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More Than Calculators and Red Tape: Why Schools Should Pay Attention to Procurement

By Stephen Sawchuk — September 24, 2019 8 min read
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Finally—at last—there seems to be a research consensus that, yes, school spending matters, that more is better for students than less, and that effectively spending it is one of school leaders’ most important responsibilities.

So why, outside of a few specialized school business publications, does the related matter of school district procurement—actually buying things for schools—seem to come up so rarely?

“There are very few superintendents who understand how crucial procurement is. They don’t understand it, mostly,” said Steven Hodas, who worked to improve the process in New York City’s schools between 2012 and 2014. “It’s kind of the key to everything in a lot of ways. The market will only give you a solution as good as you pose the question. I’ve long said that your procurement person should be the smartest person in your organization.”

In the larger scheme of school spending, of course, purchases are a small fraction of the pie, making up about 20 percent of districts’ K-12 expenditures, according to federal data.

So a more helpful way to think about procurement officers’ crucial role is this: They touch nearly all of a district’s discretionary spending, as opposed to locked-in costs like salaries and debt servicing. And that doesn’t just cover the quotidian stuff like copy paper, cleaning supplies, and school buses. It also means the learning materials students interact with every day.

Ready to purchase that new reading diagnostic exam and curriculum? It’s your procurement team that turns your priorities into the language for the Request For Proposal.

Need to make good on a personalized learning promise? Procurement can help you make the high-stakes decision of which digital devices and faster wireless fit the bill.

Want better teachers? Procurement offices oversee the professional development and training contracts that make up an estimated $18 billion industry annually.

“I think the thoughtfulness you put into the procurement process really matters,” said David Bein, the assistant superintendent of business services for the Barrington 220 school district in Barrington, Ill. “We have limited resources in public education, and when we have more requests for funds than we have available, how do you use the resources that you have?”

If you prefer the hard-knocks arguments for paying more attention to procurement, there are plenty of those, too. For something that usually doesn’t get a lot of attention, procurement is often at the center of the maelstrom when things go wrong, as recent examples attest.

The most-discussed item in a scathing 2017 financial review of the deep-in-debt Scranton, Pa., district was its failure, for decades, to re-compete a costly transportation contract. Former Chicago superintendent Barbara Byrd-Bennett was convicted and sent to jail for sidestepping the district’s procurement policy to award no-bid contracts in exchange for kickbacks.

Education Week decided to ask some top procurement officers for their insights into how to do the job better. Many are members of the Association of School Business Officers International, which represents a big bucket of school finance employees and experts.

What are the biggest obstacles to overcome? What is the difference between being a superb procurement officer and merely doing an adequate job? What are some of the techniques to hit the sweet spot of good quality and low pricing?

Here’s what they told us.

Know the rules, and the work-arounds, too.

Procurement is complex. States generally set threshold amounts above which contracts and services must be competed through a sealed-bid process, and below which they can be secured through more informal methods, like written or verbal quotes. Not surprisingly, states’ thresholds differ markedly from one another, and from federally set spending limits.

In Illinois, for most school items, costs above $25,000 trigger the bid process. In Pennsylvania, it’s $20,600. In Texas it’s $50,000, and Nevada, after a recent legislative fix, just raised its to $100,000. The federal threshold? $250,000.

On top of that, local school boards add their own rules and policies, often lower than even the state-set amounts. An extreme example occurred in Providence, R.I. where a recent report found that multiple approvals required for most purchases above $5,000 meant precious resources and services could take nearly two years to reach schools.

Even in less egregious cases, good officers learn to navigate the mismatch among layers of policy.

“If you have a controlling school district or a controlling state legislature, you’re going to have stuff that doesn’t match, and so I think that is a definite hurdle. It makes it inefficient,” noted Karen Smith, the chief financial officer of the Cypress-Fairbanks district near Houston.

Sometimes those issues stem from rules that have ossified over time. Pennsylvania law, for example, gives school boards the power to sign off on any purchase above $100; that figure has sat on the books, unchanged, since 1949.

