January 2010
Issue Map
The Public Manager

Strategic Procurement Training in San Diego

Saturday, January 16, 2010

During my morning stops at Starbucks to buy a latte, Ive observed how this company launches new products, flavors, and drinks with cohesion. New drinks are not launched in isolation; staff members are quick to recommend the latest drink when you arrive at the counter, and there are complimentary food items and related products on the shelves.

Launching new products may seem straightforward in the commercial world, but it is still fairly novel to the public sector. Public agencies often fail to apply these types of ideas when launching a new strategy, which leads to a lack of cohesion of internal support functions and, more importantly, contracting functions.


More often than not, the contracting function remains separate from the strategic priorities of a public agency. When treated as a static area of the organization, great contracting opportunities to impact the health, safety, and wellbeing of individualsand the community, as a wholeare missed. This can cost our organizationsand our communitiesmuch more than the price of a latte.

Training Strategically at HHSA

Using the contracting process to promote strategic outcomes is no different than Starbucks aligning its drinks, products, staff training, and marketing initiatives. This sort of cohesion has multiple benefits.

The contracting process is a powerful tool for engaging community partners and expanding the impact of your agencys strategic goals. Recognizing this lost opportunity, the County of San Diego Health and Human Services Agency (HHSA) has adopted a strategic approach to procuring services, evaluating proposals, and training staff in contracting techniques.

HHSA is comprised of public, physical, and behavioral health services, as well as social and protective services. Typically, these services are provided through multiple HHSA divisions and regions via contracts with community-based vendors. HHSA maintains a portfolio of approximately 900 contracts totaling nearly $413 million annually.

With such a large amount of services being provided by contractors, HHSA recognized the need to ensure that its strategic plan was guiding not just internal programs, but also contracted programs. As a result, HHSA developed a single, one-page strategic plan referred to as the HHSA Strategy Agenda to provide cohesion and highlight opportunities that integrate services from various disciplines for seamless delivery to shared clients.

Designing a Performance-Based Contracting Course

For a strategic thinker, the contracting process can feel like chains weighing down opportunities for change, innovation, and creativity. For a contracting staff member in a public agency, strategic planning can feel ethereal, too expansive, and disconnected from day-to-day business operations. While neither impression is totally accurate, it is important to acknowledge that these perceptions exist and can stand in the way of leveraging the contracting process beyond simply acquiring a service or good.

HHSA began its efforts to align and integrate the contracting process with its strategic plan through a training course in performance-based contracting. The topic explored the link between HHSAs strategic plan and the outcomes selected for a contract. Notably, the contracting office and strategic planning office collaborated to develop the curriculum.

The course development process involved two-way education from staff in each discipline to bring content together. Course designers talked through some pointed questions to ensure creativity and flexibility and provided staff with concrete steps and items for analysis and consideration.

The result was like an extra shot of espresso in the contract training curriculum. Previous education efforts had focused on the contracting process alone, explaining in a one-dimensional manner how staff should follow specific contracting rules and practices. The new performance-based course integrated general contracting concepts and steps as well as explicit actions and practices for analyzing and articulating how program goals tie to the HHSA strategic plan, ultimately including a strategic plan linkage in the contract.

Through the development of the course, HHSA saw how it could better leverage the contracting process to motivate contractors to align their proposals and service provision with HHSAs strategic plan. Managers saw that with guidance to staff, HHSA could mobilize its strategic plan in the community through a network of nearly 500 contractors.

Embedding the Strategic Template

Consider, for example, a contract to address gambling addiction, which is a growing problem in San Diego County. The contract needs to spell out conventional requirementsin this case, hours of services and the availability of a toll-free number for residents to call who need help. In addition, this sort of performance-based contract also needs to include outcome goals, such as treatment effectiveness (for instance, 60 percent of clients do not relapse within a certain time period). Ultimately, the contract must align with the strategic goal of providing quality treatment and care to improve health and reduce dependency on public resources.

