Effective Communication between State
Procurement and Industry
Facilitator:
• Dean Stotler – Director, Government Support Services, Office
of Management and Budget for the State of Delaware
Panel:
• Gary Lambert – Assistant Secretary for the Operational
Services Division for the Commonwealth of Massachusetts
• Paul Campbell – Vice President, State Solutions,
UnitedHealthcare, Illinois
• Fred Springer, − NASPO Honorary Member and Partner at
Bryant Miller Olive, Florida
Effective Communication between State
Procurement and Industry
• Purpose: to help procurement officials and state
policy makers develop state-vendor communication
guidelines or policies in their respective states.
The paper does not recommend a particular approach
to one-on-one state-vendor communications; it
provides general observations and a framework for
analysis.
NASPO 2011 Survey:
 NASPO survey about state-vendor communication practices was
completed by 33 states, including the District of Columbia.
 The vast majority of states responding do not have statutory of regulatory
limitations on their ability to communicate with vendors prior to an RFP
 88% of all respondents deem that there are no limitations in their laws,
guidelines, or agency practices to their ability to communicate with
vendors prior to an RFP issuance
 Less than 1/3 of the responding states reported they take full advantage of
statutory or regulatory allowances for communication with vendors prior
to an RFP issuance
 61% of the responding states use one-on-ones/private meetings to
communicate with vendors
 82% of the states responding to the survey use public or open meeting
(including Vendors Fairs/Industry Fairs) to communicate with vendors pre
RFP
 RFIs and RFQs are used by 90% of the responding states to communicate
with vendors.
General
Information
Specific
The matrix below is designed to help procurement officials consider two of the most
important variables in the procurement process: timing of the communication and the
level of specificity regarding what information can or should be shared.
I. Testing Preliminary Ideas
II. Finalizing Sourcing Strategy
III. General Discovery
IV. Validating Sourcing Strategy
Decision to Source
Time
Release RFP
Key Policies & Considerations
Policies
- Assuring Integrity & Transparency
- Avoiding Unnecessary and Significant Appearance of Impropriety
- Preventing Unfair Competitive Advantage
Considerations
- Providing Adequate Public Notice & Proposal Response Time
- Not using Unduly Restrictive Specifications
- Issuing a Well Developed and Informative Solicitation that will ensure the
state gets the “Best Value”
- Gathering Data, rather than Providing Data
- Acquiring Specific Information, but Releasing only General Information
- Maintain Appropriate Confidentiality of Proprietary Vendor Information
- Early involvement of Procurement Officer
- Researching & Understanding Competitive Environment
- Are there key resources that could be monopolized by vendor with
early notice?
- Is there critical information that, if known, would provide a vendor with
an advantage?
Hypothetical 1
If a state official meets with vendor A, but not vendors B and C, and A wins the
competitive bid process, does that mean the official was biased toward vendor
A's solution?
Key Policies & Considerations
Policies
- Assuring Integrity & Transparency
- Avoiding Unnecessary and Significant Appearance of Impropriety
- Preventing Unfair Competitive Advantage
Considerations
- Providing Adequate Public Notice & Proposal Response Time
- Not using Unduly Restrictive Specifications
- Issuing a Well Developed and Informative Solicitation that will ensure the
state gets the “Best Value”
- Gathering Data, rather than Providing Data
- Acquiring Specific Information, but Releasing only General Information
- Maintain Appropriate Confidentiality of Proprietary Vendor Information
- Early involvement of Procurement Officer
- Researching & Understanding Competitive Environment
- Are there key resources that could be monopolized by vendor with
early notice?
- Is there critical information that, if known, would provide a vendor with
an advantage?
Hypothetical 2
Strategic Sourcing Initiative
The State of X is planning to launch a strategic sourcing initiative and plans to
issue an RFP in 6 months. Vendor A contacts the state and requests a
meeting. Vendor A is a consulting firm with experience in this area. The state
has not had discussions with any other vendors to date. The vendor would like
to ask the state a number of questions such as: savings goals; target dates,
scope of initiative (targeted sourcing categories, agencies involved, personnel
involved); etc. The vendor has led strategic sourcing efforts in 2 other states
and they have case studies describing their success. As they present their
experience in the other 2 states, the vendor plans to ask for feedback regarding
the approach Vendor A took in those states and comment on whether the same
approach would work in State X.
