbank.org/~/media/WBG/BPP/Documents/Reports/Benchmarking-Public-Procurement-2016.pdf?la=en

World Bank, “Interesting Findings of the Benchmarking Public Procurement Project” summary http://bpp.worldbank.org/~/media/WBG/BPP/Documents/Reports/BPP2016-Highlights.pdf?la=en

IJIS Institute, “Strategies for Procurement Innovation and Reform” report http://www.asca.net/system/assets/attachments/6609/procurement_report.pdf?1389295632

Office of Fair Trading, “Supply of Information and Communications Technology to the Public Sector” market study “http://webarchive.nationalarchives.gov.uk/20140402142426/http://www.oft.gov.uk/shared_oft/market-studies/OFT1533.pdf

Office of Federal Procurement Policy, “Myth-Busting” memo https://www.whitehouse.gov/sites/default/files/omb/procurement/memo/Myth-Busting.pdf

Office of Federal Procurement Policy, “Myth-Busting 2” memo https://www.whitehouse.gov/sites/default/files/omb/procurement/memo/myth-busting-2-addressing-misconceptions-and-further-improving-communication-during-the-acquisition-process.pdf

Forbes, “Challengers and Opportunities When Doing Business with the Government” article http://www.forbes.com/sites/theyec/2015/04/24/challenges-and-opportunities-when-doing-business-with-the-government/#451eb5d56cbe

Kauffman Foundation, “Challenging a Risk-Adverse Government Procurement Culture” article http://www.kauffman.org/blogs/policy-dialogue/2015/october/doing-business-with-government-difficult-for-startups

Wiley Rein, “Doing Business with the Federal Government – An Overview” article http://www.wileyrein.com/newsroom-articles-1856.html

Supply Chain Digital, “Public Sector Procurement Reform” article http://www.supplychaindigital.com/procurement/2221/Public-sector-procurement-reform:-breaking-down-barriers-for-SMEs-by-Gatewit

Symposium on the Revised WTO Agreement on Government Procurement, “Encouraging the Participation of SMEs in the Government Procurement Sector” presentation

https://www.wto.org/english/tratop_e/gproc_e/symp092015_e/S3-4Gordon.pdf


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Next steps

•  Confirm overall scope of study

•  Continue to refine hypotheses

•  Select partners

•  Develop detailed design

Please let us know if you are interested in participating or helping with the overall design of the study


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Research identified common “metrics” areas and a revealed large variance in the number and type of metrics; primary research required to bridge the gaps

• The desired outcomes of procurement organizations: effectiveness / quality results, efficiency / managing for value, and compliance with laws, regulations, and policy (including socioeconomic goals)

• Metrics identified in the public sector attempt to address cost/value, customer satisfaction, supplier engagement, socioeconomic targets, human capital goals, and process efficiency

• The specific metrics (both number and type) used to measure and track against key areas vary significantly across public sector organizations and generally fail to provide meaningful insight

Overview of Secondary Research Findings

Areas not Addressed by

Secondary Research

•  Identify the best set of KPIs and metrics and clearly align them with public sector stakeholders and desired outcomes

• Develop a metrics framework that accounts for a procurement organizations maturity and level of influence – which can vary significantly across organizations

• Provide guidance and best practices for implementing a metrics framework – including overcoming common challenges facing organizations


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Identified public sector metrics frameworks tend to attempt to address the same areas

CommonlyIden+fied“MetricsAreas”

Cost/ValueLargerangeinmetricsfromtotalsavingstooutputperprocurementdollarspenttostrategicsourcingcontractu4liza4onrate

CustomerSa+sfac+onAgenciestendtobealignedoncustomersa4sfac4on(usuallyasurvey)

SupplierEngagementFrequencyandqualityofsupplierengagementfromprocurementorganiza4on

SocioeconomicGoalsMeasurespendandcontractpercentagestomeetsocioeconomicpolicies

HumanCapitalMeasuresintendedtoprofileprocurementworkforceandmeasuresuccessoftrainingcer4fica4ongoals

ProcessEfficiencyReducedlead4mesandlessrework(compliancetendstofallinhere);variesgreatlyfromorgtoorg

Arethesetherightsetof“metricsareas?”Howwelldothesealignwithprocurementstakeholders?


