A fundamental goal of any public procurement process is to obtain the "best value" for the public agency — in other words, to obtain high-quality commodities and services at a reasonable cost and under terms that meet a government entity's needs. When pursuing strategic sourcing, today's procurement professionals often depend on suppliers to identify and present creative solutions that meet state and local governments' needs and that require minimum upfront investment.

But do pre-solicitation meetings and discussions with vendors — critical to creative sourcing — have the "appearance of impropriety," or could they be seen as favoritism for a particular company? How do we promote such meetings while helping public officials maintain the integrity of the procurement process? Moreover, how do we protect public officials who are trying to do the right thing by striving to obtain best value? This article will seek to answer those questions and to suggest a simple metric for fair and open competition.

Current tough economic times present an even more urgent need to embrace strategic approaches. "The budget crisis is so severe that it's now possible to do some things that everyone knew were smart but couldn't get done because of political considerations," John Thomasian, director of the Center for Best Practices at the National Governors Association, told USA Today in March. Getting the most value from the supplier community while preserving procurement integrity is one such strategy.

The public trust

Just as important as the quest for best value is the need to protect the public trust and to fulfill public policy objectives.¹ Because federal, state and local government procurements use public funds, they must be conducted with integrity, openness and fairness.² Here is how this goal is articulated at the Federal level: "An essential consideration in every aspect of the [acquisition] System is maintaining the public's trust. Not only must the System have integrity, but the actions of each member of the [acquisition] Team must reflect integrity, fairness, and openness…Fairness and openness require open communication among Team members, internal and external customers, and the public."³

The "open" nature of procurement processes is a critical feature of public acquisition.⁴ Public entities throughout the United States have "freedom of information" and "public records" laws that provide access to government-held information, and these laws are routinely applied — particularly at the State level — to maximize public access to contract information.⁵ Public agencies also have an affirmative obligation to share information with potential vendors, prior to award, to ensure a fair procurement process. This obligation includes providing "clear, adequate, and sufficiently definite information about public needs to allow offerors to enter the public acquisition on an equal basis."⁶

Benefits of market research

For state and local governments, as for any sophisticated buyer, market research is a key component of communicating openly and clearly with potential vendors. All states and local governments strive to research technology alternatives and best practices thoroughly before issuing a solicitation. This research is particularly important when a state or local government is acquiring complex supplies or services. Unfortunately, public officials often have limited resources to conduct this research or, in some cases, lack the technical expertise needed to compare and discern the sometimes subtle differences among competing products and services.

As a result, communication with potential vendors is an essential part of the market research process. This communication often occurs through written exchanges of information (e.g., submission of marketing materials or responses to Requests for Information), but face-to-face meetings between public agencies and potential vendors are also common. Most state and local officials are comfortable with these exchanges of information, as they understand their critical importance to the procurement process.

But occasionally state and local officials decline one-on-one meetings with vendors, expressing concern about perceptions of unfair bias or conflicts of interest that may arise from such meetings. They question, for example, if a state official meets with vendor A, but not other vendors, does that mean the official is biased toward vendor A's solution? Similarly, if a local government official attends a demonstration of vendor B's technology while developing a Request for Proposal (RFP), is there a conflict of interest?

This concern can have a chilling effect on communication with vendors. In response to a request for a meeting prior to release of an RFP, one state official recently wrote: "If I meet with them even as an introductory meeting, then I assume they understand they will be precluded from bidding on any project we bid out the next six months." Is this level of concern by state and local officials warranted? We think clearly it is not.

Perception versus reality

It is ridiculous to think that government officials are so easily manipulated or influenced that a simple meeting with an industry representative could somehow hijack the entire competitive bid process. The issue is mostly one of perception, not reality. But as we all know, perception is reality where politics is concerned.

At the federal level, this issue was addressed during the 1996 revision of Federal Acquisition Regulation (FAR) Part 15, "Contracting by Negotiation." Balancing the dual goals of "openness" and "integrity" in the procurement process, the FAR drafters decided to specifically encourage pre-RFP meetings and exchanges of information between public officials and potential vendors (see Federal-level procurement guidelines sidebar, page 20).

In fact, the federal rule not only encourages early exchanges of information with vendors but also specifically identifies "one-on-one meetings" as an appropriate means of accomplishing these exchanges. There are important caveats in the rule to ensure fair treatment of all vendors and to make sure that procurement integrity rules are followed. There is also a helpful, bright-line test on when these open exchanges should stop (i.e., "After release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors" — emphasis added.)