Government Procurement: Bids and Contracts

November 2nd, 2020

Are your procurement processes safe form tampering?

 

Today’s post is from our archives at SafeSourcing Inc.

If anyone has ever seen the movie War Dogs, it is a prime example of exactly how government procurement works, well at least how it worked back in the 90’s. In the movie, the government used procurement to buy weapons and ammunition on a large scale.

For anyone who doesn’t know what government procurement is, it is the procurement of goods, services and construction on behalf of a public authority, such as a government agency. With 10-20% of GDP (Gross Domestic Product), government procurement accounts for a substantial part of the global economy. Per Wikipedia, to prevent fraud, waste, corruption, or local protectionism, the laws of most countries regulate government procurement to some extent. Laws usually require the procuring authority to issue public tenders if the value of the procurement exceeds a certain threshold. Government procurement is also the subject of the Agreement on Government Procurement (GPA), a pluryilateral international treaty under the auspices of the WTO (World Trade Organization).

Working at SafeSourcing and learning about all the different markets there are to take out to bid outside of the government is a huge undertaking. However, it would be incredible to learn exactly what the government takes out to bid. The opportunity in Government Procurement is substantial. Government Procurement brings in about 7 trillion dollars annually.

The government buys many of the products and services it needs from suppliers who meet certain qualifications. The US federal, state and local governments apply standardized procedures by which to purchase goods and services.

For example, according to RFQ.com the federal government does not purchase items or services in the way an individual household might. Instead, government contracting officials use procedures that conform to the Federal Acquisition Regulation (FAR). The FAR is a standardized set of regulations used by all federal agencies in making purchases. It provides procedures for every step in the procurement process, from the time someone in the government discovers a need for a product or service to the time the purchase is complete. When the government wants to purchase a certain product or service, it can use a variety of contracting methods. Key contract methodologies used to purchase products and services include:

  • Simplified acquisition procedures
  • Sealed bidding
  • Contracting by negotiation
  • Consolidated purchasing vehicles

There are problems, however, with procurement within the government, such as the possibility of corruption. Like in movie War Dogs, you had 2 Americans that ended up corrupting the procurement process and stealing millions of dollars from the government and overseas officials by using the procurement process to hold fake bids and then collect the money on weapons and ammo and then buying them from the black market. The movie is based on a true story that happened in 2007. David Packouz and Efraim Diveroli ended up proving how corrupt Government Procurement could become. Worth the read? Maybe an upcoming blog.

For more information on SafeSourcing, or on our Risk Free trial program,  please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you.

 

 

 

Knowledge Management Framework Can Help Your Business?

October 29th, 2020

A Knowledge Management framework is ......

 

“When you talk, you are only repeating what you already know. But if you listen, you may learn something new.”—Dalai Lama

Today’s post is from our archives at SafeSourcing Inc.

A Knowledge Management framework is a complete system of People, Process, Technology and governance, which ensures that Knowledge management is applied systematically and effectively to improve business results.1.

➢ People; knowledge management roles have to be established in the business, communities need to be set up to share and reuse tacit knowledge, behaviors such as seeking for and sharing knowledge need to be incentivized, and to become ‘the way we work’2

➢ KM Processes; there has to be a tried-and-tested process for capturing, distilling, validating, storing, applying and reusing knowledge, and also for innovating.

➢ KM Technologies; the people and the process need to be supported by enabling technology, which allows knowledge to be found and accessed wherever it resides (in databases, on the Intranet, in people’s heads). IT plays an important role in KM, by providing the technology to allow people to communicate.2

➢ KM Governance; without a governance system that promotes and recognizes sharing and the re-use of knowledge, any attempts to introduce KM are going to be a hard struggle. Stay tuned for next month’s blog where we explore more about Knowledge Management Framework.2

Why is this important in your business?

A strong KM framework is vital for the success of Knowledge Management; as follows 3

➢ With no accountabilities, it is nobody’s job.

➢ With no processes, nobody knows how.

➢ With no technology, nobody has the tools.

➢ With no governance, nobody sees the point.

