Local, state, and federal governments generally engage in high volume contracting, and thousands of private businesses are the other parties to these agreements. There are often many requirements for a company to qualify to enter into a contract with the government, and strict compliance is usually mandated. Nonetheless, as with many business arrangements, contractual relationships are often fraught with issues, and this can be particularly true with respect to procurement as fulfilling large orders across borders can be quite complicated. Unfortunately, there are certain matters that repeatedly arise. Here are some of the most prevalent procurement nightmares and how to avoid them:
Miscommunication is frequently a massive issue within companies, between companies, and between firms and government agencies. These misunderstandings can occur for all sorts of reasons - sometimes due to a different communication approach, sometimes out of fear of reprisal, and sometimes for no good reason at all other than carelessness or oversight. In this digital age, with the availability and ease of instant communication across all sorts of platforms, there is really no excuse for miscommunication to occur as often as it does.
One of the key ways to avoid having issues arise due to faulty communication is for the parties to clearly delineate their expectations for communication from the outset. For example, contracts can incorporate a clause dictating that updates should be communicated according to a specific schedule. Or, the government may need to inform the companies with which it contracts that any issue, real or potential, be reported within a certain timeframe so that mutual problem solving can commence. Regardless of what is required and how it will be delivered, it must be clear to all involved that effective and timely communication is obligatory.
In some cases, communication is not an issue and yet conflicts still arise. This can also occur for an array of reasons, but the manner in which each party approaches the conflict tends to influence how it will be resolved, or not. Companies engaged in a high volume of contracting must understand that things will go wrong at some point. In procurement, there can be a number of external forces that disrupt the supply chain and deliveries.
To prevent conflicts from escalating to the point of litigation, it is wise for both parties to put some type of contingency plan into place. This may be an agreeable backup plan between the parties to the contract, or it may mean the government has backup suppliers from which it can source the goods and services it needs. In addition, the companies contracting with government agencies may want to consider having some subcontractors on hand. Then, in the event that they are unable to fulfill their contractual obligations, they may be able to tap a subcontractor to help fill the gap.
To survive in government contracting, companies wishing to provide goods and services must ensure that they consistently deliver high quality products. Unfortunately, contracts sometimes endure for so long and/or become so demanding that to keep up with the requirements, quality ends up suffering. Government agencies are not always in a position to take notice or make alternative arrangements quickly due to resources that are usually more limited in comparison to the private sector. But, this is obviously no reason for companies to think that they can get away with delivering subpar materials.
Contracting with the government can be a lasting and lucrative revenue stream for businesses of all sizes and across industries. As a result, maintaining quality is paramount to a company’s reputation, goodwill, and survival. To avoid succumbing to declines in quality, it is important for companies to be realistic about how many contracts it can handle at one time. In addition, government agencies must find out whether a company really has the bandwidth it purports to have. In essence, there is a mutual responsibility to do due diligence when selecting contracting partners.