Why Value Procurement Is Critical to I-9 Compliance.So now its your turn. Go read it, too. We'll discuss.
The premise is this assertion:
In the world of procuring goods or services, there is an ongoing debate between value procurement versus price procurement. As applied to the field of I-9 compliance though, this critical debate can mean the difference between exposure to hundreds of thousands of dollars in fines and other risks or reducing overall I-9 non-compliance risks.
Focusing on a vendor’s price offerings as the primary motivation, at the expense of a thorough vetting of a vendor, can lead to expensive lessons learned. This is where proponents of value procurement argue that organizations will get a better return on investment when value (rather than price) is the central focus during procurement. Value is “a fair return or equivalent in goods, service, or money for something exchanged.”
For example, if the procurement process was fixated on a low price, important considerations to determine what value the service/product will bring to the organization will be completely eclipsed. A vendor could fail on all counts (below) yet still survive a Request for Proposal due to its low price. While some might call this approach “penny wise pound foolish,” the results, as described in the Minnesota State example, can be costlier in the long run.
That Minnesota State example is briefed this way:
Minnesota State Colleges and Universities procurement process for an I-9 vendor back in 2009 which ultimately led to a security breach of employee I-9 records on the internet. After a formal review by the Minnesota State Office of the Legislative Auditor, it was determined that Minnesota State lacked a formalized I-9 vendor review process. According to the report, Minnesota State had selected its I-9 vendor overwhelmingly because the low price offered by the I-9 vendor, which was four to five times lower than competing vendors’ prices, and because the I-9 vendor waived “set-up” fees. The Office of the Legislative Auditor also determined there was a lack of a meaningful assessment of the I-9 vendor’s security claims made in its marketing materials and no meaningful review of contract provisions to safeguard encrypted data provided by the Minnesota State to the I-9 vendor.
I very readily accept the author's point that different races require different measures of success. But, the more you move away from objective criteria, the more you find beauty in the eye of the beholder, not in the thing beheld. The more you move to the "value" end of the spectrum, the more oversight and critical review you must allow to avoid the appearance of favoritism in the discretion used.
The author framed the whole "debate" as a simple matter of "price" vs. "value". In fact, even in a competitive price model of source selection, "price" is the very last consideration.
In competitive sealed bidding, there are three equally important factors: responsiveness to the bid specification, the responsibility of the bidder, and then price. The Minnesota example, based on the information provided, failed on the first two counts, and was suspect on the last.
It is unclear that the State's specifications were sufficient to separate wheat from chaff, or if they were, whether the evaluators bothered to confirm the bid against the specifications. It is more clear that the State failed to conduct the inquiry into responsibility that is required, including an inquiry into past performance: we're told the State "lacked a formalized I-9 vendor review process".
Finally, we're told "the low price offered by the I-9 vendor ... was four to five times lower than competing vendors’ prices". That certainly should have waved red flags.
It is not simply a low bid that is required, it is a low bid that is both fair and reasonable. The State simply did not do its market research to determine what the going rate was.
On this last point, see the following:
The price is not always right
When low bidding raises question of bribery
Kroll Global Fraud Report - detecting a climate of procurement fraud
The example provided speaks to the failure of the competitive bid process, not to the benefit of the "best value" approach.
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