We hope you enjoyed today’s blog. Stay tuned for next month’s blog where we explore more about Knowledge Cycle.  For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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Resource: 

  1. http://www.knowledge-management-tools.net/different-types-of-knowledge.html
  2. http://www.knowledge-management-cafe.com/faq/what-knowledge-management-
  3. www.knoco.com/knowledg-management-framework-design.ht

 

Collaborative Buyer Organizations, Share Groups and Consortiums are evolving in order to compete with mega retailers.

October 28th, 2020

No one does collaborative sourcing programs as well as SafeSourcing! Guaranteed!

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc.

These business structures have been around for a long time. Many have evolved to use cutting edge e-negotiation and eProcurement tools. Their retailer members are also benefiting from their use of these tools in order to reduce their net landed costs in many different ways.

These types of organization can go by many different names such as wholesaler, collective buyer, consortium, cooperative, share groups and more. They all have one thing in common. They consolidate purchasing volumes for a wide array of groups that may have very similar business structures, but for the savvy consortium can also be wildly different.

In the retail vertical, companies may actually belong to several different buying groups because their primary group does not offer expertise in a certain area.

Consortiums are also evolving and beginning to focus mixed markets where it makes sense. In general consortiums tend to be vertically focused such as a drug industry consortium with the members generally representing the drug industry only. However some consortiums are beginning to market them selves outside of their vertical to retailers or other companies who want to take advantage of learned expertise that the consortium possesses in the categories that are common across more than their own vertical and offer increased volumes. An example might be drug stores sourcing very similar products that health care organizations like hospitals source. Although this may seem like a stretch fro most, it is now very common within retail for non vertical specific players to work together.

Today’s advanced e-negotiation or e-procurement tools make it much easier to accomplish collective buying and aggregating outside of a consortiums initial area of expertise. Large and small retailers alike now have the capability of viewing a much broader universe of suppliers and other companies while also coordinating and participating in collaborative events from hundreds if not thousands of miles away. Suppliers now have an opportunity to earn business they could never compete for in the past.

Retailers should ask their collective buyers how they plan to make the use of these types of tools and what they have to offer in terms of introductions to other companies for increased volume.

If you’d like to learn more about our risk free trial or how SafeSourcing may be of service to you, please contact a SafeSourcing Customer Services Representative.

Loss Prevention

October 27th, 2020

In 2018, it was reported that U.S. retailers posted an annual loss of $35 billion dollars. Two years later the results will be worse.

 

 

Today’s post is from our archives at SafeSourcing, Inc.

What will 2020 results tell us after a very challenging year? These practices are still very important regardless of retails evolving model.

In 2018, it was reported that U.S. retailers posted an annual loss of $35 billion dollars due to theft and errors. This includes internal theft, shoplifting and also errors such as inventory not being accounted for correctly. According to hubsopt.net there are 6 principles you should follow to minimize theft in your company.

  1. Prevention: Taking the necessary steps to prevent theft from happening. Dedicating resources, whether internally resourced, co-sourced or outsourced, brings the skill, knowledge and attention to the concepts of loss prevention and the continued progression of a loss prevention function. The creation of policies, procedures and processes geared toward the holistic approach to loss prevention provides the greatest long-term opportunities to prevent loss and increase company profitability.
  2. Awareness: Make sure you and your team are aware of how to prevent theft and steps to take to be more diligent. The key to awareness is to make certain that it focuses on all levels of associates; field management, store management and all associates. It must also be viewed as part of the overall business and not seen as something separate or only utilized by store personnel.
  3. Compliance: Maintaining compliance within retail locations is always best served through auditing the various operating procedures and policies. You need to make sure you hold people accountable and everyone is doing exactly what they need to. Having random audits keep everyone in line and hopefully less mistakes.
  4. Detection: The use of technology, coupled with generating awareness about the    technology, a retailer can create a level of deterrence against future thefts. Technology alone, however, is not a complete solution. Make sure once something is detected you take very quick action to fix it. The longer you wait the chances of bouncing back from the loss is minimal.
  5. Investigation: Involving the collection of evidence, interviewing of associates, or the overall process to find someone involved in theft. Although the term investigation is often used in this sense, it is not entirely accurate. An auditor conducting an operational audit is in fact conducting an investigation to determine compliance or adherence to policies and procedures.
  6. Resolution: The reactive aspect of a loss prevention program starts to become proactive once again. Establishing a process for resolution will help to answer the questions of how to prevent future losses. After a solution has been determined it is very important to see it through and make sure things get fixed for future problems.

