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Partnering In The Public Sector

Author(s):

John L. Balentine, C.P.M.
John L. Balentine, C.P.M., Purchasing And Contracts Administrator Washoe County Purchasing, Reno, NV 89520, 702/328-2280

81st Annual International Conference Proceedings - 1996 - Chicago, IL

Abstract. Purchasing in the public sector is thoroughly circumscribed by law in order to "guard the public trust". However, partnering can be accomplished with resultant benefits for all involved: the governmental (public) entity; the supplier(s); and most important, the citizen taxpayers. While initially difficult and complex to accomplish, the viability of such partnerships has been adequately demonstrated, particularly in view of ever tightening budgets, ever more public scrutiny, and the prevailing attitude of "do more with less". The information that follows is a "how-to" of public sector partnering. It includes the analysis necessary prior to embarking on the journey, some of the obstacles and pitfalls along the way, and finally the on-going monitoring and fine-tuning required to ensure the continued viability of the partnership.

Background. Since public sector purchasing is so thoroughly circumscribed by law in order to "guard the public trust", many practitioners in the public sector assume that partnership arrangements are not possible. Annual budgets; strict bidding requirements; open access; buy American and buy local preferences; all combine to make the concept of partnerships in the public sector seem like "Mission Impossible".

Couple all of that with a very conservative mind-set at the highest management levels that extends to the elected officials in the governing arena and there-in lies an additional barrier to the implementation of partnerships. As a result, the public sector has been glacially slow in moving toward the establishment of partnership arrangements.

However, some progressive governmental organizations have broached the issue and established viable partnerships for a variety of goods and/or services.

The Opportunity. In order to identify a potential partnership opportunity an evaluation of the goods and services purchased must be done. This need not be an extensive, expensive and time-consuming project. Once one or several potential partnering "opportunities" are identified a series of questions must be answered relative to each:

  • Are longer contracts legal for this commodity/service?
  • Are the departments, divisions, agencies and programs effected desirous of a longer relationship?
  • Are the current and/or potential suppliers capable and willing to partner?
  • Is the political climate suitable for a partnership for the particular commodity or service contemplated?
  • What are the specific advantages of a partnership for the commodity or service identified?
  • What are the disadvantages of such a relationship as identified?
  • Who exactly will need to participate in the process?
  • Finally and Most Important:

  • What is The Vision of how the partnership will operate?

Educate. A multifaceted educational effort will need to be undertaken. One facet will encompass the managerial issues. Another facet may involve any "political" issues. Yet another facet must address any accounting changes that will need to be made to accommodate a longer contract.

A fully developed educational program will be both formal and informal in nature, encompassing each of the necessary facets. Formal presentations may require formally scheduled meetings, visual aids, hand-outs, posters, flyers, e-mail as well as any other avenue(s) available.

Informal education may involve the use of the organizations "grapevine(s)", drop-in visits, in-hallway conferences, e-mail, attitudes questionnaire, articles in the organization's employee news letter(s) and/or other internal publication(s).

Either way, formally or informally, it is important to clearly communicate "The Vision" of the Partnership. A fuzzy vision will yield unconvincing results, whereas a clear, sharp vision will yield positive results. The goal of the education and a result of "The Vision" is the answer to the question: "What's in it for us?". When that question is adequately answered for all potential participants the partnership is well underway.

Establish The Partnership. Depending on the good(s) and/or service(s) selected; the laws, ordinances, policies and procedures the entity operates under; the availability of qualified potential partners; and the political considerations, the methodology to use to establish the partnership will become obvious. It may be a Formal Bid, a Request for Proposal, some form of negotiations, or a combination thereof.

Again, "The Vision" must be communicated clearly, concisely and accurately to the potential partner(s). The three elements of a partnership must be clearly defined as they relate to "The Vision":

  • The Principles
  • The Specifications and
  • The Standards

The appraisal/feed back mechanism must be delineated and the evaluation criteria defined.

How successful any program will be is, in large part, determined by the thoroughness of the evaluation of the competition as well as the effectiveness of any negotiations conducted. Any evaluation must be on how close the competition comes to sharing "The Vision". All negotiations are targeted to "The Vision" so that the finalized partnership is almost, if not an exact image of "The Vision", with refinements and improvements in the details.

Do not rush this stage of the process. Quite often top management wants the new program in place... elections may be coming up... and immense pressure is exerted to "hurry up and get it done!" Stick to the time schedule. Be thorough in the evaluation and any negotiations. The dividends are a long and smooth running partnership with few and minimal problems.

At this point the actual construction of the partnership becomes crucial. How the partnership is structured, with the goals and objectives of both partners clearly focused on the critical success factors that have been mutually established, will ensure that "The Vision" becomes the reality.

Implement. The implementation of the partnership will be a busy and tumultuous time. The appraisal/feed back mechanism will be fully tested. That system needs to be as unobstructed and direct as possible on both sides of the partnership. It needs to be two-way communication, with the focal point in the public entities' Purchasing Department. Such an informational appraisal/feed back mechanism ensures the partnership's success by enabling open and rapid communications both ways: from users to supplier and supplier to users. Since the focal point is in the Purchasing Department they will be aware of all developments, problems and solutions in a timely manner.

As time progresses and each partner becomes more comfortable with the new arrangements things will smooth out, problems should become less in number and less vexing. It now becomes very tempting to "let it alone"... to allow the partnership to "run itself". Such an attitude on the part of either or both partners spells ruin for the partnership.

Monitor. As conditions, situations and attitudes change, the partnership too must change, to remain viable. The Purchasing Department must be consistently and constantly vigilant with the administration of the partnership to facilitate the necessary changes. The monitoring function, accomplished through the appraisal/feed back mechanism facilitates the accommodations to change and the "fine tuning" necessary to handle problems, changing circumstances and the inevitable questions that will arise over the course of time.

Conclusion.
Partnering in the public sector can work well for all concerned and involved. However, thoroughness, a commitment to the goals, and a clear and concise picture of "The Vision" by all is an absolute requirement.

To review:

  • Thorough research into the governing laws and policies must be done to insure a lawful basis for the partnership.
  • All major participants to be effected by the proposed partnership should be consulted early in the process to ensure a viable program.
  • A clear, concise and detailed "Vision" of the partnership must be developed and become the focal point of the partnership from planning, through implementation and throughout the life of the partnership.
  • A formal and informal educational program must be undertaken so that all involved with the potential partnership will fully understand and support "The Vision" of the arrangement.
  • An unobstructed and direct information appraisal/feed back system must be in place upon the partnership's implementation and remain effective throughout the duration of the partnership.
  • All involved with the partnership must be sufficiently empowered to make "The Vision" work.

If the foregoing is faithfully followed, partnerships can be a viable option to any public sector entity in these critical fiscal times, with rewarding results. Thus, as professional purchasers in the employ of the public sector, we can "guard the public trust" while using the tool of partnering.

Epilog. The State of Nevada and Washoe County within the state have both implemented multiple partnership arrangements. The oldest, with the Xerox Corporation for a "cost-per-copy" system of copy machine use, is about to turn eight years old. Other partnerships (i.e. with Boise Cascade Corporation for office supplies; Stremmel Auctions for the disposal of surplus property and with MCI Communications for long distance telecommunications services) are in the three to six years range. Other cities, counties, school districts and special districts within the state have joined on with the state and with Washoe County in selected partnerships and continue to reap the benefits of these arrangements.


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