Original article published on Linkedin by Dustin Lanier, CPPO
There is a balance in public procurement between requirements that prescribe “what” is needed versus asking the vendor to describe “how” they would solve the problem.
In my recent interview with Aaron Carter from the University of Illinois, he put forward the comment that when you are restricted in what you are taking to market, you can end up "looking for tractors, not for how to best plow the field."
This is a great analogy, as it aligns with a key inflection point in public procurement organizations.
When buyers begin in a purchasing roles, it is standard practice to cut their teeth on specification heavy bids (e.g., Invitations to Bid). In these procurement events, the request is framed in a way that commoditizes the need (good or service) such that the only outstanding question is price.
Picking up Aaron's analogy: specifications would be drawn up to acquire a tractor with details of required size, shape, function, etc., and vendors are asked to provide details of the tractor they are offering that meets specifications and the cost of the tractor.
Once the vendors’ responses are received and determined to be responsive and responsible, the expectation is to award to the lowest bidder. This is a pattern that is repeated countless times each day.
When buyers are asked to draft competitive proposals (e.g., Requests for Proposal), the dynamic changes. It is no longer simply specifications and price; now other factors are weighted and considered. While price is important, it is now one of many weighted criteria the buyer may need to evaluate including experience, references, project staffing, implementation approach, future direction, value added services, and so on.
There is a subtle, but important, mindset shift that must happen in the perspective of the buyer as they transition. There is a critical need for system thinking to drive a consultative relationship with the business-side staff, to truly understand what approach should be taken to utilize this “best value” approach to engage the market and ensure the goals and objectives of the business are met.
If we want to be open to new ideas and disruptive innovations from the market, before we begin writing the endless series of requirements, we need first to understand:
Establishing this framework first will enable a balance between detailed and restrictive requirements needed to make fair comparisons, and also providing flexibility for vendors to offer innovative solutions that meet the business’s goals and objectives.
There is no magic formula on exactly the proportion of how many requirements should prescribe the “what” versus asking the vendor to describe “how” they would solve the problem. Both the art and the science of finding the balance between "what" and "how" this work is to engage in consultative discovery, and create the right sourcing model.
Learning this consultative skill is part of the competency development procurement organizations need to provide as buyers transition into more complex procurements.
To complete Aaron's analogy of the tractor and the field, we should ask, “How do we craft a solicitation to capture responses that best meet the business needs?”
If the business need is the outcome in the field, not the tool of the tractor, writing detailed specifications for a tractor would not allow for a plowing service, an autonomous tractor vendor or a turnkey crop management service to put forward an innovative solution that meets the business needs.
If those scenarios would serve the business owner more than simply purchasing a tractor, then the buyer should employ a discovery approach to uncover that, and work with the business to present alternative approaches to the market. Governance reviewers of that solicitation should also consider the business need for innovation when completing their reviews.