Per hubspot.com, reviewing the six principles of Loss Prevention, it has become evident how each of them plays great importance in building and maintaining a solid loss prevention program. As individual principles, they each provide elements toward reducing shrinkage, margin loss and costs. Collectively working in tandem, they provide the key principles of a loss prevention program and a solid foundation against loss.

For more information on how SafeSourcing can help in your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you today.

References:

http://cdn2.hubspot.net/hub/31499/file-282948940-pdf/The_Six_Principles_of_Loss_Prevention.pdf

 

Are Your Properties and Stores Ready For The Upcoming Winter Season?

October 23rd, 2020

Well it’s hard to believe it’s that time of year again.

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

Well it’s hard to believe it’s that time of year again and many of us are saying finally.  The leaves are turning colors and the temperatures are starting to drop.  It’s time to start thinking about what kind of fall maintenance needs to be done before winter weather arrives.  With these cooler temperatures, it makes for the best time to take care of any outside maintenance that needs to be done before the really cold weather arrives.  For example, mowing the lawn for the last time this season.  Your lawn should be approximately 2 to 2 ½ inches by wintertime.  This is considered to be the right height so that it will not be stressed during the cold winter months.  This height will also ensure that your lawn will not be affected by snow mold.  Snow mold is a type of fungus or turf disease that can damage or kill grass after the snow melts.  It is also a known allergen that can trigger allergies and asthma.   Along with mowing the lawn, it is important to make sure that you clean out your gutters once all of the leaves around your property have fallen.  Leaving these leaves and other debris within the gutters can cause them to become clogged which can lead to leaky roofs or water damage to the exterior or interior of your property.  Since the weather is nice, now is a good time to make a list of all the things that need to be done and get prepared for winter.  Below are some things that you may want to add to your list:

  • Aerate the soil
  • Fertilize the lawn
  • Check for foundation cracks
  • Inspect exterior walls for peeling paint
  • Inspect the roof for loose shingles
  • Inspect driveways for cracks
  • Install storm windows
  • Disconnect hoses from outdoor water valves to prevent freezing pipes
  • Clean basement window wells
  • Winterize sprinkler systems
  • Snow Removal Plans
  • Ice Melt or Salt Needs
  • Firewood Needs

If you need help finding a licensed maintenance company to maintain your properties, feel free to contact SafeSourcing.   If it’s Snow Removal, Firewood or Ice Melt, we know the providers that you may not. We can gather all the necessary information for you and help you decide which company meets your needs.  If you would like more information on how SafeSourcing can help you, can help you,  please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.

 

 

Watching the RFQ – Part 2

October 21st, 2020

Shining a spotlight on the moments when customer value is created in a live RFQ event.  

 

Todays post is by Dave Wenig is the Senior Vice President of Sales and Services at SafeSourcing Inc.

In this post, which is the second of several, we’re continuing to take a close look at the online Request for Quote (RFQ) from a different perspective. Rather than focus on measuring the value delivered as savings, let’s examine when that value is created and consider the vendor behaviors that went into that moment. If you need a primer on what an RFQ is, click here.

In part one of this series Watching and RFQ Part 1, we reviewed the first five or so minutes of the RFQ. While the beginning of the RFQ can at times be interesting, it isn’t always a good indicator of what will come.

The same can’t usually be said about the middle of the RFQ. I would consider the middle of a typical RFQ to be from around 5 minutes in to around 15 minutes in. While it doesn’t always look like there is a great deal of activity in this portion, I would argue that looks can be misleading.

 

 

 

 

 

 

 

 

In the example above, there are several things that are happening in this 10 minute window. First, the SafeSourcing Customer Services team and some of the participating vendors are usually in communications off and on during this time. The second is that the vendors will start to become active and begin to test the waters. Again, there are different approaches and different tolerances for the emotional impact of participating in an auction. Here, we see that some of the vendors decided to try small reductions in their costs in an effort to “fish” for the Low Quote Indicator that would tell them they are doing well. We see that another takes a drastically different approach and enters significantly lower costs that most of the competition.

