At the end of this post, you will find a copy of a letter dated July 20th, 2016 from Periscope Holdings Inc. CEO Brian Utley, under the heading Protest of Solicitation No. ADSPO17-00006413; Electronic Procurement Solution.
Periscope is challenging the State of Arizona’s decision to issue an RFP for an “Electronic Procurement Solution.” Here is the link to the State’s Bid Solicitation; https://procure.az.gov/bso/external/bidDetail.sdo?bidId=ADSPO17-00006413&parentUrl=activeBids
Over the coming weeks, I will delve deeper into the letter’s contents, and what it means relative to Arizona’s desire to look for an alternative to Periscope’s BuySpeed offering. It should be noted that Arizona has been using the BuySpeed platform since 2009.
However, and while I want to stress that I have considerably more research to do, after a preliminary read of Mr. Utley’s letter, I will share with you my initial or gut reaction.
What Goes Around . . .?
To start, I could not believe what I was reading . . . is this the same Periscope who tried to leverage their relationship with the NIGP to challenge the Missouri contract award? In this regard, points 1 and 2 of Mr. Utley’s letter in particular, jump off the page.
By the way, you can read my coverage of the Periscope NIGP #CodeGate story through the following link; NIGP #CodeGate.
The two posts you will want to initially focus on are December 11th, 2014 – Up Periscope? Examining Periscope’s acquisition of BidSync with a “Survivor’s” eye and, March 31st, 2015 – Periscope Protest Letter Highlights Their Reasons For Challenging Missouri Selection of Perfect Commerce.
Private Versus Public Sector
I do not believe that this kind of protest would wash with a private sector client.
I am not talking about the actual process itself, or for that matter whether or not a vendor would have the right to protest the issuance of an RFP. What I am talking about is the business sense to pursue this course of action.
Besides sounding like sour grapes, the letter comes across as a company trying to bully a state into using their solution. It is as if Periscope doesn’t (or doesn’t want to) recognize the right or expertise of the state’s procurement people to make decisions or pursue courses of action that they feel is in the best interest of the state as opposed to the vendor’s.
Am I missing something here?
An Absence Of Arrogance
Although I have never really encountered a situation in which a vendor challenged the actual issuance of an RFP before now, the tone of the letter seems to be void of the usual vendor arrogance. Specifically the palpable, underlying sense that the vendor believes they know what is best for a public sector entity.
I can’t quite put my finger on it at this point, but there is definitely something different here. Makes one wonder how well Periscope has done in terms of both landing and maintaining new clients, and what the loss of Arizona would potentially mean to the company’s future prospects.
In Conclusion . . .
There are of course other elements to this story that are just now starting to come through, but at this point, this is my take.
Stay tuned for more updates.
In the meantime, here is the Periscope protest letter:
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colincram
July 27, 2016
This needs careful scrutiny.. The indemnity insurance requirements do look onerous for small and medium sized companies, so Periscope may have a fair point when it states that the RFP is discriminatory against such businesses. Major companies will already have huge levels of insurance. Smaller companies will have to purchase such high levels of insurance indemnity .specially for this tender. That would be prohibitively expensive for most and prevent them submitting a competitive bid. It does therefore look as if this could be a device to ensure Periscope cannot bid – in which case it is a sledgehammer to crack a nut. I haven’t the time to go through the RFP and Periscope’s letter in detail, but it is possible that there may be other discriminatory elements. Arizona should review the RFP and in particular the rationale for particular levels of insurance, whether they are commensurate with the risk and under what circumstances legitimate claims could be made against them.
piblogger
July 27, 2016
Very interesting and relevant commentary Colin.
I also think that it opens up a much broader and needed discussion in terms of the differences between the public and private sectors.
For example, in the private sector, the decision regarding vendor selection is not restricted by the same rules or regulations that at times tie the hands of procurement professionals in the public sector.
Specifically, how would things be different if Arizona were a private sector enterprise as opposed to a public or government entity?
Let’s say that the relationship between the state and the vendor is strained or is not good.
