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Sunday, November 21, 2010

Guam Procurement Institute -- a proposal

This is a column I wrote, appearing today in the Marianas Business Journal.

Professionalizing procurement staff
Lawyers, accountants, teachers and real estate agents get education and continuous formal training to do their jobs. Procurement staff get ... what?

When Guam adopted the American Bar Association Model Procurement Code as the basis for its own Procurement Act, the legislature simply passed over the part that required the establishment of a procurement institute for both public and private sector procurement staff.

The comments to the ABA Code point out that "procurement is a complex process which experience has shown can only be adequately learned over a period of time. Thus training in procurement is vital for new government employees without prior knowledge in the field."

"In addition, training courses should be reasonably available to vendor personnel, university professors, students and others. Experience has shown that when a vendor or other person affected by the system (and I might mention senators and agency heads in this context) makes an unnecessary mistake through a lack of knowledge of the ground rules of procurement, it causes friction and expense to the government."

The ABA Code envisioned a local procurement institute to provide formal and continuous procurement education and training, research, and a library of procurement resource material.

A procurement institute is not bricks and mortar. It is a curriculum under the guidance of an administrator. It is both a formal vehicle for theoretical and profession education as well as a community outreach program to provide broad exposure to the "ground rules of procurement."

Hawaii is an ABA Model Procurement Code state, and it has established its Hawaii Procurement Institute under the supervision of a law professor in the University of Hawaii's Richardson School of Law. Procurement is only 20% to 25% law. The rest is logistics, purchasing management, public administration, contract management, audit and accounting.

It is my suggestion that UOG's School of Business and Public Administration would be an excellent choice of host for a Guam Procurement Institute.

The U.S. government spends multiple millions of dollars on procurement staffing and training because it recognizes the critical role procurement plays in effective government and delivery of services.

In the U.S. Air Force, contracting is a career path. Following the example of the Air Force, the U.S. Army established a "Contracting Command" and staffed it with contracting professionals.

The head of the Army's Contracting Command, Edward Harrington, was recently interviewed in the Washington Post. He said "contracting is a practice, a profession. It is similar to law or engineering, where you develop your expertise and skills over a number of years. . . . It takes time to get the training as well as to get the experience with all of the various contracting regulations. Those mid- and senior-level individuals are essential to coaching, counseling and mentoring our entry-level people coming onboard. We do regular ethics training with our contracting workforce. We focus on procurement integrity and ensuring that we have no undue influence on the process or the people in the process."

It is my belief that a better educated, trained and professional Guam procurement workforce will reduce the instances of blunder in the management of the procurement processes, saving government and industry money, time and aggravation, and delivering the whole of government from the appearance of a dysfunctional and self-interested system of patronage.

Building a quality procurement system is like building a quality hotel. You can have the best design, plans, specifications, tools, material and equipment, but, without the skilled workforce, all you have is a pile of rubble.

FOLLOW UP:

The Guam Pacific Daily News ran this Editorial November 30, 2010:
Institute: Procurement process needs enforcement, education to work

The government of Guam continues to violate its own procurement rules and regulations due to systemic problems that paves the way for abuse.

Elected officials need to revamp the GovGuam procurement process and implement measures to ensure procurement laws and regulations are followed. We must also hold accountable those who don't follow the law.

The Department of Public Works has been "artificially" splitting large contracts into smaller, lower-priced ones to circumvent the competitive bidding process. This practice is allowed to continue because there is no effective penalty against doing so.

GovGuam has a long history of violating procurement rules. Agencies split contracts to circumvent the rules or fail to follow regulations that result in bid protests and delays to important projects.

This has to stop because our community can't afford to allow it to continue. We need to be able to trust that government agencies and employees will follow their own procurement rules and regulations.

Elected officials need to implement tighter controls on agencies and employees to ensure the procurement process is administered properly.

Guam also needs a "Procurement Institute," to educate and train local government employees in the procurement process. The lack of training is the most enduring and systemic problem with the island's procurement process, according to local attorney John Thos. Brown, author of "A Guam Procurement Process Primer."

According to Brown, when the island adopted its procurement code, lawmakers omitted provisions that required a funded procurement institute to hold procurement training for public- and private-sector procurement participants.

The incoming administration must work with lawmakers to make these changes happen. Elected officials need to make it clear to directors and employees that they must follow procurement laws and regulations. It's also important that whenever procurement rules aren't followed, that GovGuam hold accountable those responsible.

Government officials can't turn a blind eye or cast blame on the system. When agencies and employees fail to follow rules and regulations, they must be held to task for that failure.

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