Based on the success of the collaborative development of the performance-based contracting curriculum, HHSA continued to embed content from the strategic plan in other contract training efforts. This approach expanded beyond classroom curriculum to include

  • contract training content

  • contract forms and template for staff use

  • standard measures of contract process success

  • contract agreements.

Educating Staff

After its initial success with launching the contract training, HHSA saw how it could link the strategic plan throughout the contract procurement and management process. Developers continued building course content to include material about incorporating strategic plan goals into each step of the contract process. This provided cohesion between one of HHSAs bigger business processes and the strategic plan.

One training area that this tie has been especially useful is procurement and contract development. This is where staff must understand what HHSA calls the pitch: What is it that HHSA is working toward through the strategic plan? How do individual staff members take that information and relay it to organizations interested in submitting a proposal for a contract? HHSA needed resources to support the staff in delivering an integrated pitch.

Including the Strategic Plan

The procurement development phase is when you draft the request for bids or request for proposals, which describe services are required, outline specific time frames, and detail and standards or performance requirements. HHSA needed to provide staff with training and tools to explain what services HHSA needed in the procurement process, as well as create a link between the services and priorities and outcomes reflected in the strategic plan.

HHSA developed a new format for its proposals that integrated two formerly separate documents:

  • the description of services wanted

  • the description of verifications and information needed from the interested organization to demonstrate its qualifications.

This new template was put into practice slowly, but increased in use as more staff members shared their successes with their peers. The template provides guidance for sections required in the procurement document, including the link to the strategic plan.
For example, in procuring Domestic Violence Services support rather than telling interested organizations specifically what their programs needed to do, HHSA asked them to explain how their approach to service delivery would further the strategic goal of protecting children, families, and vulnerable adults from dangerous conditions. This was an important shift for HHSA; it moved from telling contractors what to do to engaging contractors as participants in achieving the goals of the strategic plan. The structure developed during this procurement became a part of HHSAs organizational template.

Handling Responses

After trying this new procurement format, HHSA realized that it needed some complimentary items to further assist staff. For the new format of procurement proposals to be of value to HHSA, staff needed to discuss and decide in advance how to evaluate responses. Clearly, staff needed to incorporate development of evaluation standards into the procurement planning process much earlier than previously.

Consider, for example, how HHSA requested and evaluated information about an organizations community partnerships. The importance of building and maintaining community partnerships has long been recognized as an HHSA strategic objective. In the past, it was incorporated into procurements by asking respondents to submit documentation about their community partnerships, which often resulted in a batch of freshly printed memoranda of agreement (MOAs) delivered with the proposal.

While this approach provided a level of confirmation that the potential contractor was connected with other organizations in the community, it did not truly answer the question about partnership. To further complicate things, it was not possible to evaluate the depth of the partnership when comparing various proposals. Reviewers could see how many MOAs were submitted, but could not evaluate whether the organizations worked collaboratively on previous efforts, if goals were achieved, and the depth of commitment between agencies.

One of the first procurements for which HHSA used this technique was Healthcare Safety Net Services. A certain level of partnership and commitment was very important for contractors to meet the goal of using innovative approaches to link physical health resources for the most-needy populations. HHSA began discussions while drafting procurement documents on how to evaluate community partnerships to ensure alignment with strategic goals and clarify review criteria for responses.

Because the procurement was still in draft, staff members were able to review, edit, and strengthen the language within the requests to clarify for interested organizations what HHSA wanted to know about their partnerships, as well as how they could demonstrate it to HHSA. They also developed standards for ultimate use in reviewing proposals. Both the language in the proposal and the evaluation standards supported the strategic goal, and did so in a meaningful way.

Negotiating What HHSA Really Wanted


HHSA has even expanded its link to strategic priorities during the negotiation phase. The new contract negotiation training included instruction on how to measure the success of negotiations. In developing steps for measuring success, HHSA realized that a successful negotiation must be related to the HHSA strategic plan, as well as components of the specific deal.

Historically, contract negotiations were evaluated informally, and ratings were based on characteristics that were chosen after the negotiation was complete. Often, those characteristics only related to the specific contract in question. While those components are important, general evaluation facets were needed to measure the full impact of the process. HHSA needed to measure how the outcome of the negotiation affected the individual contract, as well as HHSA strategic goals.