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A number of challenges have been identified when attempting to establish metrics or a performance management system

Leadership •  Lack of management buy-in / appropriate level of support •  Setting / determining the appropriate goals due to conflicting objectives IT Enablers •  Lack of data / information systems Talent •  Employee’s don’t have needed skill-set •  Inability to define a metric that is measurable (or not difficult to measure) and not subjective Engagement •  Organizational incentives, specifically for employees, not aligned

Challenges Establishing Effective Metrics

Whatotherchallengesareorganizationsfacing?Whatarethebiggestchallengestoestablishingandmeasuringmetrics?


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Appendix to Metrics Study Update


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Identified public sector metrics frameworks tend to attempt to address the same areas, however, KPIs will vary across agencies

Common“MetricsAreas” KPIsfromFrameworks

Cost/Value

ProductUnitCos4ng(PUC)FiscalResponsibility

CustomerSa+sfac+on

CustomerSa4sfac4onIndexCustomerSa4sfac4on

SupplierEngagement IndustryOutreach

SocioeconomicGoals

Contribu4onIndexSmallBusiness

HumanCapital

HumanCapitalIndexWorkforce

ProcessEfficiency

ProcessImprovementIndexContractAdministra4on

RedTextIndicatesKPIforAgency1BlueTextIndicatesKPIforAgency2

Observation1:AgenciesmayhaveverysimilarKPI’sforcertainmetricsareas

Observation2:SomeagenciesmaynothaveanyKPI’salignedtoaspeciEicarea

Observation3:KPIscanvarysigniEicantly,especiallywhenattemptingtomeasureefEiciency


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The specific metrics vary significantly across public sector organizations and are not always aligned to the areas they are attempting to measure

Sample“MetricsAreas” SpecificMetricsAlignedwithAreas

Cost/Value

Procurementsalarydollars/contractac4on(forlargeandsmallcontracts)Compe44onRate/Non-compe44verate/One-bidcontractrateAcquisi4onSavingsAchievedStrategicsourcingu4liza4onrateandsavingsProcurementsystem–up4meSustainablepurchasingrateTotalOpenGAOProtestRate

HumanCapital

%differencebetweenactualendstrengthandemployees%employeesmee4ngcon4nuouslearning%DAWIAcer*fiedtooraboverequirementAPCPGradua*onRateAPCPGraduatesemployedaUer1,3,and5yearsaUerprogramcomple4on

ProcessEfficiency

%ofautomatedprocurementtransac4onsAverageturnaround4meAveragecycle4meServicescontractsawardedYTD/previousFYRa4oofYTDinterestpenal4es/penal4estosameperiodpreviousFYPromptPaymentLateFeesFPDSAnnualCer4fica4onRateCPARSQualityComplianceRateOIG/GAORecommenda4onsOpenformorethan2years

RedTextIndicatesspeci?icmetricsfromAgency1BlueTextIndicatesspeci?icmetricsfromAgency2

Observation4:ThenumberandtypesofmetricsvarysigniEicantlyacrossagencies

Observation5:EvenwhenKPIsaresimilar,uniquemetricsareutilizedinagencies

Observation6:MetricsspeciEictoprocessefEiciencytendtovarythemostacrossagenciesandmaybelinkedtospeciEicstrategies


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Spend Visibility Webinar Overview

