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PURCHASING IN THE GOVERNMENT

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THE NATURE OF THE WORK

In excess of 300 billion dollars a year is spent by federal, state, and local governments, making this industry the largest employer of purchasing professionals. Although the products and services purchased range from paper clips to space vehicles, almost all government agencies have one thing in common; the taxpayer pays the bills. This single fact places some unique limitations or restrictions on the purchasing system that a government purchaser may use. A buyer in the private sector may eliminate a vendor based on undocumented past delivery performance or on the basis of verbal complaints from using departments. A government buyer may also eliminate a vendor for the same reasons, but the action and the reasons must be thoroughly documented, and, in many cases, the action is subject to appeal. Government purchasing systems must give everyone a shot at the action, meaning everyone must be given an opportunity to bid on any item or service. The ability to perform must be assumed unless the potential seller cannot meet certain criteria written in the specifications or some related document. These and other requirements place an unusual emphasis on the preparation of the specifications and the other bidding documents which, in term, complicates the entire system.

Although the peculiar requirements of government purchasing have been mentioned in the chapters on education and medical services, it is appropriate to expand on those requirements in this chapter because government purchasing is systems driven. In the private sector, the purchasing manager may adapt the procurement system to the product. He or she may spot-buy an item that is needed immediately, might solicit open-end quotations on standard items, or solicit bids on a major capital purchase. The government buyer, however, is limited in his or her choice of systems by government regulation, statute, or policy and must follow a rigid procedure in all aspects of the purchase.



Federal government procurement programs are separated into two major departments: the general services administration and the military, both obviously purchasing a wide range of products. The military and the national aerospace agency purchase a unique product or service research and development. They contract the responsibility to develop a product that will perform a specific function. They don't know what it looks like, how it is made, or how it operates. Decisions to buy are made after the prototype is constructed and tested. Negotiating research and development contracts is an extremely complicated process requiring excellent written communications skills and a quick analytical mind. It is also very important to document every step in the negotiating process, which requires a negotiator who is detail oriented and, above all, patient.

When purchasing identifiable products and services, the general services administration and the military, state and local government agencies primarily use a formal bidding process. Formal bids can be used for one-time purchases or for long-term contracts in which the successful bidder is required to furnish the products and services of one or more agencies over a specific period of time. In most cases, some type of a centralized purchasing organization is used to accomplish two principal purposes: first, to consolidate buying power and second, to control the system to ensure that it meets the requirements of various statutes and regulations. The systems are highly structured and designed to withstand high visibility. They are also designed to reduce, as much as possible, the opportunity for abuse. Newspapers have been filled with stories of kickbacks and payoffs for decades, and many political machines have lost their power and position as a result of this type of publicity. By placing the purchasing systems in the hands of the civil service, many government entities have sought to insulate their purchasing procedures from political pressure. Although no one will deny that in some cases political pressures still exist, most government agencies are remarkably free of politics.

At the state and municipal levels, purchasing systems are also determined by some type of statute or regulation. In some respects, the purchasing function at this level is subject to even greater scrutiny than at the federal level, principally because the source of the tax dollars is localized. The taxpayer can see what his or her tax dollar is buying. The taxpayer who might ignore abuses at the federal level will fight at the local level.

The system most often used in state and municipal purchasing is the formal bid. Specifications and invitations to bid are highly publicized, and the entire buying procedure is very structured. The range of products and services purchased is enormous, from pens to complicated construction projects. In fact, it is this variety that attracts many purchasing professionals to the area of government procurement. Most states and larger municipalities use a centralized purchasing system, although the various agencies are allowed to buy specialized items below a specified dollar amount.

WORKING CONDITIONS

The working environment varies considerably. You may be working in a new facility with state-of-the-art computers and equipment, or you may be in an old office building stuffed into whatever space is available. Most state and municipal budgets are strained to the breaking point, and adequate working facilities are a low-priority item. If physical working conditions are important to you, you should investigate the facilities before you apply for the position.

Being involved in government purchasing has its advantages and disadvantages. If you are the type of person who feels comfortable in a highly structured environment, if you are very organized and job security is one of your most important work requirements, then government purchasing should be appealing. You should understand, however, that purchasing within a bureaucracy can be very frustrating, and the attention to detail required may seem excessive. Those of you who want consider able flexibility and a relatively unstructured environment should probably look to the private sector in your search for a career.

ENTRY REQUIREMENTS AND QUALIFICATIONS

Entry-level positions are usually subject to civil service regulations. Since expediting jobs are more often found in the manufacturing area, the normal entry in government purchasing is through complex clerical or assistant buyer positions. Most of the training is accomplished though informal on-the-job training programs.

Advancement is heavily influenced by seniority and, in some cases, by civil service examinations. Fringe benefits are usually excellent, with length-of-service requirements for retirement less than the private sector. Salary levels are apt to be slightly less than nongovernment entities, and pay raises are usually based on union or employee association negotiations more than merit.

Although product knowledge is important, the most important requirement is the understanding of how government works. As a public employee, you must develop sensitivity to the public's perceptions. Even though you may be a civil employee and non-political, your actions still reflect on the party in power-a fact that few politicians ignore. Your performance is often judged not only on effectiveness but also upon how it appears to the taxpayer. Following established procedure and providing proper documentation is the only way to succeed with the high visibility usually involved in government employment.

One character trait deserves special attention for government purchasers. The most important attribute that you must possess is personal integrity. In this field you may be subject to two types of pressures. First, those negotiating to sell to the government may promise you monetary rewards if you accept their bid. Also it is not uncommon to be pressured by political figures to buy from their constituents or to buy only from taxpayers in your state or municipality. Restricting potential suppliers to a specific region or political subdivision invites counteractions on the part of neigh boring regions. These counteractions or restrictions limit your ability to negotiate the best deals and also restrict markets for your taxpayers. Standing up to these types of pressures is just part of the job in government purchasing.
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