Procurement’s changing role: Adapting for the future

The needs of communities, workforce and environment are rapidly changing. In response, so too, is the role of procurement. Known for their long history of traditional processes, strategic procurement teams are currently evolving and updating their ways of getting things done. 

Nimbleness in providing services
In early 2024, San Diego County in California, faced massive floods due to large rainfall. More than 2,000 residents, including 800 families, were displaced for an extended period and needed to be temporarily housed in hotels across the county. Many of these residents faced economic hardship, so the county also sought to provide food options.

An immediate need was coordinating the purchase and delivery of food. At first, the county partnered with a local catering company, but because families were scattered across many hotels, this plan wasn’t feasible. That’s when San Diego County turned to Uber for Business.

Within 24 hours, the county had distributed vouchers for meals and groceries to eligible families that were ready for them to use. Each family received a weekly voucher, with the dollar amount based on household size and need. This allowed families to order on their own schedule, follow dietary restrictions, and feel a little closer to normal life with many restaurant and grocery options available.

For nearly three months, the program successfully supported the meal needs of displaced families. The county could easily manage and monitor usage with Uber’s real-time reporting and self-serve administrative tools.

“The January storms were an historical event that required an innovative approach to help residents recover,” said Ebony Shelton, chief administrative officer for San Diego County, to news sources. According to Sebastian Reszka, senior manager of government sales at Uber for Business, “We’ve seen a growing demand from governments seeking rapid, scalable solutions to move and feed large groups of people. In response, we’ve secured cooperative agreements that enable quick deployment of rideshare and delivery services.”

Innovation supports the environment
As urban areas expand and nighttime activities increase, the importance of public space lighting has come under scrutiny, particularly concerning its impact on both human experience and wildlife. In one area of growing commitment, Dark Sky Initiatives aims to reduce light pollution and promote sustainable lighting practices that not only enhance the quality of life for residents but also protect nocturnal wildlife.

DarkSky International advocates responsible outdoor lighting, encouraging the use of fixtures that minimize light pollution. The goals are clear: reduce glare, avoid light trespass and preserve the natural night sky. It is often not known, but the impact of artificial lighting on wildlife can be profound. Species such as birds, sea turtles and nocturnal mammals rely on natural light cues for navigation, mating and foraging. Increased artificial light disrupts these behaviors, leading to population declines and altered ecosystems. As a result, urban planners are increasingly considering the ecological impact of lighting on wildlife.

When a thriving and growing coastal community in southern Florida sought to provide pedestrian lighting along extensive stretches of existing public access located near sensitive sea turtle habitat, they connected with Forms+Surfaces Inc. (F+S), a leading designer and manufacturer of lighting and site furniture products. The city was initially drawn to the aesthetics of a particular lighting fixture; however, it did not meet the specifications of light output requirements for this environmentally sensitive location. To make it workable, F+S design engineers discussed the unique performance needs with city staff and designed a custom 270-degree “Turtle Shield” and incorporated 42-watt Amber LED lamping. The custom design of the light shield ensures that light output is focused directionally as to not disrupt the natural behaviors of sea turtles, particularly during the mating season.

In South Florida, Forms+Surfaces Inc. designed a custom “turtle shield” for its light fixtures that ensured the light output would not disrupt the behaviors of sea turtles. (Photo courtesy of Forms+Surfaces)

According to Deron Thompson with F+S, “We were able to collaborate with the city to modify our standard product and accommodate the special requirements for this environmentally sensitive application.” As more municipalities recognize the importance of sustainable lighting practices, Thompson adds, “we can expect to see a continued shift toward designs that prioritize both human needs and wildlife protection.”

Energy efficiency is a growing requirement within many solicitations. When faced with budget shortfalls, public entities are seeking to extend budgetary dollars through options offering energy efficiency savings and innovative financing structures. These efficiency projects range vastly from updating the light fixtures in a single public facility to incorporating solar or wind energy to power an entire region. 

