State governments are not communicating effectively with private industry, and it’s costing them both money and opportunities to access the most innovative technologies, according to a report published this month by the National Association of State Chief Information Officers.
Following on work initiated last year with the National Association of State Procurement Officials, or NASPO, NASCIO’s recent publication uncovers a disparity in how state officials and private-sector vendors view state IT procurement processes. While state officials tend to think their processes are effective, vendors don’t. According to the report, attendees of a recent NASCIO procurement roundtable at the group’s annual conference in San Diego agreed that the best way to mend this division is through greater communication.
“I really think people take [communication] for granted,” NASCIO’s Meredith Ward told StateScoop. “But the one thing we found over and over again is that it’s not happening.”
That state governments aren’t communicating effectively with the private sector is borne out in NASCIO’s survey numbers. When asking state CIOs and chief procurement officers how effective they thought their processes were for getting the most cost savings, getting the best value, and attaining the most innovative technologies, the majority said they believed their processes were “effective” or “very effective.”
But when the private sector was asked to generalize about state IT procurement, the answers were flipped. Thirty-one percent of vendors said they believed states were maximizing cost savings, 15 percent said states were getting the best value and only 6 percent said states were effective at soliciting the most innovative technologies.
States may be short-changing themselves with antiquated procurement processes, but Jennifer Saha, director of public-sector councils for the nonprofit trade group CompTIA, said private industry is missing out, too.
“Procurement has long been a frustration for CIOs. It’s called out in that paper, and we observe it every single year in the state CIO survey, and it’s just as equally a frustration for the private sector,” Saha said.
CompTIA, which helped produce the paper alongside the National Association of State Chief Administrators and the IT Alliance for Public Sector, found that while states’ procurement processes may be rooted in legitimate concerns of liability and fairness, they are generally not serving anyone well in 2018.
“We’ve seen in the past that we come up with an RFP, throw it over the fence, you’re not allowed to talk to each other, you have to guess what the state is trying to achieve, and then throw it back over the fence,” Saha said.
A common use of unlimited liability clauses, which protect states from financial risk, was identified by vendors surveyed as a major deterrent from bidding on projects. That risk, Ward said, keeps companies of all sizes away from states that strive to create the most competitive bidding environments possible.
“Sometimes smaller companies are more apt to [compete] because they don’t have as much to lose, but sometimes smaller companies won’t because their entire company could go under,” Ward said.
And as it turns out, unlimited liability is something of a misnomer, because even if the state is protected from financial risk, failed or stalled projects can still — and frequently do — damage a state’s reputation and impede its ability to deliver services.
“States are always liable,” Ward said. “Someone’s head is always on the chopping block.”
One of the report’s top recommendations, based on a survey of vendor representatives, is to remove unlimited liability clauses.
Vendors also suggest that states be less prescriptive when they craft their procurement documents to allow opportunities for optimal solutions.
One anonymous vendor respondent said: “When it comes to complex IT procurements, states that engage with vendors early in the process on describing the business problems they are looking to solve, rather than jumping into a detailed list of requirements too soon, stand a better chance of finding a solution which best suits their set of circumstances, which in some ways may be unique.”
Perhaps most importantly, NASCIO and NASPO are advising state officials to think of procurement as a process that begins well before a request for information or request for proposals is published. This idea is taking hold in some states like California and Idaho, where officials have published terms and conditions to get feedback from industry before the procurement process officially begins.
“I think there are ways industry and government can collaborate that don’t give anyone an unfair advantage and don’t slow the process down,” Saha said.
CompTIA, which sometimes acts as a mediator between the private sector and state and local governments as they hash out these challenges, recently helped Los Angeles County introduce innovation into its procurement process for a host of upcoming technology projects to support a regional homelessness initiative. By hosting a series of workshops ahead of the procurement cycle, the county is attempting to align its priorities with vendors and encourage as many creative ideas to be brought forth as possible.
This way of buying technology is not the norm for the public sector, but as many officials shared at NASCIO’s annual conference, they see the need for change.
“I don’t want to say it’s a new day in terms of state IT, but everything is changing so quickly,” Ward said. “Our processes just have to try to catch up to that.”