Procurement processes required under state and federal law, and regulations are inherently valuable internal controls that help ensure that a school district will obtain the best value in procuring various goods, services and contracted labor. Competitive procurement processes also help ensure a more level playing field for vendors that are interested in doing business with a school district, and should help minimize the potential for favoritism towards a select few vendors. An appreciation of the economic benefits of obtaining the best value motivates school officials to pay especially close attention to the procurement process leading up to the contract award, not to mention a healthy fear of legal and financial consequences if there are violations of state and federal law and regulations. However, to ensure ultimate success in their procurement processes after contract awards, a district must pay close attention to vendor performance and follow best practices in contract management.
A particularly vexing issue for certain districts, speaking of one area of contract management, has been the frequency with which vendors have delivered items that don’t meet the entire set of specifications in the district’s request for bids, proposals or quotations. Certainly some issues are to be expected when one considers that non-payroll expenditures by school districts, covered by tens of thousands of individual contracts, total over 15 billion dollars in the aggregate per year. In a few worst case scenarios, school districts have discovered that the best value would have been delivered by another vendor that was ranked second or third in the bid tabulation process.
These kinds of issues call for the implementation of a standard process in a school district to verify vendors’ representations that a proposed substitution is equivalent to what was specified by the district. It is definitely a problem if a district appears to be abdicating its discretion by primarily relying on vendors’ verbal claims that xyz brand and specification are sufficiently comparable to fulfill the school district’s needs. In worst case scenarios, referral of issues to an attorney are warranted when the frequency of substitutions by vendors effectively begs the question, “Has the vendor effectively negated its contract with the district?” A district should work closely with an attorney in worst case scenarios that may lead to cancellation of a contract, and award to the next best vendor offer or perhaps initiating a new competitive procurement process.
Districts should consider assigning certain contract management issues to a single employee or office in order to provide consistency in addressing vendor performance issues and to provide adequate segregation of duties between the vendor, and the department or office that initiated the procurement. In summary, districts need a documented standard protocol for monitoring vendor performance, and for addressing changes and substitutions that may be proposed by vendors to help ensure that vendors deliver products, goods and labor that mirror as closely as practical the district’s expectations, in accordance with contractual terms, conditions and specifications.