Volume 3, Number 2, 2003

CONTENTS

Assessing Federal Procurement Reform: Has the Procurement Pendulum Stopped Swinging? ........................................... 145
J. A. Pegnato

Managing the Italian Healthcare System: The Viewpoint of The Purchasing and Marketing Office ........................................ 176
E. Vagnoni

A Review of State Procurement and Contracting ..................................................................................................................... 192
J. R. Bartle and R. L. Korosec

The Use of Qualifications-Based Selection on Public Procurement: A Survey Research ........................................................ 215
Y. Qiao and G. Cummings

Procuring Expertise: The Case of Local Government Water and Sewer Rate Analyses .......................................................... 250
G. A. Gianakis and X.-H. Wang


USEFUL REPRINTS

VA and Defense Health Care: Potential Exists for Savings Through Joint Purchasing of Medical and Surgical Supplies ....... 275
U.S. General Accounting Office


BOOK REVIEW

The Procurement Revolution ..................................................................................................................................................... 287
R. Nyhan

ABSTRACT. The Department of Veterans Affairs (VA) spent $500 million and the Department of Defense (DOD) spent $240 million for medical and surgical supplies in fiscal year 2001. Since the 1980s, to achieve greater efficiencies through improved acquisition processes and increased sharing of medical resources, VA and DOD signed a memorandum of agreement in 1999 to combine their buying power. VA and DOD saved $170 in 2001 by jointly procuring pharmaceuticals, by agreeing on particular drugs to be purchased, and contracting with the manufacturers for discounts based on their combined larger volume. VA and DOD have not awarded joint national contracts for medical and surgical supplies as envisioned by their memorandum of agreement, and it is unlikely that the two departments will have joint national contracts for supplies anytime soon. However, a few VA and DOD facilities have yielded modest savings through local joint contracting agreements. The lack of progress have made in jointly contracting for medical and surgical supplies has, in part, been the result of their different approaches to standardizing medical and surgical supplies. Other impediments to joint purchasing have been incomplete procurement data and the inability to identify similar high-volume, high-dollar purchases.

ABSTRACT. Are states effectively managing contracting and procurement activities? Are they striking the right balance between central administrative control and empowerment through delegation? How effective is training and monitoring? How do these practices compare to the principles of best practice? What role will information technology play in the future for procurement and contracting? As part of the Government Performance Project, budget, procurement, and contracting managers in 48 states were surveyed, providing descriptions of their procurement and contracting practices. There are numerous developments that speak to the practical details of contemporary public management. Five key findings are (1) information technology needs are challenging states, with some responding well, but others struggling, (2) in most states staff training needs to be improved, (3) restrictions prohibiting "best value" purchasing need to be removed, (4) states can learn from and improve practices by partnering with other governments and private organizations, and (5) most states use a hybrid of both centralized and decentralized management structures when it comes to contracting and procurement.

ABSTRACT. Local governments are often forced to purchase expertise for non-recurring analyses, such as rate setting for water and sewer services, because it is not cost-effective for these governments to maintain such expertise in-house or because independent analyses are preferred by watch-dog agencies or mandated by state statutes. However, like many ostensibly value-neutral analytical studies, these studies inevitably entail policy choices of which electedpolicy makers may not be aware. External analysts may not be aware of idiosyncratic factors, and they apply boilerplate perspectives that may not be responsive to local preferences. These perspectives limit policy options, although they may appear to be value-neutral. Policy makers must take an active role in these analytical studies in order to ensure that local preferences and specific factors are considered. Citizen committees comprised of residents with the necessary expertise, or experts from local colleges and universities may be able to provide the necessary oversight.

ABSTRACT. Beginning in the early 1990s, reform of the Italian Healthcare Service (NHS) led to a controlled competition system. Consequently, managers had to face a new institutional framework, one which was characterized by the following elements: citizens' choice of the healthcare organizations to deliver the services they need; the integration of public healthcare organizations' supply with private accredited organizations; the distinction between producing and purchasing organizations. Consequently, management of the purchasing and marketing functions can have a key role in the new situation. By presenting an analysis of national, regional, and local regulations and case analysis, this paper points out the main aspects concerning procurement policy in the Italian NHS. The implications for the internal market mechanism, the Purchasing and Marketing office's role, and the activities implemented in order to contribute to a wide range of decisions are considered.

ABSTRACT. Public agencies have started to shift away from the traditional lowest responsive and responsible bid to other approaches in purchasing certain items and services. These alternative approaches emphasize the quality of the products and the qualifications of the vendors. The purpose of this article is to explore the use qualifications-based selection (QBS) and other non-traditional source selection methods in public procurement processes. An online survey was sent out to 1665 members of the National Institute of Governmental Purchasing, and a mail survey sent a random sample to 300 American Public Works Association members. The survey results show that while the traditional lowest responsive and responsible bidding is still the dominant selection method when all procurement is considered, QBS and other non-traditional methods have gained wide acceptance and use in public agencies, especially for the purchase of professional services and information technology.

ABSTRACT. Nearly $200 billion a year is funneled through the federal procurement system to buy everything from paper clips to stealth fighters. This procurement system can be thought of as an oscillating pendulum as it swings from one extreme of unresponsiveness to mission needs to the other extreme of hypersensitivity to mission. Out of a sense that the procurement pendulum had swung too far towards overregulation, two major procurement reform laws were passed: the Federal Acquisition Streamlining Act of 1994 and the Clinger-Cohen Act of 1996. Many observers suggest that these two laws have led to a revolution in the way the government buys. Are these reforms permanent? The view here is they are not because of various political forces.

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