NIGP position papers define the organization's position on important and relevant procurement topics, policies, and practices that have far-reaching implications for procurement professionals and the customers they support. Position papers are developed by a volunteer task force under the leadership of the NIGP Board-appointed Legislative and Position Committee.
Best Value Procurement Methods: Professional Services - Overcoming the Limitations of Low-Bid and QBS
In this position paper, NIGP explores procurement best practices and methods for overcoming the limitations of low-bid and qualifications-based selection (QBS) methods of selecting professional services providers. NIGP does not support mandates that require public entities to apply a QBS method for selecting service providers. Instead, NIGP supports two principles, i) price competition and, ii) ideas competition.
When combined with other important factors to achieving public interest, following these two principles can lead to balance in procurement situations. To achieve this balance, it is essential for a public entity to match its selection criteria with its needs and the options available on the marketplace.
This paper explores how public procurement has learned from previous mistakes of focusing solely on price, and the importance of relying on other methods to evaluate suppliers, including a best value" selection method to create a more equitable competitive landscape. It demonstrates how this method is better for public entities because it is not a one-size-fits-all method and, therefore, is more likely to be suitable for all types of entities and situations.
Maintaining Procurement Principles as Technology Advances
This position paper explores the importance of maintaining principles in the procurement profession and the challenges presented by an ever-changing technological environment. Technology is, overall, having a positive impact on public procurement operations, especially in the advancement of e-procurement. However, there are also limitations to consider, including the fact that technology has the potential to enable shortcuts or remove professional judgment at particular steps, which could lead to several risks, including fraud.
As advances in technology permeate procurement activities, procurement professionals need to understand the potential implications of technology when it's utilized in their organization's procurement systems. Implementing procurement solutions that are technology-based will not change underlying laws or policies, just processes. In order to preserve the integrity of the procurement process, procurement professionals need to closely examine all changes to ensure that processes strengthen procurement values, including remaining fair and inclusive.
This paper examines the potential implications of an e-procurement process and outlines steps for procurement professionals to take when adapting from a manual to a technologically-driven process that maintains the integrity of the procurement profession.
The Strategic Value of Procurement in Public Entities
The strategic value of procurement in public entities is not always readily apparent, especially compared with other important elements, such as making sure taxpayer dollars are spent responsibly. While not all-encompassing, this paper addresses several ways that procurement adds strategic value to public entities, including risk mitigation, contract management, supplier relationship management, technology use, and spend management.
NIGP believes strongly that organizations must involve procurement professionals early in the strategic planning process to gain the most value for their respective organizations. When procurement professionals have a strong seat at the planning table and are brought on early, they ensure that their procurement strategies align with the organization's overall goals and strategies.
In addition to describing how procurement adds strategic value to public entities, this paper also discusses opportunities available for procurement professionals eager to deliver strategic value to their public entity every day. By understanding how and when they can add value, procurement professionals are better equipped to make decisions that have a positive impact on the public.
Local Preference in Public Procurement
This paper explores the reasons why NIGP does not support the use of preference policies. NIGP maintains that preference policies, including local preferences, conflict with the fundamental public procurement principles of impartiality and full and open competition. Those who promote preference policies claim advantages of helping and protecting the local economy. However, there are also considerable disadvantages to consider, including an increased cost to taxpayers to implement these types of program, a limitation on supplier competition, and a reduced incentive for local businesses to provide the best value for the dollar of purchased goods and services.
While NIGP does not support the use of preference policies, it does support economic, social, and sustainable communities as part of its core values and guiding principles. NIGP acknowledges that governments might adopt local preferences as a tool for improving their local economies and recommends that local procurement preferences only be implemented as one of several criteria in a 'best value' evaluation and award process.
This paper examines advantages and disadvantages to local preferences in public procurement and gives an in-depth explanation of why NIGP does not support it as a means of improving local economies.
Procurement Authority in Public Entities
Procurement authority is a fundamental concept in the public sector and in the administration of government. It is extremely important for governments to spend taxpayer dollars responsibly, protected from undue influence and in the best interest of the communities they serve. Government can achieve these goals by following public procurement policies, which are best accomplished by delegating procurement authority to a Chief Procurement Officer who is accountable to a governing body or chief executive.
