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Facilitator:

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 :

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  1. 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

  2. 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.

  3. 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.

  4. 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. Specific Information General Time Decision to Source Release RFP

  5. 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?

  6. 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?

  7. 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?

  8. Hypothetical 2Strategic 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.

  9. 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?

  10. Hypothetical 3Student 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?

  11. Hypothetical 3Student 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 pre-solicitation exchange? Did the advanced information provide ACME an unfair opportunity to secure purchase options on the limited suitable property?

  12. 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?

  13. Hypothetical 4Application MgmtSvcs 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: • 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?

  14. Hypothetical 4Application MgmtSvcs 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?

  15. Hypothetical 4Application MgmtSvcs 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.

  16. 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?

  17. Effective Communication between State Procurement and Industry This NASPO paper: • Summarized certain relevant findings from a NASPO 2011 survey of state-vendor 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.

  18. 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

  19. 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?

  20. 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_and_whitepapers

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