Similarly to our previously written blog on Vendor Management for Business, this blog will focus on Vendor Management in Public Sectors. Public sectors include government and publicly controlled or publicly funded agencies, enterprises, and other organizations that deliver public programs, goods, or services. The United States economy is considered a mixed economy because it is made up of a mixture of sectors, including both private and public. Examples of employment in public sectors include military, law enforcement, infrastructure, public transit, public education, along with health care and those working for the government itself, such as elected officials.

Taxpayer Dollars

To protect taxpayer dollars, government entities must award a contract for the best value based on a solicitation process. This is an important distinction between private sector business procurement, where a vendor can play a more active role in the selection process. In business, you can opt to contract with any vendor you choose. In public sector procurements, contracts are awarded based on clearly defined criteria. While the criteria vary between procurement types, the vendor’s qualifications and the overall cost of the proposal are always considered. Every decision must be carefully documented, and the rationale for selecting a given vendor must be based on clear and objective factors.

Procuring Publicly

This is why government solicitations should contain an accurate and well-thought-out Scope of Work (SOW). Unfortunately, government procurements are far more complex than purchasing in the private sector. A government solicitation must pass through a rigorous, multi-layered review process before an official selection can be made. Even once the selection is made, other vendors can raise objectives and challenge the procurement award. Momentum consultants have helped many government clients to develop strong SOWs to protect taxpayer dollars and ensure that projects are comprehensive, well understood, and poised for success.

Vendor Selection requires realistically evaluating whether your procurement needs can and will be met. Will the vendor have access to the resources needed, including agency time? Are the approval, phase gates, change control, and other factors clearly spelled out? Are Service Level Agreements (SLAs) realistic and enforceable? Does the vendor’s proposal make sense to their overall timeline, or are they going to over promise and under deliver? Are they licensed? Can they meet compliance requirements? As always, communication is pertinent and meetings to set vendor expectations before and after the signed contract are essential.

As an appointed government official procuring the vendor, there will frequently be a lot of interest and scrutiny of the vendors, their work and your oversight. As Amy Townson, Momentum’s Co-Director of Service Delivery, explains:

Everyone makes fun of or complains about the government procurement process, and it’s true that it can be tedious as you jump through the many hoops throughout the process. However, what people fail to realize is that the procurement process is in place to protect EVERYONE involved. As a vendor, I want to make sure that the work I contract to complete is achievable for me – I want to make sure that the partnership I’m entering will lead to everyone being successful. As a government entity, you want to make sure you are setting the foundation for a successful contract while also protecting the agency and government officials from unnecessary criticism, objections, or challenges. You also want to be a good steward of taxpayer dollars and ensure that every dollar is used efficiently and ultimately provides value to the agency.

Vendor Relationship Management (VRM)

Once the government secures the contract, you, as the agency leader will have to manage the cards you have been dealt. Vendor management is a broad process that includes vendor selection, contract management, vendor relationship management, performance evaluation, and service excellence. ​

• Vendor selection – Plan procurements wisely. What criteria will you use to evaluate potential vendors? All too frequently, the only criteria we use are cost but we all know that cost is only one factor that goes into the process. Other potential factors to consider include:​

1. 1. Reputation​
   2. Insurance, certifications, or other professional credentials​
   3. References​
   4. Their understanding of your needs​
   5. The thoroughness of their proposed solution​
   6. Trust​
   7. Responsiveness​
   8. Transparency​

• ​Contract management – How well do you actually manage the contracts that you have with your vendors? Are they billing you accurately? Are you paying the bills in a timely manner? Do your contracts spell out your expectations, are there any constraints, what tasks will the vendor will do (or the services provided), or the quality requirements that must be met? ​
• Performance evaluation – How will you know if the work your vendor performs meets your expectations? Are you evaluating their performance and outcomes or are you just rubber-stamping their work? ​
• Service excellence – Can your vendors consistently meet (or exceed) your expectations? Are they wasting product or having to do a lot of rework? Is your vendor wowing you? ​ To learn more about how vendors can truly wow customers read this blog by Amy Townson.

VRM Critical Components

With any vendor relationship, there are three critical components that you need to address. Each are equally important, and you may find that different people within the organization are responsible for them. ​

• Administration – This includes the up-front planning of the procurement process, including the standard procurement language, and onboarding activities to make sure your vendor has the access they need – to the building, software, etc. It also includes time tracking, cost tracking, meeting financial commitments, and so on. ​
• Relationship – Building the relationship with your vendors is critical. You need liaisons that collaborate with your vendors and partner with them. ​
• Technical – And, of course, you brought the vendor on to meet specific needs. Are those needs being met? Is the quality and performance meeting your expectations? Are service level agreements, outputs, and deliverables as expected?

It’s important to remember, too, that procurements can happen at any point – before, during, or after a project or as part of normal operations. So, having a plan for how you will manage your vendors in place BEFORE you need them helps to make sure that the process goes smoothly. ​

​Saying Goodbye

You should always debrief your vendors by recognizing their accomplishments. Complete your administrative tasks by retrieving materials that the vendor was privy to during the project. For example, in most government buildings, you need your own security code and badges to enter the building. Once the vendor is no longer needed, make sure to deactivate their code and retrieve their badge. Safety first!

Calling All Public Sectors!

Raise your hand if all of this information is relevant to procuring and managing vendors in your agency. If you don’t know where to start or how to implement a process like this, we are here to help! Contact Momentum today for further consultation regarding our Process Improvement Services or our Implementation Support Services!