Industry: Municipal

Legislation passed this fall makes it possible for local government and school districts in New Jersey to use electronic procurement technology in their procurement activities. 

Read on for a quick primer on Assembly Bill 3112, and what it means for your procurement team! 

The Basics of A-3112

Who is impacted: New Jersey organizations subject to “Local Public Contracts Law” and “Public School Contracts Law.” This does not impact those subject to “State College Contracts Law.” 

What changes: Procurement teams are now authorized to use electronic procurement technologies for the procurement of goods, services, public works construction, and sale of surplus personal and real property. 

Procurement teams must continue to advertise projects in their local newspapers, but can also post and receive vendor submissions online. 

Why: eProcurement technology makes it easier to carry out the procurement process while maintaining the integrity of the process and decreasing the risk of litigation. The assembly’s analysis found that while there is an upfront cost to implementing eProcurement, in the long run local costs are predicted to decrease as a result. 

Three key benefits of eProcurement

Using eProcurement technology to post bid and RFP opportunities online and receive submissions has many benefits. 

Efficiency

Bringing the procurement process online frees up your procurement team from routine administrative tasks such as: 

• Receiving and checking paper submissions
• Scanning in documents
• Creating Excel scorecards and copying-and-pasting scores

The process is easier for vendors, too, giving them one online location to view all project information (including any addenda or Q&A responses), then make their submission online at their convenience.

With less paperwork, procurement teams are able to run bid and RFP projects up to twice as fast. 

Consistency and standardization 

Centralizing the bid and RFP process brings all of your organization’s bids and RFPs into one central location. This makes it easy to see where you’re at, including the progress of all active projects, and what’s coming up next. 

You can also create bid and RFP templates to enforce a standard project set-up across all buyers, ensuring that all the compliance boxes are checked. 

Easy reporting

By managing the bid and RFP process online, you immediately eliminate the challenges of data storage and accessibility that comes along with paper files. All vendor records, proposal information, and scoring summaries are captured in one online platform. It’s easy to customize and export reports at the click of a button. 

Procurement has often gotten a bad rap as solely a cost-control or compliance function. However, the team at Service New Brunswick (SNB) proves that procurement can have a meaningful impact beyond the bottom line. The crown corporation, which provides direct public services for the New Brunswick government, is leading the field in implementing value-based procurement, with big benefits for government and citizens.

Value-based procurement refers to a procurement approach which prioritizes overall value over cost. It is becoming the new standard in healthcare procurement, supporting the attainment of better health outcomes—and signalling a departure from healthcare’s sometimes-stringent focus on cost reduction. 

“We’re starting to have more conversations about value-based procurement, whereby the results are based on outcomes,” says Renée Laforest, vice president of SNB’s Finance and Strategic Procurement Division, speaking to Supply Chain Digital. “For example, when we purchase insulin pumps for diabetes clients, we’ll carefully look at the needs of our clients and ensure we meet their demands rather than automatically opting for the cheapest pump.” 

This approach is representative of a wider shift towards best value procurement across the public sector. The Governing Institute’s 2019 State Procurement report found that all but one of 28 states surveyed rank best value above lowest price. Data from over 200 public sector organizations on the Bonfire platform echoes the finding: the 2018 State of the RFP report found that the lowest-priced proposal won in only 10% of all RFPs, down from 16% from 2016. 

Collaboration = a prerequisite to value-based procurement 

Implementing a value-based procurement approach is not just a matter of changing the wording on an RFP. It requires greater coordination and collaboration with stakeholders right from the start. 

“We really consider our clients’ needs and requirements when procuring goods and services for them,“ notes Laforest. “It’s important that we have these in-depth conversations, particularly when it comes to services. If you’re buying a service you may have more complex needs and requirements, so this dialogue is critical.” 

Gone are the days of procurement professionals working in isolation from end users. In a value-based procurement model, it’s crucial to include end-users in the decision-making to better understand usability and the desired outcomes of the product or service. 

Less paperwork enables greater value-add 

The traditional procurement process, with its heavy reliance on paper and Excel, would be prohibitive to the type of collaboration required by value-based procurement. That’s why many teams leverage sourcing technology to automate the administration of the RFP process, thereby freeing procurement staff to focus on facilitating close collaboration in the decision-making process. 

Cloud-based eSourcing platforms also provides the advantage of one online location for stakeholders to come together to collaborate on the RFP evaluation. Service New Brunswick uses Bonfire Strategic Sourcing Platform to manage their RFP process. 

“Vendors use it to submit their proposals, and we do all our evaluations within the tool. It’s all automated, and all our stakeholders have found it beneficial,” says Laforest. 

RELATED: How sourcing software makes it easier to manage best value procurement

Procurement ascends as a strategic partner

The SNB procurement team’s success proves that procurement teams can be a crucial partner in accomplishing their organization’s goals. Leveraging procurement technology in intelligent ways helps teams break out of the cycle of rushing requisitions out the door, giving them the capacity and visibility to work strategically. 

Ultimately, this helps procurement shed the historic reputation as a penny-pincher and rule-enforcer, and instead become a partner in delivering outcomes. 

As Laforest puts it, “I want to really add value for our clients so that they don’t see procurement as a roadblock but rather see it as a value-adding function.”