Contractors have historically offered as a basic, month-long retrofit or air conditioning replacement. However, the new trends are towards a specialized, 20-year energy savings performance contract (ESPC), efficiency-as-a-service (EaaS) or power purchase agreement (PPA). As the contracting requirements for public works are already administratively complex, tedious, and require reconciliation of various local, state and federal codes and laws, adding an energy efficiency component manages to increase that complexity.

One can imagine a public school administrator, grappling with student education, teacher retention and school safety also trying to confidently decipher federal, state and local laws unique to ESPC procurement before committing to a multimillion-dollar energy efficiency project. Rather than utilize limited internal resources to recreate the procurement and vetting process for such projects, many public entities are opting to rely on their statutory right to cooperate with other public entities to jointly procure these unique project types. Unlike individual municipalities and school districts, cooperatives can utilize their public entity membership pool and resources to thoroughly identify and research energy efficiency procurement laws and vetting.

Where an advertisement in a local, rural newspaper alone may have resulted in one or two limited, purported ESPC proposals, cooperatives are able to qualify numerous reputable efficiency vendors throughout the nation, including those pre-qualified by the U.S. Department of Energy as qualified energy service companies. Purchasers for public entities want the cost savings and community advantages of energy savings while also seeking the cost savings and efficiency of cooperatively procuring those complex projects when available and appropriate under applicable law and policy. As a reflection of this growth, in 2021, TIPS experienced a 127% growth in the use of their cooperative ESPC contracts over the prior year.  

Greater movement towards automation
Government agencies and school districts are increasingly turning to digital tools and platforms to streamline procurement processes, including eProcurement systems and data analytics. Analyzing procurement data provides intel into spending trends, supplier performance and contract compliance, for better decisions and ultimately, greater value for taxpayer dollars. Often, a well-established supplier can offer insights and share their views of the horizon to help government and educational institutions.

One such company, W.W. Grainger Inc., is a leading broadline distributor with $16.5 billion in 2023 sales and 4.5 million active customers, with a marketplace position that offers a unique perspective on evolving B2B procurement trends. Grainger conducted a survey to better understand how organizations are using eProcurement for MRO. The online survey was completed by 500 Grainger customers to help project the trends of the future. Respondents were from a mix of business sizes within MRO industries and all self-identified as being familiar with eProcurement platforms. Questions sought to learn more about how they saw the advantages, challenges and opportunities associated with their procurement systems.

Key data points from the survey concluded:

Another growing priority for government clients, particularly in the areas of emergency response and public safety, is due to recent global events that have underscored the criticality of supply chain resilience. Entities are more apt to seek supplier partners who can both ensure timely delivery and minimize disruptions to their operations. Robust inventory management, diversified sourcing strategies, strong logistics capabilities and proactive communication and transparency to mitigate potential disruptions are also becoming greater requirements.

Integrating technology to meet daily operational needs is becoming the new norm. In Iowa, Midwestern State Public Schools, with more than 14,000 students and staff, decided to equip its entire fleet of over 135 school buses with Wi-Fi. The decision was made due to several factors, including increasing travel time for students, and recent changes to athletic conferences which led to longer travel times for competitions. Furthermore, the district wanted to lend additional support for students experiencing homelessness as the district was experiencing near-record numbers of students from transient or unhoused families. Through their Bridging the Homework Gap program, students with internet access were able to complete homework, especially those in rural areas during longer commute times (30+ minutes). 

The project was awarded in March 2024, and by the end of the year, all school buses will have Wi-Fi connectivity. The district anticipates the benefits will support student learning by allowing them to use Wi-Fi to complete homework and access online learning resources during their commute. For safety, the district ensures that the network manager is CIPA compliant, allowing the district to block social media platforms and whitelist school related websites and software. They also worked with suppliers who have direct representatives with local presence for better support and collaboration. 

Professionals installed R 2100 routers, specially designed by Cradlepoint for automobiles, in more than 100 buses within 10 days. The routers include Granite SIM cards and are managed through Cradlepoint's CIPA-compliant network manager.

The project faced initial delays due to funding approval which pushed back the initial installation period. The district then had to rearrange its bus schedules to accommodate the installation process. Despite the initial obstacles, the project was successfully implemented through collaboration between Granite, the Wi-Fi provider and the district's project teams.

