The Fairfax County Department of Procurement and Material Management (DPMM) is a full-service department supporting the largest county in Virginia. Procurement staff provide the County Government with overall procurement and material management support and assist Fairfax County Public Schools with contracting, procurement and property management accountability.
As a full-service procurement department supporting a large county, the Contracts Division staff can’t be experts in every category they procure. Historically, they have lacked readily available market insights like benchmark pricing, cost structure, market structure and market share.
Some projects involve categories where competition is scarce or the major vendors are private companies, resulting in a shortage of information. They also encounter certain markets that present unique challenges. For example, the department generally relies on the Consumer Price Index (CPI); however, that is not the ideal indicator for goods and services with unstable prices and the index can be inconsistent with local markets.
On top of all that, end users often come to procurement with an uninformed view of the goods and services they need. The Contracts Division staff must be able to have objective dialogue about procurement strategies, supported by accurate data, to decide on the best approach.
Overall, the department strives to provide valuable insight for its stakeholders and is always looking for opportunities to enhance its value proposition by providing solid category information prior to going into a market.
ProcurementIQ - A Market Intelligence Solution
A couple of years ago, the department engaged with ProcurementIQ and was interested in exploring the market intelligence solution. With over 1,000 category reports on nearly every indirect product and service you can imagine, the department had strong expectations on how the team could benefit from a reliable and accurate resource like ProcurementIQ’s market intelligence.
Real World Success
The County’s police department was interested in a pilot program for body-worn cameras. They approached the procurement department, where staff quickly realized this was an emerging market and one in which they had no experience. Police department staff communicated to the assigned contract specialist about a single supplier – it seemed they had made their decision prior to approaching procurement. However, using ProcurementIQ’s report on body cameras, the contract specialist clarified that there are several major players in this space, ensuring the County sought competition as required by law.
Another key takeaway the contract specialist found in the body cameras report was the fact that they would likely receive promotional pricing from the vendors as incentive to come on board. This makes it difficult to understand the cost and budget impact of a full implementation.
Beyond that, and perhaps most importantly, the report prompted the contract specialist and the department’s leadership to ask critical questions about total cost of ownership they might not have asked otherwise. They discovered that the bulk of the cost of body camera programs is in data storage, not the actual cameras. Without the ProcurementIQ report, the County could not have projected all cost elements associated with a full implementation.
While vetting this project, department leadership was involved in meetings with senior County executives.
Public Transit Services
Fairfax County DPMM also leveraged ProcurementIQ’s custom research services (CustomIQ) on a public transit services project. Transit services is the County’s biggest contract with a lifetime value of over $1B. While the County owns the buses and the maintenance garages, all of the management, operations, drivers and administrative services are provided by contractors.
It was important for procurement staff to understand the major vendors that provide public transit services, plus those companies’ cost structure. They were also looking for benchmark prices, pricing trends and key price drivers to help them discover possible areas for negotiation. ProcurementIQ created a custom report, laying out all of these elements and more, so Fairfax County procurement staff could spend taxpayer money efficiently by securing the best contract terms possible.
Other ProcurementIQ Benefits
- The team is consistently pleased with the quality and breadth of ProcurementIQ’s information. They find the reports reliable, comprehensive and current. The ability to pair the ProcurementIQ data with other market research and contract results from other peer jurisdictions positions the County to secure the best pricing, terms and conditions when establishing new contracts.
- The department’s ProcurementIQ membership means they can easily share information with program staff outside of the department. For example, it is not unusual to periodically pull reports to send to the Department of Public Works and Environmental Services senior staff to support County environmental initiatives in waste management and recycling.
The Fairfax County Department of Procurement and Material Management understands that market intelligence is one way to enhance the department’s value proposition to the County and community and fulfill its role as a strategic partner to its customers. The department’s leadership constantly challenges staff to source smart, understand what they’re buying, realize what’s changed, write the best possible solicitations (meaning: don’t just reissue old ones), and challenge the status quo. Overall, ProcurementIQ has been an important investment for them.
Sign up to our newsletter
Labor Shortage News for 5 Key Markets
Labor shortages are spreading across the economy, driving salaries upward and inflating end prices for many goods and services. Read up on five markets that are currently being impacted and unpack the effects on the Call Center Services market with one of our analysts.
Webinar: Turning Insights into Actions that Transform Procurement's Impact
Philip Ideson, Kelly Barner and Helen Mackenzie of Art of Procurement demonstrate how procurement can use category specific information to inform their sourcing and negotiation strategies without slowing the business down.