For example, if the strategic objective is to increase the use of technology in service delivery, program managers may choose to focus on gaining agreement on increasing the contractors web-based service delivery methods. This strategic objective may also impact what is a reasonable price. Without aligning negotiation points to priorities, the contract may have focused solely on price rather than web-based service options.

Pairing Metrics

With the development of the negotiation course, HHSA developed a set of standard strategic plan-related negotiation metrics that staff must pair with deal-specific metrics. These strategic metrics are an important part of the infrastructure needed for HHSA to reach its strategic goals.

Consider again the example of community partnerships. Because the success of HHSAs strategic plan is strongly tied to working in partnership with other community organizations, it recently incorporated a measure of impact on the relationship into negotiation metrics.

When evaluating outcomes of any negotiation, staff members are asked to assess what impact the deal has had on relationships with the other party. All negotiations, whether or not a deal is reached, should end with a positive working relationship that will enable future collaborations or contracts. If the negotiation is conducted in a way that HHSA gains mechanical advantage (price, timeframes, and so forth) at the cost of a future working relationship, then the success of the negotiation is in question. HHSA would not have enacted this negotiation metric without a connection between contracting and strategic planning disciplines.

To compliment training and make it easy for staff to link contracting and the strategy agenda on a day-to-day basis, HHSA created templates and tools to guide users through a variety of contracting processes. Templates include built-in prompting questions and guidelines that incorporate goals of the strategic agenda.

One example is the HHSA Negotiation Preparation Worksheet. The worksheet has the organizational negotiation success metrics pre-loaded and includes space to add situation-specific metrics and other preparation steps.

Generating Repeat Business

Why do I continue to visit Starbucks? It isnt just my need for caffeine. I have a good experience as a customer and can rely on the same service each morning: The store is clean, the staff is friendly, the drinks have a consistent taste, and the service is quick. In a similar way, HHSA wants its residents and funding sources to have a good experience with services. To generate positive repeat business, strategic priorities must drive services. As a major support functions, contracting can be a powerful tool for any organization to meet its goals.

HHSA took one step at a time toward fully connecting the contracting process to strategic goals. As contract training grew from a single, performance-based course into a collaborative effort with the strategic planning, HHSA wanted to make it easy for staff to connect the organizations strategic goals to day-to-day contracting activities.

Achieving Bottom-Line Results

Do public managers need to think with such granularity? Yes. Details matter. Public agencies have enormous responsibilities that impact the lives of individuals. To make sure the impact is positive, let strategic objectives guide you. To achieve goals, an organization cannot apply the strategic agenda to some pieces of the operations, but not to others.

Success is not determined solely by the services delivered, but also by how those services are acquired, managed, and delivered. Public agencies cannot expect to engage and activate the community without walking the walk. If a strategic goal focuses on partnerships within the community, but negotiation concludes with ruined relationships and one-sided deals, how much confidence can that organization have in the agencys values?

HHSA has started to embed its strategic plan and goals into the contracting process. Doing so has enabled the organization to learn from the process and to clearly identify supportive tools it needs for staff to put ideas into action. HHSAs experience has been that once changes started, momentum and excitement grew among the team members, and peer-to-peer endorsement of the new approaches and tools has enabled this practice to grow across the agency.

On the whole, linking strategic goals to contracting has had a positive impact on procuring services and has expanded staff member focus. Embedding strategic priorities into the process has made it seamless for staff to advance strategy in their day-to-day work. It also promotes engagement among staff members who now experience concrete examples of how their work supports the agencys strategic goals.

To be sure, wisdom and innovation can come in surprising formatswhether it is the contracting process or ones morning latte. Government agencies have an opportunity to achieve a greater impact on their communities by dynamically connecting acquisition initiatives to a broader set of strategic priorities. In this way, services will align with an agencys strategic vision, as well as public expectations. This consistency and follow-through will resonate favorably with stakeholders and position the organization as a leader of choice.

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