For more on how procurement technology helps teams grow their strategic impact, read the GovTech Guide Understanding Procurement Technology and How to Use It. 

We’re sitting down with procurement professionals in different organizations to hear about how they approach their work, how Bonfire fits into their day-to-day, and the resources and tools that keep them on track.

This month’s guest is Joel Neaveill, Director of Purchasing at Louisville Metro Government in Louisville, Kentucky. Joel and his team are responsible for the management of over 1,100 contracts that assist in the programmatic and operational functions of the city. Needless to say, he gets things done! Here’s more on how he does it.

First of all, tell us a bit about your background and how you got to your current role?

I started my role with the city in January 2016. Prior to that I spent 16 years working for the Commonwealth of Kentucky in various program development and policy roles. I was asked to come work for the city to help provide some improvements to the procurement process.

What’s your primary goal in your role?

My goal when I came here was to create a procurement program that is one with integrity, one with transparency, a trusted program, and one that makes sense to the common user.

In procurement in general, I’ve found that there is lack of knowledge of what the processes really are. We follow our state law, our local ordinance, and we also create policy — all of those have to make sense. What we try to do is make sense of things that aren’t written to make sense in layman’s terms. What I hope to do over the course of my time here is to demystify the process — not only to employees who are part of the process, but also externally to our vendors. We need to be the experts on that process so we can advise others.

How do you start your day?

Coffee. Then email.

My role is two-sided, overseeing purchasing and accounts payable; on the purchasing side, I find myself going to Bonfire first to see what new vendors have registered, what questions have been submitted, what activity we’re seeing on which projects, and if there have been any submissions overnight.

That’s kind of a cool thing about Bonfire — it used to be that projects would have a closing time of, let’s say, 3 o’clock, and the buyers would be listening for the door down the hall, and inevitably there would be someone coming in at the last minute to do the old ‘chu-chunk’ timestamp, and put it in the bid box. We don’t have people doing that anymore — it’s fantastic. From the comfort of their home, vendors can submit a response.

So I start the day by looking at the activity that’s happened, especially if there are any higher-profile bids or projects that have seen any activity.

How is that different now, compared to when you began your role?

When I joined, from day to day, if anyone asked me where a particular bid was, or who the buyer was, or what the status of any one bid was, I could not tell them, because I had no formal way of tracking that. I started looking at what available tools were out there for us.

I wondered, do we create our own, do we have the expertise to do that? I learned pretty quickly that we do not. From a manager’s perspective, I needed to get a handle on how to manage the workflow.

What publications/resources do you turn to for industry info?

My background is not procurement, but I’m always trying to learn more about the thing I’m focused on, so for the last two years I’ve just tried to immerse myself in everything procurement.

NIGP, the national institute for public procurement, has a daily feed of purchase issues and questions that are being raised across the country. So they might say, ‘hey has anyone done an RFP for salt trucks?’ or ‘how do you structure a public/private partnership on RFPs?’ People help to step in and advise on solutions to particular issues. The NIGP forums, publications, and certification process — I am completely absorbing these like a sponge.

I also read a lot of the publications of the GFOA – the Government Finance Officers Association. And whenever an issue comes up, I always go back to our law — I always go back to ask, what is the governing statute, what is the law, how is this issue framed within the context of the governing law? I have those bookmarked in my browser.

How do you stay organized?

One thing that helps is being able to compartmentalize priorities and know what can and cannot be delegated. If you can find tools that help you do that, and they’re not too incredibly expensive — make the business case to obtain those tools.

Bonfire is one of the tools that your team has implemented. What has it brought to your procurement process?

There’s consistency of message. There is assurance that the platform we are using is consistent to our end users, and there is more communication between our evaluators and our buyers. That’s one of the best things — there is more communication about the specifics of each project.

As a manager, I can go in to review anyone’s work at any time. It allows me to let them know that I am watching for consistency and watching to ensure our policies are applied across all of our projects. It’s an invaluable tool from a management perspective.

There’s also more teamwork among buyers. Every week, there’s a standing meeting and everyone goes through Bonfire to look at the projects in various stages — where we are at, who we are waiting on, what’s next?

When I first got here, it seemed as though there was a very hierarchical structure — if you had a question, you went to the purchasing manager. Now, they’re asking each other, ‘hey, how did you handle that?’ and ‘how did you set this one up?’ In the end, we need to be the experts on how to get the procurement completed and advising the departments on the best way to do that. The more we learn from each other, the better we can serve those departments in getting their needs accomplished.

Do you have any advice to offer about a career in procurement?

Oftentimes, the longer you work in government, you tend to get jaded — either by the process, or people’s attitudes. Especially in today’s environment, there are people who look at government and their functions as unnecessary or excessive. It is an uphill battle always to defend your profession.

What I have kept in the back of my mind, in my experiences throughout 18 years of service, is that the vast majority of people that are in public service are good people who are trying to do the right thing. We may argue about the way in which we get things done. But in general, no matter what side of the aisle you may be on, everybody is trying to do the right thing.

We can’t look at our functions through the lens of a critic, thinking that people have the worst intentions. We have to put policies in place to prevent those things, but not at the expense of those that are trying to do the right thing. I keep that in mind every day of my work.

Read more stories from real procurement teams using Bonfire.