Understanding the evolution and intricacies of the government procurement process is essential for businesses seeking to navigate this complex arena. Did you know that government procurement has a long history, reaching back to ancient times? From the Great Pyramids’ construction to the Industrial Revolution’s innovations, procurement has evolved significantly over the centuries.
This week, we’ll take you on a journey through the origins and development of procurement, exploring how ancient practices have shaped the modern systems we rely on today when organizations seek to do business with government entities at the federal, state, and local levels. Whether you’re new to the process or looking to deepen your understanding, we aim to provide valuable insights for our clients and anyone interested in mastering the government procurement process, helping them to secure opportunities and succeed in their business ventures.
Ancient Civilizations to the Industrial Revolution
While some records attribute the origin of procurement to the Industrial Revolution of the 1800s, the earliest records of businesses exercising procurement practices trace back to ancient civilizations in the B.C. period. Many ancient civilizations developed sophisticated procurement methods during the Great Pyramids’ construction. In Egypt, scribes were responsible for both pyramid design as well as acting as recording clerks. Egyptian scribes used papyrus to record the 5.5 million tons of limestone Egyptian pounds and thousands of workers – a project with a scope large enough that it required a thorough and complex accounting process for material sourcing and procurement.
Farther east, in the Old Babylonian Empire (current-day Iraq), archeologists recovered a stone tablet upon which a customer carved a complaint about shipping delays and delivery miscommunications. This tablet indicates that many ancient empires employed procurement systems for vast construction projects and day-to-day civilian products and goods.
Despite being foundational in the development of procurement practices, the processes of ancient civilizations pale in comparison to the pivotal innovations in procurement experienced during the Industrial Revolution. Around this time, procurement evolved into the processes and policies of today.
Bolstered by the increasing complexity and scale of a transcontinental railroad and technological breakthroughs in manufacturing, the procurement industry began to manage budgets larger and with more expansive supply chains than ever before. The introduction of computer technology over the 20th century only increased the speed with which procurement teams could process and transfer information. This century witnessed the introduction of mass production, outsourcing, and strategic sourcing.
The two World Wars illustrated further the importance of the government procurement process from a strategic position. Microsoft’s introduction of Excel, the first spreadsheet application, in 1985 was a pivotal shift for procurement managers, granting a level of sophistication that allowed for widespread globalization.
The increasing pace of procurement, which accompanied the technological and computational innovations of the 21st century, led many businesses to shift their perspective of procurement from a clerical function to a strategic, critical managerial function.
Local, State, and Federal Methods for the Government Procurement Process
The federal government uses Sam.gov, a solicitation and contract opportunity portal, to post procurement requests and receive applications. Any entity interested in conducting business with the government must operate through Sam.gov, where the potential vendor can access pre-solicitation, solicitation, award, and sole source notices. Federal law mandates that opportunities of a particular fiscal scope (expensive requests) be published on the awarding Department’s website. Thus, potential vendors can be notified of a solicitation opportunity on a federal agency or department site but must inquire through Sam.gov.
Federal procurement is bolstered by the Federal Procurement Data System (FPDS). This database is an authoritative source of recent procurement information – it does not offer applicable requests but provides data surrounding past awarded solicitations. USASpending.gov, another data site, is a consumer of the data found in the FPDS, so it is crucial to note that FPDS data will always be more up-to-date, and any discrepancies between the two should defer to the FPDS.
Most states have developed state contracting portals that list the various state government procurement requests and source manufacturers and vendors for their services. These are often called “e-procurement portals” or “e-portals.” Typically, state procurement services are operated by a Division of State Purchasing, an Office of Procurement and Contracting, or the state’s Department of Administrative Services.
When going through the government procurement process, the state will operate based on different price thresholds:
- The higher the anticipated procurement price
- The more competition
- Requests for quotes
- Administrative functions the process will require
Most states differentiate three thresholds. The first has no competition requirements, and the last (the costliest solicitations) requires an open bidding government procurement process with three or more quotes. Local governments exhibit the most variety in their procurement methods. They can provide their e-procurement portals and offers of solicitation there or publish their local procurement needs on the state database as a local solicitation.
State databases offer state-wide contracts to all state agencies; local solicitations only apply to the stated or relevant agencies. Local governments must provide public notice and award competitive public spending contracts for projects worth over $100,000.
Procurement Bans
Government procurement processes—at the federal, state, or local level—have never been banned. A municipality, state, or nation has never been barred from procurement. A specific contractor can be barred from solicitation with local, state, or federal governments. Any of these entities could also ban other local, state, or federal governments from contracting with one another.
For instance, San Francisco prohibited procurement exchanges with 30 states that defied the city’s values. These banned states had laws that undermined LGBTQ, voting rights, and abortion access. However, the blockade did San Francisco more harm than good, as it spent millions more to contract more expensive Californian vendors and contractors for projects rather than cheaper companies out of a state like Nevada. The city removed the ban last April.
The journey of procurement is one of constant change, adapting to the needs of governments and businesses over time. By understanding where it all began and how it has evolved, we gain valuable insights that can help us navigate today’s complex government procurement processes. Whether you’re well-versed in government contracts or just starting to explore the possibilities, we’re here to help. If you have any questions or need guidance with your procurement efforts, feel free to reach out. We’re ready to support you in making the most of your opportunities and driving your business forward.