This paper explores what a public authority is, why it's important, and who should hold the position of public authority. It will also make a case for delegating procurement authority to the Chief Procurement Officer. It demonstrates that, by remaining impartial and transparent, the Chief Procurement Officer can help ensure that public funds are awarded to serve the best interest of the public at large and in full compliance of public policy and law.
Best Value in Government Procurement
Achieving best value is an essential goal of procurement practices. This position paper defines the NIGP understanding of what "Best Value Procurement" means and identifies steps organizations can take to articulate best value for their organization and how to achieve it.
"Value" combines several elements, including identifying what is important and how much is important. Describing the value of a procured good or service includes several procurement considerations, such as the reliability of suppliers, prioritizing preferences for types of businesses (veteran-owned, minority-owned, small businesses, etc.), and identifying all costs through a cost-life analysis.
This paper also describes the concept of a best value policy (BVP), which provides a framework for organizations to use in decision making, and it includes standards for accountability and a series of questions for procurement professionals to answer when determining what best value means for a particular situation.
Negotiation: Lost Art or Core Competency?
Negotiation is a valuable skill for procurement professionals and is a standard method of contracting in federal, state, and local government procurement. In procurement, negotiating is mainly used to help buyers and sellers arrive at a settlement, and it takes the form of binding contracts. Knowing how to effectively negotiate can help procurement professionals make sure their contracts bring the most value to their organization. Beyond that, procurement professionals should also understand how to negotiate in a way that still satisfies the other party.
Procurement professionals need to prepare and plan for negotiations in order to achieve win-win solutions. Negotiation can improve the overall combination of quality, service and other elements required for successfully meeting the organization’s requirements. As a core competency, negotiation requires training and practice through professional development.
This paper explores how negotiation is perceived in the world of public procurement and explores whether it is understood as a lost art or a core competency among agencies. It offers suggestions for how procurement professionals can improve their negotiating skills.
Cooperative Procurement: Great Value, Great Confusion
Cooperative procurement solutions offer resource challenged agencies the opportunity to improve the efficiency of their operations while saving money. This paper demonstrates how cooperative procurement is effective in saving taxpayer dollars, and what makes it a viable alternative to conventional, independent procurement processes.
Cooperative solutions are appropriate for many circumstances, but they are not a solo solution for all purchases at all times. Cooperative procurement was developed to meet specific needs to realize their full value when applied with an understanding of their appropriate use and limitations.
This position paper describes NIGP’s view of cooperative practices and programs while also examining the nature of, and changes in, the cooperative procurement landscape. It recommends best practices in the evaluation and use of cooperative solutions and emphasizes the responsibility of procurement professionals to ensure that cooperative solutions are implemented in a manner consistent with local legislation and with due regard for preference groups.
Outsourcing in the Public Sector
Outsourcing in the Public Sector emphasizes the essential role of procurement staff in the outsourcing decision and its successful execution. In the public sector, the term "outsourcing" refers to the practice of contracting out to third-party vendors functions that had previously been completed by public employees. The practice of outsourcing can be fiscally sound. However, it should not be undertaken without serious consideration about its potential implications.
Outsourcing has been common practice in government for at least a century, although it gained momentum in the 1980's. While not a new concept, outsourcing still has a direct impact on a government entity’s ability to function successfully and deliver necessary services to the public.
This paper discusses the role of the Chief Procurement Officer (CPO) in making the decision for a public entity to outsource. The decision to outsource must be well-informed and thoughtful. It should be supported by skilled professionals who have the strategic vision and expertise to improve operations while protecting the public good.
Transparency in Government Procurement
Public procurement has a unique role when it comes to how democratic government is executed. It is simultaneously focused on supporting the missions of internal customers, while also serving as stewards of the public, whose tax dollars directly impact the decisions that their governing body make.
Transparency is essential for building trust and keeping the public aware of government practices in a democracy. Through transparency, government agencies can increase public confidence and ensure government stability. Technology has evolved to help government agencies communicate directly to the public, yet not every government entity has the financial ability to provide technology-based information.
In this position paper, NIGP highlights the historical importance of transparency in a democracy and reviews the contemporary tools available that enable even greater transparency. It offers a series of recommendations that governments can adopt to achieve transparency in practice, without undue burden.