In this phase of the RFQ, what we see if the vendors jockeying for position as they head into the final lap. They know that this particular RFQ was scheduled for 20 minutes plus extensions so they will want to be ready to compete in the final phase. We’ll get into the last portion of the RFQ in the next installment.

For more information, please contact SafeSourcing.

 

 

 

Where’s the Beef?

October 20th, 2020

We have experienced wide sweeping effects of COVID-19 on the health of the population.

 

Today’s post is written by Ivy Ray, Senior Procurement Specialist at SafeSourcing Inc.

We have experienced wide sweeping effects of COVID-19 on the health of the population of people as well as on the economy.  The meat production industry has been adversely impacted due to the nature of the work environment which includes the lack of social distancing, inadequate air filtration, and noise levels requiring workers to speak louder and spread more particles.  The outbreaks of COVID-19 in meat packing plants had infected at least 2200 workers at 48 plants as of April of this year, forcing some plants to enact mandatory shut-downs.

JBS meat packing company had invested in a robotics company in 2018, to reduce its labor force in favor of machines that can do it quicker.  A New Zealand company called Scott Technology has unveiled its butcher robots. A production line of a dozen robots which can strip meat from 600 lamb carcasses per hour and you only need one human to oversee the process. Many meatpacking plants use automation machinery, but the New Zealand based robotics company is developing fully automated meat processing bots, which can extract different cuts from lamb, pig, and beef carcasses which many companies believe is more efficient. The goal of these robots is to yield more meat, improve the safety of the process and do it with fewer people, eliminating the costs of human error while reducing injuries, but the costs for maintenance on these robots could slow global implementation down considerably.

Reports indicated that these robots could become main stream within the next 20 years, and the idea that a machine could replace human workers brings up all kinds of hot button political issues.  Will robot butchers take the place of human workers? This is a viable consideration, as we now have the realization of the impact on human lives during a pandemic.  The real dilemma is the profitability of the meat packing business versus the cost of jobs and the health and well-being of workers.

Consumers have seen a spike in meat prices due to the meat packing shut downs, and we depend on the availability of ample supply of meat at a reasonable price. The health crisis that we have experienced over the past few months has widened the gap between productivity and safety.  In the future, these questions must be addressed because we do not want do sacrifice our economy at the expense of a safe and healthy work environment.

For more information on how SafeSourcing can assist you in exploring your procurement solutions for your business efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

We look forward to your comments.

Two Heads Are Better Than One

October 16th, 2020

Have you ever heard that two heads are better than one? Why not Collaborate?

 

Today’s blog is by Margaret Stewart, Director of HR and Administration at SafeSourcing Inc.

Have you ever heard that two heads are better than one? While two heads may make putting on a t-shirt more difficult, most often two heads will benefit whatever project you are working on. The idea behind this is that there are more people working on a project at the same time and can be beneficial in a few different ways.

First, having more than one person working on a project can lead to new insights. Recently, I saw a motivational poster of a runner at a cliff and the words were something along the lines of taking a leap in life. While the author may have meant the poster to inspire people to go for their dreams despite difficulties, it could also be interpreted as encouraging someone to jump off a cliff. Simply having an outside perspective on a project can lead to seeing things in a new way, and possibly prevent you from releasing something that could backfire.

Another way two heads are good is that there is simply twice the available brain power. This can be especially helpful if you are working on a project with a deadline. One person can only work so fast, but having another head on the team can potentially get the work done twice as fast, making the deadline much more reachable. Even more than that, if a project is daunting enough, several heads can help even more so long as expectations and instructions are clear and well defined.

Finally, another good way two heads are better is in procurement. If you have ever wanted to take out a certain product but just didn’t think your volume was big enough to interest major suppliers, then maybe you and others can put your figurative heads together, combine volumes and gain the interest you were seeking. One way to do this is through SafeSourcing’s own SafeCollaborative. The SafeCollaborative event can showcase multiple companies’ volumes of a particular product and allow suppliers to quote everyone at once. Not only does this bring the suppliers into the discussion, but also can save money on the sourcing costs. This outcome winds up being a win-win-win for everyone involved.

