Procurement changes appear likely! Government contractors should get involved
by Mary Scott Nabers
CEO of Strategic Partnerships, Inc.
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The following is an overview of how the new rules might work.
Companies that provide livable wages, health insurance, paid leave, insurance and employer-funded retirement plans for employees would be given extra credit in bid competitions. The data gathered would result in a social scoring of some type and the data would then be entered into a contracting database of all potential bidders.
The proposed new standards are aimed at providing incentives for contractors to:
- Abide by good workforce practices;
- Create good jobs with benefits for middle class workers, and
- Help the government ensure that workers are insured and protected.
Proponents of the social scoring concept argue that since tax dollars are being used to pay for an increasing number of underpaid, non-insured workers being added to Medicaid rolls, government contracts should be awarded to firms that don’t contribute to the problem. Additionally, proponents say that poorly paid contract employees often deliver poor quality work at the expense of taxpayers. One last point being made is that contractors guilty of violating workplace, tax or other laws should not be rewarded with government contracts.
Supporters of this initiative don’t limit their efforts to rewarding bidders who provide workers with livable wages, health, safety and retirement benefits; they also seek reforms that would make contractors' legal compliance records open to public scrutiny.
Some of the proposed changes may be inevitable and others may be good but there is a definite need for government contractors to weigh in on the issue. There are predictions that some of the reforms could be put into place later this year, so employer input is needed now.
Higher education procurement, too, could face change. A recent report by the American Association of State Colleges and Universities and the National Association of Educational Procurement shows that there is a growing body of support for procurement changes.
Most state-supported colleges and universities are currently required to use state contracting procedure when announcing procurements. In the multi-billion-dollar purchasing departments of higher education, procurement officials say there is much room for streamlining purchasing operations. They believe procurement changes would results in a savings of both time and money.
Among recommendations for states regarding higher education procurement that resulted from the survey:
- Provide greater autonomy to university systems and institutions regarding procurement policy;
- Review and, if warranted, increase the minimum dollar threshold for purchases requiring state approval, as well as adjust minimum thresholds involving formal competitive (sealed) bids;
- Make participation in state purchasing contracts voluntary; and
- Allow institutions to participate in group-purchasing consortia.
The University of North Texas recently surveyed 35 Texas public colleges and universities and found that together they spend $6.5 million per year just preparing and filing state reports. As these institutions face budget shortfalls and become more aggressive about changing what they consider to be somewhat antiquated procurement processes, change is probably inevitable.
Change is not always bad and there is not enough known yet about the proposed new rules, but government is a participatory process and all parties should be involved. Government contractors should weigh in on the suggested changes and should do so rather quickly.