Webinar Summary Title: Spend Visibility — A Critical Component of Measuring Procurement Performance Date: Wednesday, April 27, 2016 Time: 12:30 PM Eastern Daylight Time Duration: 1 hour Webinar Description Public Spend Forum and Michigan State University, co-leaders of the Public & Social Sector Procurement Best Practices Exchange, are undertaking a global study on “Measuring the Success of Public Procurement.” As part of this study, and in conjunction with our Exchange sponsor BravoSolution, this webinar will discuss the criticality of having good visibility into how you spend when purchasing from suppliers, and how to better support measuring (and managing) procurement performance. Webinar Agenda •  Introduction to Spend Visibility (25 minutes) •  Public Sector Case Study — Spend Visibility in Action (25 minutes) •  Q&A Session (10 Minutes)


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Your Points of Contact

RajSharma

PierreMitchell

AshBedi

Rajisathoughtleaderfocusedonstrengtheningthemanagementcapacityofthesocialandpublicsectors.Rajadvisesleadersingovernmentandsocialsectorsonapplyingprovenpracticestoimproveperformance,transformprocurementanddelivermorevaluetocustomers/constituents.Rajco-foundedthePublicSpendForumandalsoservesasCEOofCenseoConsultingGroup,a?irmrecognizednationallyforitsaward-winningcultureandimpact.Healsoservesonseveralboards,includingHigherAchievementandMichiganStateUniversity’sExecutiveAdvisoryBoardforthesupplychainprogram.AndhehaswrittenasafellowfortheCenterforAmericanProgressandtheWoodrowWilsonCenter’sWomeninPublicServiceProject.Contact:Raj@publicspendforum.netFormerPresidentandCEOofCreativeProcurementStrategies,JosephSandorwasappointedtheHoagland-MetzlerEndowedProfessorofPracticeinSupplyManagementatTheEliBroadCollegeofBusinessofMichiganStateUniversityin2006.DuringhistimewithCreativeProcurementStrategies(CPS)SandoradvisedclientssuchasHarley-Davidson,JohnDeere,Electrolux,Rolls-Royce,Whirlpool,Hewlett-Packard,IBM,Motorola,ConAgra,Delphi,Sandia,SchlumbergerandtheUSAF.Sandorhasoverfortyyearsproactivesupplymanagementexperiencewithprogressivelyincreasingresponsibilitiesemphasizingcostprevention/reduction,teambuilding,strategicsupplierallianceformation,systemsdevelopment,logisticsoptimization,sharedservices,inventorycontrolandcostmodeling.Contact:[email protected],SeniorAdvisoratthePublicSpendForumandChiefResearchOf?icerandManagingPartnerofAzulPartners,Inc.,has25yearsofprocurementandsupplychainindustryandconsultingexperience,andisarecognizedprocurementexpertspecializinginsupplyprocesses,practices,metrics,andenablingtoolsandservices.Heisaregularcontributortobusinesspublications,afrequentpresenteratindustryeventsaroundtheworldandcountshimselffortunatetohaveservedandinteractedwithsomanyCPOsandfutureCPOs.PierreisaSr.AdvisorandregularcontributortoPublicSpendForum.Contact:Pierre@spendmatters.comAshBediisamemberofthePublicSpendForummanagementteam,responsibleforoverallbusinessstrategyandresearch.Ashhasmorethan25yearsofexperienceinbothconsultingandindustry,withexpertiseintheareasofstrategicplanning,procurementandsupplymanagement.Ashbringsablendofprivatesectorandgovernmentindustryexperience,havingworkedwithFortunecompaniesaswellasnumerousfederalagencies.Ashhasalsobeenafrequentpresenterathighpro?ileforumsincludingInstituteofSupplyManagement,NationalAssociationofPurchasingManagers,SourcingInterestsGroup,andNationalContractManagementAssociation.AshpreviouslyworkedatA.T.KearneyandCenseoConsultingGroup,amongothers.Contact:[email protected]

ProfessorJoeSandor

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Public & Social Sector Procurement Best Practices Exchange€¦ · 27/04/2016 · 3 Agenda Agenda...

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