For more information on ways we can with your procurement goals or projects, or on our Risk Free trial program, please contact a SafeSourcing Customer Service RepresentativeWe have an entire team ready to assist you today.

 

Balancing Deliberate vs Emergent Strategy

October 14th, 2020

Even the best laid plans need room for adjustment and adaptation!

 

Today’s post is from our archives at SafeSourcing

People can be unpredictable. Its part of what keeps life interesting. But when a project gets thrown a curveball by someone who missed a deadline, overlooked a requirement, or is just plain uncooperative, the complexities that emerge are not typically the kind of “interesting” we want to experience. Michael Porter and Henry Mintzberg were the originators of the concepts of Deliberate vs Emergent strategy more than 25 years ago, and their views are still relevant today. We can account for most of the variables rational players bring to the table, but human beings aren’t always rational, and therefore not always predictable. This is why a balance between deliberate and emergent strategies must be achieved for any project.

The aspects of your project that should be deliberate are things like financial goals, timeframes, logistical requirements, etc. High level criteria for success often do not change and should be deliberate, pre-planned, and static. When our expectations regarding the execution of this strategy collide with reality in a way that will not resolve without adaptation, our ability to develop emergent strategy is essential.

No two procurement projects have to be run the same, and in fact usually should not be. Often times the optimal strategy for achieving pre-determined goals will not be known until some insight has been gained about the supplier base; how many suppliers are capable of providing the product/service? What is the geographical availability of capacity? Is pricing market regulated? What service level guarantees are available? Is the market experiencing price increases/supply shortages? These variables should influence our strategy for execution, by changing things like baseline pricing, terms and conditions, SOW’s, and freight considerations.

Some managers believe that any form of adaptation is a weakness of strategy. It isn’t. The old way of thinking about strategy is to assume all outcomes can be known and predicted. That’s why most of the Fortune 500 Companies that existed 50 years ago don’t exist anymore. They believed their position to be a product of previous strategy that should never be changed. The companies that have thrived over the years have continuously adapted, reinventing themselves over and over again to stay relevant, and capable of exceeding their customer’s expectations.

For more information on how SafeSourcing can assist your team with this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Snow Removal-The time is NOW!

October 13th, 2020

With all that's going on have you forgotten about Finding a company to do all of your snow removal this year?

 

Today’s repost is from our archives at  SafeSourcing, Inc.

Finding a company to maintain your snow removal for multiple locations can be very time consuming and complicated. Currently I am working with a client to help them find a vendor that can do all of their 80 plus locations. According to S&I Management, there are four types of buyers that comprise the S&I industry, including: residential, mainly single-family housing; retail, primarily small businesses; industrial, typically commercial offices and facilities; and other, including hospitals, universities, airports, sports arenas, etc.

  • Residential makes up 34% of the S&I industry, an estimated $7.6B
  • Retail is just over ¼ (27%) of the market, $6B
  • Industrial represents another ¼ of the market, $5.8B – and given the larger footprint of industrial clients, is typically served by regional or national operators
  • Other, such as hospitals, airports, etc. make up the remaining 17%,$3.3B

Snow and Ice services are growing at a fast pace. It’s expected to grow 3.2% every year until 2021. Now is the time to reevaluate what you are spending on your snow removal services. In the last few years we have saved our clients about $22,000 per RFQ. I know every company would love to have an extra $22,000 in their budget. If you are in the market, there are 110,000 companies in the snow removal industry, 88,000 are sole practitioners. The average operator has been in business 15.4 years and about 1/3 have more than 20 years of experience. Finding you a new vendor to do all of your snow removal services would not be difficult to find and there are companies that would love new business. The saving is there, you just need us to go look for it.

For more information on how SafeSourcing can help in your procurement efforts, or on our Risk Free trial program, please contact a SafeSourcing Customer Service Representative. We have an entire team ready to assist you today.

References………………………………………………………

  1. https://www.google.com/search?q=snow+removal+and+landscaping+market+2019&oq=snow+removal+and+landscaping+market+2019&aqs=chrome..69i57.16970j0j7&sourceid=chrome&ie=UTF-8
  2. https://www.buildings.com/news/industry-news/articleid/21059/title/private-snow-removal-a-16-8-billion-industry