How would a private sector client address this issue – especially if said strain meant that they wanted to make a change?
Under the same scenario, how would a public sector entity deal with this?
This is the bigger, and perhaps more relevant question.
Thoughts?
colincram
July 27, 2016
The public sector should – and presumably does take the capability of suppliers and potential suppliers into account. Performance on existing contracts is a useful guide. However, before one selects a new supplier one must be sure that they can and will deliver what they claim to be able to deliver – and do it better than the incumbent – or at least as well. The grass isn’t always greener on the other side of the hill. Also, with any supplier – and this is where both public and private sectors often fall down, there must be robust and appropriate contracts management arrangements in place – and implemented. Poor contracts management is a major problem and often the arrangements stated in the contracts are at best half-halfheartedly implemented – or implemented at first and then staff are assigned to other activities. Sometimes contracts are let that are unimplementable because the organisation letting the contract is not structured in the way needed to allow the contract to work. This may not be the case here, but there is a tendency in public and private sectors to blame suppliers for one’s own failures.
It is also worth bearing in mind that changing suppliers can involve alot of work and can be expensive and disruptive. I have known businesses to build an estimate of such costs into the bid evaluation.
piblogger
July 27, 2016
Once again valid points Colin . . . as the saying goes, it takes two to tango.
Within the framework of your referenced mutual or shared responsibility for the success or failure of an initiative, relationships – the people involved on both sides – are critically important to the the outcome.
This is particularly true as eProcurement technology, through the advent of cloud-based solutions, becomes more commoditized. In other words, and like the personal computer evolved from its proprietary roots to a vanilla world where technological differences are minimal, the people behind the product and their ability to deliver services become increasingly important.
Technological differences, or what I have called the features, functions and benefits criteria are secondary to the ability of the stakeholders to effectively communicate and collaborate. If there is a breakdown in this key area, a provide’s or vendor’s technology will not matter.
So I go back to my previous question . . . what if – in this case the State of Arizona, does not feel that they can (or want to) work with Periscope.
Do they not have the right to seek an alternative partner?
Buyers Meeting Point (@BuyersMeetPoint)
July 27, 2016
I actually find the use of a formal protest letter as a channel of communication particularly illuminating for two reasons…
If the relationship was as important to Periscope as their letter suggests, wouldn’t they be more likely to pick up the phone and call Terri Johnson (the recipient addressed in the letter)? Although we can not assume that Periscope didn’t try this first, if they called Arizona and were not satisfied with the verbal response they received, did they really believe that a letter like this one would improve the situation? Instead, it makes their response look like undue pressure on Arizona to drop the RFP and renew their own contract… which brings me to my second point.
Periscope had to know that putting this in writing exponentially increased the chances of it being made public. And, now that it is available, it doesn’t reflect well on them to the casual observer, WHICH MOST PEOPLE TODAY ARE! Being from Boston, this reminds me of a saying from old-time politician Martin Lomasney: “Never write if you can speak; never speak if you can nod; never nod if you can wink.” In fact, Eliot Spitzer modernized his advice by adding “never put it in email.” Assuming this letter wasn’t delivered by courier or pigeon allows us to consider the possibilities that Periscope either didn’t consider the potential ramifications of its becoming public or didn’t care if it did. Ultimately circling us back to the the idea of relationships in business – some organizations get it and some just don’t.
Bertrand Maltaverne (@bmaltaverne)
July 27, 2016
Good points in previous comments!
My take on the letter:
I find the beginning a bit exaggerated as a Procurement organization can decide to go to market whenever it wants. Especially if a contract is reaching expiration. As stated in the letter, the contract will expire at beg. of next year so, you need to prepare for it. A way is to go to market. Another reason for going to go market is that a lot happened in Procurement technologies in the last years. Therefore, it may be a good opportunity to challenge / revisit past assumptions and see what the market has to offer. A professional Procurement organization uses TCO/TVO and includes switching costs into the decision-making criteria. Actually switching would only happen if, overall, there is a better way (although people have a tendency to think and assume that the grass is greener elsewhere…).
