We all know the story, the one about the high-risk project that gets added to your task list: the project that attempts to achieve more than is reasonable for a budget that is probably less than reasonable; the project that requires you to work across departments to deliver something that will affect systemic change; the project that can make or break your career.
And did we mention that there isn’t really a prescribed scope, assigned resources, or project guidelines yet? That there isn’t any “how to” manual describing the experience of others? That another senior executive and your CIO are already trying to “help” by giving you the names and numbers of potential suppliers or software application companies?
It’s the project that gives you the sinking feeling in the pit of your stomach, the DFF (the doomed-for-failure) project that has your name attached to it like a bug to flypaper.
So, what to do? How can you task your people to either make it a success or give you the ammunition you need to convince your boss to cancel or change the scope of the project? What piece should you be looking for from procurement? The answer lies in obtaining a risk management evaluation.
First, a caveat: as a government executive well versed in your responsibilities, you probably already know about risk management. You will be surprised, however, to find that only five to 10 percent of public procurement departments actually do risk management. Be prepared for pushback when you ask for it. Know, however, that by requiring risk management evaluation from procurement you’ll get important risk factor information that you may not get from any project partner.
What to ask for
There are two types of risk management evaluation. The first covers the procurement process: does the process ensure that there will be fair/open competition? Does it follow best practices in RFP process management? Does it identify and cover off all the applicable governing public policy? Does it have a documented evaluation process?
The second governs the content: are the requirements as defined by the user group reasonable? Or are they unduly restrictive or favouring one vendor over another? Are the specifications clear and concise enough?
Where to start
Fortunately, tools have been developed to deal with this issue. Risk management is an accepted procurement discipline in Australia where there are policy manuals on when to develop a probity plan, the Australian term for “uprightness and honesty.” It turns out that projects with a high degree of probity are low risk! There are also documents that identify the detailed steps you should build into your procurement process to insure it is low risk.
Documents and links
Doomed-for-failure projects are not inevitable. Yes, there are many aspects that need to be managed other than procurement. However, using risk management procurement evaluation tools will significantly reduce the project’s DFF likelihood. They will also provide you with documented evidence that identifies high-risk areas that need to be addressed.
Whenever we are advising executives about risk management and procurement, we refer them to Ethics, Probity and Accountability in Procurement, a 29-page guide that deals with management of key areas of procurement risk.
When we’re managing a high-risk, high visibility RFP, or acting as a fairness officer, we develop a risk management plan. In doing this, we often use a template, Procurement Conduct Plan – High Risk. This template provides advice “on conducting a minimum risk” procurement.
Finally, another tool that is also helpful in identifying risks is Risk Assessment Tool, a series of 27 questions that are translated into a risk rating. Some of the questions include: to what extent has the government made announcements committing to the tender? What investment is expected on the part of each tenderer in submission of the tender (e.g., in money and time from initial engagement until contract award)? And how likely are members of the project and evaluation team to have previous or existing social or professional relationships with any of the prospective tenderers?
Michael Asner is an independent consultant specializing is public procurement (michael@rfpmentor.com). Sharon Sheppard is a freelance writer and editor and provides research services on policy issues (sharons1963@me.com).
Further information:
Ethics, Probity and Accountability in Procurement is available at: http://www.qgm.qld.gov.au/00_downloads/bpg_probity.pdf
Procurement Conduct Plan – High Risk and Risk Assessment Tool are available at the Victorian Government Purchasing Board website: http://www.vgpb.vic.gov.au/CA2575BA0001417C/pages/home