Procurement requires help too
Procurement consulting is one of the fastest growing contracted services to address the growing need for assistance across the nation. Marcheta Gillespie, president of NIGP Consulting, shares “My team consists of dozens of highly experienced thought leaders in the profession, both active and retired procurement professionals. We all hear similar concerns thru the lens of our extensive public sector experience.” According to Gillespie, these challenges include:

• Lack of sufficient, experienced resources: Many entities (particularly small organizations) struggle with recruiting and retaining qualified, professional staff. NIGP Consulting has numerous clients who have been seeking qualified professional procurement positions, from entry level up to leadership, for both short- and long-term support engagements.  

• Lack of procurement “maturity”: Due to the challenges with finding and retaining experienced professionals with core competencies, many entities are placing individuals with limited experience into procurement leadership roles. These individuals may come from other entity roles, such as finance. Often, they may not understand the role of procurement in the public sector or lack the necessary core competencies to properly manage procurement.

• Lack of AI policy & procedure: Evidenced through a recent NIGP Benchmark Survey, a very small percentage (less than 7%) of public sector entities who responded to the survey (more than 750 entities participated) indicated they had a formal policy on how their entity can use AI in operations. AI is fast becoming a tool used in other sectors, but significantly lagging in the procurement profession. 

• Lack of suppliers who respond to solicitations: Many entities struggle to build a diverse supplier database, and to secure enough competitive bids/proposals in response to their sourcing opportunities. Having learned a key lesson from the pandemic, many entities recognize the value of having a diverse supplier portfolio. However, some entities still fail to recognize their own barriers to competition, resulting in lower supplier response rates. These barriers may include outdated and/or restrictive terms and conditions, mandatory non-value-added requirements, or lack of expertise to properly define the needs of the entity.

• Lack of appreciation for the value of procurement: Perhaps the greatest impact is the continued lack of recognition for the value of procurement. Not having the proper level of authority within the public sector organizational structure impacts areas of procurement responsibility, as defined by industry’s best practices. This can impede the positive impacts that procurement could have in increasing transparency and competition, decreasing risk, driving savings and efficiencies, and ensuring the success of public projects. 

Increasing support for community causes
Traditionally, the relationship between government teams and suppliers has been rigidly structured and not conducive to collaborative conversations. This makes sense during an active solicitation process, where distinct communication lines must be drawn to ensure fair competition. However, outside that formal process, the scenario is changing as new technologies evolve or complex problems must be addressed. Suppliers know their industry well, and it makes sense the government and educational institutions create a more collaborative approach to learn new ways to tackle age-old problems as well as new social and community initiatives.

One way to encourage this type of collaboration is through cooperative contracts. As the solicitation process is completed, the entity can have an open dialogue with the awarded supplier to discuss the problem and potential contracted solutions. Jeff Drury, senior director of Choice Partners National Purchasing Cooperative shares, “With cooperative contracts, the lengthy, difficult part of the procurement process is completed. This saves a tremendous amount of time and can aid the entity in spending their “evaluation” time determining if the supplier’s offered products and services help achieve the desired social and/or environmental goals.”

In a recent successful collaboration, The Toro Company partnered with the Minnesota Twins MLB team and the city of St. Paul, Minn., to revitalize the Dunning Sports Complex. Volunteers from each organization gathered to install new pitching rubbers and bases, regrade infields, aerate grass and landscape the facility. 

The Dunning Sports Complex project was made possible by the support of local volunteers, the use of Toro equipment, and $20,000 in donations from The Toro Company Foundation and the Minnesota Twins Community Fund.

"As part of our ongoing commitment to provide safe and accessible playing fields and outdoor spaces, we’re honored to help ensure that every child has a place to chase their dreams,” says, Marnie Wells, president of The Toro Company Foundation.

The Dunning Sports Complex has been home to thousands of youth baseball players, including, National Baseball Hall of Famer Joe Mauer. The project provided St. Paul with the opportunity to retire Mauer’s youth jersey and thank him for his continued commitment to the community—a full-circle moment for a hometown hero and a reminder of the lasting impact a well-maintained field can have on future generations.