Key Policies & Considerations
Policies
- Assuring Integrity & Transparency
- Avoiding Unnecessary and Significant Appearance of Impropriety
- Preventing Unfair Competitive Advantage
Considerations
- Providing Adequate Public Notice & Proposal Response Time
- Not using Unduly Restrictive Specifications
- Issuing a Well Developed and Informative Solicitation that will ensure the
state gets the “Best Value”
- Gathering Data, rather than Providing Data
- Acquiring Specific Information, but Releasing only General Information
- Maintain Appropriate Confidentiality of Proprietary Vendor Information
- Early involvement of Procurement Officer
- Researching & Understanding Competitive Environment
- Are there key resources that could be monopolized by vendor with
early notice?
- Is there critical information that, if known, would provide a vendor with
an advantage?
Hypothetical 3
Student Housing Facility
Land-locked college has an urgent need for additional student housing in close
proximity to the main campus but does not own any suitable real property.
College plans to issue a Request for Proposals to acquire the property for, and
the design and construction of, the student housing. The RFP asks offerors to
identify the proposed building site and identifies proximity of the site to
campus as a major evaluation factor. Before the RFP is issued, an agency official
mentions the agency’s plan to a real estate developer – ACME Developers, Inc. in hopes of getting some advice on how to do it right. Any problems with this
inquiry?
Hypothetical 3
Student Housing Facility
SAME SCENARIO / ADDITIONAL FACT:
The winning proposal was submitted by ACME Developers, Inc., which acquired
options to purchase on three of the only four undeveloped lots in close
proximity to the college.
Does that facts provide a different perspective on the propriety of the presolicitation exchange? Did the advanced information provide ACME an unfair
opportunity to secure purchase options on the limited suitable property?
Key Policies & Considerations
Policies
- Assuring Integrity & Transparency
- Avoiding Unnecessary and Significant Appearance of Impropriety
- Preventing Unfair Competitive Advantage
Considerations
- Providing Adequate Public Notice & Proposal Response Time
- Not using Unduly Restrictive Specifications
- Issuing a Well Developed and Informative Solicitation that will ensure the
state gets the “Best Value”
- Gathering Data, rather than Providing Data
- Acquiring Specific Information, but Releasing only General Information
- Maintain Appropriate Confidentiality of Proprietary Vendor Information
- Early involvement of Procurement Officer
- Researching & Understanding Competitive Environment
- Are there key resources that could be monopolized by vendor with
early notice?
- Is there critical information that, if known, would provide a vendor with
an advantage?
Hypothetical 4
Application Mgmt Svcs for ERP System
BASIC FACTS: Under direct oversight of the State’s Chief Information Officer
(CIO), State’s central data center issues Request for Proposals to acquire critical
services regarding optimization and management of the State’s centralized
accounting, payroll, procurement, and human resources computer system. The
contract is worth 10 million annually. Given the State’s lack of capabilities and
the different industry offerings for this type of service, the State elects not to
include detailed specifications; rather, the State provides detailed information
regarding its existing staff and the configuration of its existing systems. Offerors
are expected to explain their proposed services and how they will benefit the
State.
QUESTIONS:
1. The CIO participated in drafting the solicitation and will be serving as an
evaluator. Three days before solicitation is issued, CIO has drinks with sales
team of prominent national provider of AMS at a popular downtown bar.
The solicitation is not mentioned. OK or Not?
Hypothetical 4
Application Mgmt Svcs for ERP System
2. Basic Facts, but the CIO has not yet started to draft the solicitation, though
she knows she will be serving as an evaluator. Six months before the solicitation
is issued, the CIO flies to Chicago to attend a national conference of State CIOs.
In the hotel lobby, CIO has drinks with sales team of prominent National
Provider of AMS.
2.a. – CIO mentions her interest in acquiring AMS services, but offers
no specifics. In hopes of getting good advice on how to best structure the RFP,
the CIO invites the vendor to give her an overview of the services they provides
and any suggestions they have regarding the solicitation. OK or Not?
2.b. – Disappointed in the usefulness of the general information
provided by the vendor, and hoping to get something more, the CIO invites the
vendor to email her a draft of their standard scope of work for such projects,
intending to use it as a resource for drafting the solicitation. Vendor sends the
information. OK or Not?
