5 Procurement Methods Being Disrupted by Data-Driven Online Platforms

The landscape of government procurement is changing rapidly, pushing both the public and private sectors to adapt quickly or be left behind. The influence of big data and analytical technologies is greatly impacting how local, state, and even federal agencies buy, while also changing the way vendors sell to the government. Here are 5 processes currently being affected:

Request for quote (RFQ)

RFQs, or informal quotes, are used by public purchasing teams to obtain the required 3 quotes mandated by law when procuring a product or service below their request for process (RFP) threshold. Buyers also use RFQs to gather delivery logistics and other information for planning purposes. RFQs are gaining in popularity due to the recent rise of RFP thresholds, meaning less procurement is being done through the often time-consuming and resource-intensive formal bidding process. While RFQs can still be marred by communication delays and other slowdowns between buyers and vendors, many agencies are filling the gaps with supplemental online quoting tools, such as GovQuote, that streamline the process.

Request for proposal (RFP)

Government agencies issue RFPs when they need to purchase a particular product or service that matches certain specifications, such as a large order of laptop computers for a school. The bidding process is made public to ensure fairness and reduce costs through vendor competition. Traditional proposals can take as long as weeks or even months to prepare, and require considerable documentation before an agency can make a decision on who will be awarded the contract. As a result, many buyers choose to forego RFPs in favor of RFQs whenever possible. Before putting something out for bid, buyers can do research in advance using online databases like GovSpend, where historical purchases for thousands of agencies are available for viewing and analysis.  This provides insight into which vendors were awarded contracts in the past, their prices, and other detailed information. Vendor verification is essential before making the final decision on a contract.

Piggybacking

Government agencies often use an existing contract to acquire a commodity or service at the same or lower price from another public entity contract. In one case, an agency in Monroe County, PA had a large project that needed to be awarded. After researching potential vendors using GovSpend, they found a vendor in a neighboring city that had a current contract with an agency in the city. Monroe County then proceeded to successfully piggyback onto that contract. This secured the contract and pricing that needed to come under budget. While piggybacking is nothing new, only recently have agencies gained the ability to explore opportunities outside of their existing vendors using the power of data.

Sole Source Buying

Sometimes, agencies need to build a case for purchasing from a vendor who is the only one to sell a particular product or service. Agencies who find sole source vendors can make a purchase without going through the RFP process as long as they can verify that the vendor is a sole source. When sole source buying, it is important that agencies utilize the most efficient tools, as relying on Google can be time consuming and unreliable.  Buyers can now search for vendors on a national level and confirm that they have found the sole source of a particular product or service.

General Services Administration (GSA) Schedule

A fast and effective contracting vehicle for both agencies and vendors, the GSA establishes long-term government wide contracts with commercial companies to provide access to millions of products and services at volume discount pricing. However, using the GSA schedule can also be time-consuming and complicated as it relies on the RFP system. If a buyer only needs to research pricing or gather purchase order data, a much easier method is to simply run an online price check.

All of these purchasing methods have been the standard in government procurement for decades, but the tools that agencies and businesses use to perform them efficiently are changing. Technology is allowing for more streamlined communication channels, detailed tracking and the long-overdue simplification of public purchasing as a whole. Platforms like GovQuote and GovSpend make it easier for agencies to confirm if vendors are sole source, find opportunities for piggybacking or work with a co-op. Agencies can also communicate directly with vendors when they post new RFQs via smart instant messaging that keeps both sides up to date at all times. The biggest advantage is gaining access to market data which, until only very recently, was being heavily under-utilized.

As vendors and government agencies move more towards utilizing technology and various data-driven applications, the world of government procurement will continue to change. Begin future-proofing your process with a free GovQuote account:

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GovQuote is the first fully web-based platform to connect government agencies and private companies on the largest, fastest, and most user-friendly request for quote (RFQ) marketplace. GovQuote is revolutionizing public procurement by providing an online marketplace where State, Local, and Education (SLED) agencies obtain quotes by reaching thousands of qualified companies competing for government business. Using powerful smart technology to cut out costly and outdated procurement methods, GovQuote saves organizations countless hours and millions of dollars, all with full compliance, facilitating crystal-clear transparency in the public sector while leveling the playing field for small and disadvantaged businesses.

2018-10-19T14:39:41+00:00