Magazine article Management Review

Procuring for a Common Purpose

Magazine article Management Review

Procuring for a Common Purpose

Article excerpt

A new federal government procurement system that involves partnering could have an impact on the way businesses buy and sell.

The code name is Blossom II. Deep within the recesses of the Pentagon, the Air Force is gearing up for what is likely to be its biggest, most complex and expensive mission since the Gulf war, perhaps even since Vietnam. Yet by the end of this mission 10 years from now, while billions will have been spent, not a shot will have been fired. Blossom II stands for Base Level Systems Modernization II. And the goal is to bring the entire non-weapons-system computer network onto the desktops of Air Force officers around the world.

What's new about Blossom II is not that the government is about to spend billions on yet another new computer system that will be obsolete long before the first screen goes on-line, but that a whole new way of acquiring this system is likely to get its first big test. It's a system of negotiated procurement, of partnership between government purchasing officers and contractors across the nation who are working together to solve a problem, not simply fill specifications set forth in telephone-booksized Requests for Proposals.

The concept has become known as Common Purpose Procurement (CPP), and it promises to revolutionize the way private industry does business with the government at every level. Hundreds of businesses that have long avoided government contracting, shuddering at the prospects of endless red tape and bureaucracy, will suddenly find a new and profitable customer for their goods and services.

"The goal is to try to make government procurement come closer to resembling the best practices from the commercial sector," says Steven Kelman, administrator of the Office of Federal Procurement Policy in the White House. "We are looking for new ways of doing federal procurement."

The search for these new ways led to a remote office in Ottawa, Canada, where, six years ago, a new concept in the awarding of complex and expensive government contracts was born. For years, officials in the Department of Public Works and Government Services had realized there were major problems in the selection of contractors, particularly for state-of-the-art projects involving information technology. Quite simply, the long and complex traditional process of Requests for Proposals, sealed bids and evaluation meant that even before the first floppy disk arrived, the program it carried had been outdistanced in the commercial marketplace. A new, more timely method of procurement was vital. That's when Francois Hubert, director of information systems procurement, hit on CPP.

"The fundamental issue in any federal bureaucracy is that we are often the gatekeepers of the status quo, big time" Hubert says, recalling life as it used to be in Canada. "The problem was connecting the real user in the system with the vendor. Before, as time progressed, as the vendor was building the system, the users' needs changed." But the project could not. That was before CPE

Solutions, Not Price

The concept of Common Purpose Procurement is pretty basic. Instead of the government or agency--the buyer--defining a problem, arriving at a solution, then bidding out the material or process that will fill the need as it existed at the time the bid was presented,the bidders are invited to solve a problem and come up with the solution. Unlike the former method where price is the ultimate touchstone of the winning bid, the solution--the most innovative, effective, timely and, almost incidentally, cost-effective solution--will win the contract. And because it is the vendor and the solution that are being bid, not the product, rapidly moving technology can replace older and outdated technology that may solve the same problem more quickly and, ultimately, more cheaply.

"We believe there have been cost savings of a factor of two-to-one," Hubert says with a smile.

But most who have experienced CPP firsthand believe that much more than cost savings is involved. …

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