Hypothetical 4
Application Mgmt Svcs for ERP System
2.c. – Alternate facts: Disappointed in the usefulness of the general
information provided by the vendor, and hoping to get something more, the
CIO provides the vendor with a thorough review of her vision for the project,
including details regarding what services she believes will be most important
and what qualifications she expects the successful vendor to have. OK or Not?
i. Shortly after the conference, National Provider’s regional
manager and lobbyist – now knowing of the upcoming solicitation – begins (a)
pitching their services to the Governor’s office and a key deputy CIO, (b)
negotiating with a local head hunter for assistance recruiting local staff, and (c)
acquiring option on lease of office space adjacent to CIO’s office.
ii. Cognizant of her communication with Nat’l Provider, CIO
returns from conference and informs Procurement Office of exchange, which –
in consultation with CIO – immediately advertises and issues a Request for
Information regarding the State’s proposed procurement of Application
Management Svcs.
Key Policies & Considerations
Policies
- Assuring Integrity & Transparency
- Avoiding Unnecessary and Significant Appearance of Impropriety
- Preventing Unfair Competitive Advantage
Considerations
- Providing Adequate Public Notice & Proposal Response Time
- Not using Unduly Restrictive Specifications
- Issuing a Well Developed and Informative Solicitation that will ensure the
state gets the “Best Value”
- Gathering Data, rather than Providing Data
- Acquiring Specific Information, but Releasing only General Information
- Maintain Appropriate Confidentiality of Proprietary Vendor Information
- Early involvement of Procurement Officer
- Researching & Understanding Competitive Environment
- Are there key resources that could be monopolized by vendor with
early notice?
- Is there critical information that, if known, would provide a vendor with
an advantage?
Effective Communication between State Procurement and Industry
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This NASPO paper:
Summarized certain relevant findings from a NASPO 2011 survey of statevendor communication practices.
Examined the federal model that has existed since 1997 under the Federal
Acquisition Requirements (FAR).
Provided a summary of the laws and policies of 9 states that have policies or
regulations that impact one-on-one state-vendor communications.
Provided an overview of the regulatory requirements on vendors and
lobbyists involved in one-on-one meetings with state officials.
Discussed other pre-RFP communication tools that were addressed in the
survey.
Offered a framework to help state officials analyze specific situations in their
own state.
Provided conclusions and some recommendations to help states form their
own policies.
Conclusions and Recommendations:
•
The issue of effective communications between industry representatives and state officials
continues to warrant more education and increased awareness. NASPO believes that
ambiguity surrounding the rules for one-on-one communication between states and vendors
will only discourage communication and prevent constructive dialogue.
•
If it has been determined that the state will benefit from vendor expertise, NASPO encourages
one-on-one meetings with vendors in a manner that avoids creating an unfair competitive
advantage. “[…]communications should always be open to all possible vendors.[…]All
communications should avoid the appearance of favoritism.” (2008 NASPO Practical Guide)
•
NASPO recommends that Chief Procurement Officers:
 Develop guidelines for vendor input into the process of determining agencies’ needs or
preparing initial specifications so that the agencies and the central procurement office
may obtain the benefits of vendor expertise without creating unfair bias or conflict of
interest.
 Consider reaching out to their peers and share best practices regarding gaining vendor
expertise when developing their strategic sourcing strategies
 Consider the issues raised in this white paper, as each state engages in their own policy
development
Questions to Ask Yourself
- Did you inform the procurement staff about the contact and the information
exchanged?
- Did you maintain any publicly available record of the meeting, e.g., calendar
entry?
- Does your solicitation include all the information needed to foster robust
competition? Does it include all the information provided via any early
exchanges?
- Did early access to information provide a competitive advantage, and if so,
was that advantage unfair?
- Were potential vendors provided enough time to respond to solicitation
such that you’ve eliminated any unfair competitive advantage arising from
another vendor’s early access to information?
Effective Communication between
State Procurement and Industry
• This White Paper was prepared under the
guidance of NASPO’s State Vendor
Communication Work Group.
• You can access the paper at:
http://www.naspo.org/content.cfm/id/briefs_a
nd_whitepapers