Claims that US President Donald Trump meddled in a massive Pentagon cloud computing contract because of his vendetta against a vendor should serve as a lesson for government procurement officers in Australia, writes James Baker.
On 13 February the $10 billion Pentagon Joint Enterprise Defense Infrastructre (JEDI) cloud-computing contract awarded to Microsoft was put on halt after Amazon’s CEO and owner of the Washington Post Jeff Bezos made claim of interference in the procurement process.
Amazon argued US President Donald Trump had been seeking to punish it for alleged negative coverage by the newspaper.
If the procurement process is found to have been unfair against Amazon, this will prove costly and highly embarrassing to the Pentagon and those involved in the procurement process. This episode should serve as a lesson for government procurement personnel.
A charge often levelled against government organisations is that they stifle innovation. The truth of this may be debated, but an underlying reality is that the requirements for ethics, transparency and probity make this type of procurement problematic at best.
Evaluation of technology and innovation procurement does not fit neatly into an evaluation matrix. It can be tempting to avoid procuring innovation, however as we head into a connected future this is becoming more difficult.
The greatest opportunity for innovative outcomes is in the design of the procurement process – if this is not done thoughtfully providers may be too constrained by contractual conditions to be able to innovate. The best societal outcomes will often require an ability to balance the unknowns involved in procuring innovation against the considerable benefits that they bring.
Procurement process
The first step towards this end is to ensure good fundamental procurement practice. Actual or perceived conflicts of interest can irreparably undermine any procurement process, damaging public faith in government integrity. Any potential conflicts must be declared, and if a real conflict is identified, those people removed from the decision-making process.
Likewise, government officers must be protected from pressures to modify their judgements. Most government organisations have strict protocols around communications with procurement personnel, and electronic procurement platforms are making this easier to manage. It should be clear to all personnel their obligation to report any violation immediately.
Special thought should be given as to how to engineer a procurement policy for technology or other innovations. A very prescriptive process may leave you with only one or no vendors that are able to meet the requirements. Rather than relying on assessing features, the procurement team should be very clear on the outcomes that they are seeking.
Traditionally organisations needed to purchase bespoke software products to meet their business requirements. This meant very expensive up-front development and implementation costs. Frequently these systems were clunky and did not adequately meet user needs and out-dated systems would be tolerated for long periods due to the high expense of upgrades.
New options such as SaaS (software as a service) mean products are made available on a monthly subscription model. These systems are constantly being improved and if well managed should never go out of date.
The attention paid to process when commencing an IT or innovation procurement process is one of the pillars for ensuring the best possible outcomes for government organisations. By protecting the integrity of your procurement process and clearly defining your requirements, risk can be greatly reduced, improved performance achieved, costs lowered and the public faith in your organisation protected.
James Baker is the founder of cloud-based administration services provider Varico and a consultant to government organisations on governance, procurement and contract administration.
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