Survey: Agencies lag in procurement practices

Government is lagging behind best procurement practices in private industry, according to a new survey by a Washington-based consulting firm.

While companies have long embraced strategic sourcing, or bulk buying, as a way to leverage buying power and save money, only select government agencies have embraced the strategy. Similarly, agencies have been slow to adopt interagency contracts, strategic partnerships with suppliers, and awards based on good performance, all of which can save money and improve the quality of purchases, said Bruce McConnell, president of Government Futures, which conducted the survey.

Unlike other reports that have reached similar conclusions, this survey also asked 100 government and industry leaders to predict the future. Respondents said they believed that by 2012, most agencies would rely on close relationships with select buyers for commodity purchases and that at least half of federal agencies would have adopted strategic sourcing techniques.

If these predictions are correct, federal procurement practices will start to more closely resemble the commercial practices of the 1990s in about five years.

In many ways, that's too late, says McConnell. By 2012, there will likely be newer best practices, he says.

McConnell says Government Futures is starting to look at how agencies could move more quickly to adopt best practices. One factor holding them back is current laws, he says.

Through Government Futures' Web site, McConnell plans to launch a detailed discussion of potential statutory changes for the new Congress. He says recommended changes will include regulations to make it easier to establish public-private partnerships, interagency collaboration and incentives in contracts such as rewards for good work and punishments for bad work. Only about 2 percent of government contracts currently use incentives, he says.

Transparency in contracting can help ensure that public-private partnerships don't develop a dark side, McConnell said. When the public and oversight community can track where money is going and to whom, the risk of illegal or unethical activity is reduced, he said.

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