A review of state procurement and contracting

DOIhttps://doi.org/10.1108/JOPP-03-02-2003-B003
Pages192-214
Date01 March 2003
Published date01 March 2003
AuthorJohn R. Bartle,Ronnie LaCourse Korosec
Subject MatterPublic policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 3, ISSUE 2, 192-214 2003
A REVIEW OF STATE PROCUREMENT AND CONTRACTING
John R. Bartle and Ronnie LaCourse Korosec
ABSTRACT. Are states effectively managing contracting and procurement
activities? Are they striking the right balance between central administrative
control and empowerment through delegation? How effective is training and
monitoring? How do these practices compare to the principles of best practice?
What role will information technology play in the future for procurement and
contracting? As part of the Government Performance Project, budget,
procurement, and contracting managers in 48 states were surveyed, providing
descriptions of their procurement and contracting practices. There are numerous
developments that speak to the practical details of contemporary public
management. Five key findings are (1) information technology needs are
challenging states, with some responding well, but others struggling, (2) in most
states staff training needs to be improved, (3) restrictions prohibiting “best
value” purchasing need to be removed, (4) states can learn from and improve
practices by partnering with other governments and private organizations, and
(5) most states use a hybrid of both centralized and decentralized management
structures when it comes to contracting and procurement.
INTRODUCTION
Public contracting and procurement is sometimes an area that is
prone to weak management, poor oversight, or even corruption.
Successful contracting and procurement is often an indicator of good
management within government. It can be a very salient public issue,
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* John R. Bartle, Ph.D., is an Associate Professor, School of Public
Administration, University of Nebraska at Omaha. His research interests are in
the areas of public finance policy and management, public budgeting, applied
economics, and transportation. Ronnie LaCourse Korosec, Ph.D., is an
Assistant Professor of Public Administration, University of Central Florida. Her
research interests include privatization, IT procurement and contracting, public
policy analysis, and strategic planning and management.
Copyright © 2003 by PrAcademics Press
A REVIEW OF STATE PROCUREMENT AND CONTRACTING 193
because most people buy things and hire service providers in their
private lives, so they can understand government successes or failures in
purchasing better than many government policies. This paper examines
current data on the practice of contracting and procurement among the
American states and compares these practices to principles of best
practice.
One of the enduring tensions in contracting and procurement is
between centralization and decentralization of decision-making
authority. Specifically, we are interested in who makes the decisions, and
at what level? That tension is also present with the states in this study.
Managers need to work with both agencies and private contractors--
many of which would rather consummate procurement and contracting
agreements without any central supervision. This is especially true in the
case of specialty items about which agency personnel are likely to be the
most familiar. On the other hand, centralization allows for larger quantity
discounts, better internal control, and better integration with accounting
systems (Reed & Swain, 1997, p. 185). Regarding this debate, National
Association of State Procurement Officials (NASPO) writes (2001a, p.
5), “the best of both worlds is easily possible – central management and
delegation of procurement authority under a thoughtful set of delegation
standards, with adequate training and authoritative monitoring.” The
challenge, of course, is for the organization to establish thoughtful
delegation standards, adequate training, and authoritative monitoring
without creating excessive red tape.
New advances and opportunities in information technology (IT) have
prompted modifications in contracting and procurement, as states
reconsider what, how, and where they are purchasing goods and services.
While these procedural and policy responses differ from state to state, the
knowledge and increased efficiency that information technology
promises will certainly allow managers to become more strategic
business partners with their agency customers (NASPO, 1999, p. 2).
Another major issue in public procurement and contracting is the
choice between awarding bids based on the lowest price versus “best
value.” Traditionally, the lowest price approach awarded bids to the
lowest responsible bid--with little consideration to anything other than
price. Best value purchasing takes a variety of criteria into consideration.
The criteria which are used may vary from one case to another, but may
include life cycle costs (which sums the costs of owning and operating an
asset over its lifetime), performance history of vendors, quality of goods,

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