Smart districts have adapted. The school board in Upper Moreland, Pa., permits the district’s chief financial officer, Matthew M. Lentz, to sign off on contracts above $100, but under the state’s bidding threshold. Then he submits periodic reports to the school board for accountability summarizing the purchases, “the logic being that it would get bogged down so much if everything had to wait for board approval,” Lentz said. “So that gives us the latitude to get the materials we need, and recognizes that there is a trust factor.”

In the hurricane-prone gulf area of Texas, districts have occasionally run afoul of the Federal Emergency Management Agency when they’ve sought to waive the procurement process to expedite recovery efforts after a natural disaster, Smith says. The work-around? Smart districts put out an RFP to secure recovery services long before hurricane season happens—just in case.

Procurement is relational.

The stereotypical image of a procurement office probably looks a little bit like how we tend to picture the IRS: dim lighting, spreadsheets, and timelines on white boards. In fact, much of the job is actually relational, explains Andrea Sullivan, the director of procurement and contracts for the Washoe County district in Nevada, whose work has helped the district win many awards from the National Procurement Institute.

Keeping in touch with vendors can be especially important for small, rural areas where there are a limited number of vendors, and as economic factors change the contours of the marketplace, she says.

One of Washoe County’s largest procurement challenges has historically been getting enough bids for construction. A building boom in Nevada followed by an epic crash during the Great Recession that wiped out dozens of construction companies has led to a hotly competitive construction market now that the economy has improved.

And school district construction isn’t typically at the top of vendors’ lists. It requires people to work funny hours, like in late afternoons or summers, when students have gone home. That can make the contract potentially unattractive.

“We’ve really tried hard here to solicit feedback, and figure out if you’re not participating, why aren’t you participating? What could we do to make our work more interesting? What could we do to get you to consider bidding?” Sullivan says. And it’s led the district to be more flexible, like extending the timeline for completion of the work so that a contractor can juggle several jobs at once, she said.

Her colleagues in procurement concur that relationships matter.

“People who do this well have a network they can tap to understand what’s going on,” said Bein of Illinois. When he attends professional association meetings, he makes a point of chatting up the vendors in the exhibit hall for intel.

“It’s not every day that you’re going to have to put in turf for a stadium, or bleachers, or buy lockers ... but I personally spend a lot of time chatting with people there,” he says. “There are those I’ve done business with in the past, and others selling things I know I don’t need now. But now I know something about it, so [later], I can speak with some level of confidence in initial conversations. And I also have someone I can call to get additional information.”

And when it’s finally time to get those bids for stadium seats? “I’ve been able to get a good product,” he said.

Innovation is tough, but it’s not impossible.

Procurement is largely a risk-averse business, as even the top officers acknowledge. Public procurement rules formalize relationships in odd ways, which can stand in the way of creating tailored responses to problems, particularly in the technology realm.

The well-publicized meltdown of Los Angeles Unified’s 1-to-1 iPad initiative, in 2014, was in retrospect an object lesson in how an economies-of-scale solution didn’t mesh well with the curricula teachers actually needed to support their lessons. But it’s difficult to iterate an innovative solution through a process that frowns on, and some cases proscribes, contact between the purchaser of a service and companies that offer them.

In Texas, Karen Smith says her district increasingly uses a Request For Qualifications—less formal than an RFP—when it needs help piloting new technologies to decide if they’re a good fit. It’s a win-win in that the district isn’t committing long-term to a service, while bidding companies get the chance to develop coveted relationships within the district.

Many of the procurement officials also are active in efforts to rewrite some of the stodgier bits of their states’ laws. In Illinois, for example, David Bein wants the state to introduce more flexibility into its food service. In that state, it’s strictly run using low-bid criteria. It’s time for it to recognize quality factors like taste and variety, he said.

Hodas, the former New York City official, thinks the field still has a ways to go on innovation. But he does sees progress.

“It’s not a question of did you get the best price, which is a conventional way of thinking of a good outcome,” he said. “It’s, ‘Did you frame the problem correctly?’ ”, and then a couple years down the road, does the solution that you ended up with solve the problem that you wanted it to solve?”

A version of this article appeared in the September 25, 2019 edition of Education Week as Procurement Is More Than Calculators and Red Tape

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