That going to market is not pleasing the incumbent supplier is another thing and not a surprise. I am not sure how transparent the whole process was. Going to market and including or not the current supplier in the RFP/Q can be an indicator of the level of satisfaction the Procurement organization has. As this case is in the public sector and that there are rules about making the process public, this is a bit different. As former Procurement guy in the private sector, I have often done RFP/Qs that were not just triggered by my satisfaction level of the current suppliers. Many things change on the markets (buy and sell side) and you need to always assess if you have the best sourcing option in place. For sure, if I were very unsatisfied by my current supplier, I would not include him in the process.
For the rest of the letter, I find that the changes in requirements are strange. Is it because of lessons learned, or because of a bias, or is it because the public sector is more risk-averse than the private sector (risk mitigation and prevention are embedded in Public Procurement processes as any failure as huge impacts: press, taxpayers, politicians…). Or is it just over-specifying…
As for the larger topic of responsibility of failures, my experience on both sides (Procurement and provider) makes me say that it is complicated and often a shared responsibility. Both sides are sometimes culprit of not going to the right level of details to speed up the process, by a lack of experience / maturity, lack of documented business case, because ignorance is bliss… Many factors. For sure, a typical root cause is linked to considering these projects as technical. They are not. They are about change management and business transformation. Both sides, for various reasons, have sometimes the tendency to consciously ignore that. It makes budget (look) smaller, projects (look) shorter, … Then, once the deal is signed, we will see…
A lot of Procurement organizations talk about value and relationships. But, few actually walk the talk. The relationship between a Procurement organization and a solution provider is a special one as you go deep into the way Procurement functions. The word intimacy is what comes to my mind. Trust, transparency, respect… are all elements that are needed to make it work. Be it in the private or public sector.
piblogger
July 27, 2016
I think that you hit the nail on the proverbial head Bertrand with the following:
“Trust, transparency, respect… are all elements that are needed to make it work. Be it in the private or public sector.”
The fact is, and as alluded to earlier, relationships drive success more than the actual technology.
And referencing a comment that Kelly Tweeted about CGI, referring to their failure in Massachusetts, relationships with the same company may differ from one project to the next. For example, CGI has been a part of the very successful eVA initiative for many years. It would be interesting to see who from CGI was involved with each one.
At the end of the day, I believe that while technology cannot overcome a bad relationship, a good relationship can definitely overcome technology challenges.
That said, the question that remains is simply this . . . does Arizona have the right to choose the provider with whom they want to work?
Bertrand Maltaverne (@bmaltaverne)
July 28, 2016
“relationships drive success more than the actual technology.”
“a good relationship can definitely overcome technology challenges.”
Very true, relationships are differentiators but cannot solve / fix everything. If the object of the relationship is “broken”, then no hopes it will somehow work; even with the best willingness from people involved.
“It would be interesting to see who from CGI was involved with each one.” ==> yes. But, it would as interesting to know what VA may have done differently from MA / AZ. Again, failures are often due to shared responsibilities. Maybe VA had a better approach, plan, case…
“does Arizona have the right to choose the provider with whom they want to work?” Sure, why wouldn’t they? Question is more: are they able to? Do they want to?
piblogger
July 28, 2016
Well said Bertrand . . . very well said!
Virginia certainly did take what was at the time both an innovative and revolutionary approach as outlined in my 2-Part Yes Virginia series back in 2007.
I will share the links to these posts with you momentarily.
The key is that the client must be the one to drive the initiative. Far too often clients will defer – for whatever reason- to the “expertise” of the provider.
The problem of course is that the expertise of the provider may be limited to a select few.
Let’s look at CGI as an example.
A number of years ago I was teaching a procurement course and one of the attendees – who was from CGI – came up to me to explain why so many eProcurement initiatives fail.
This individual stated that there was an “A” team at CGI and a “B” Team or Teams.
The A Team – which consisted of the top people in the organization, was used to win contracts.
As it was explained to me, once the contract was won, the A Team would transfer the implementation to the B Team, and then move on to win the next contract.
This is reflective of a longstanding provider mindset that you must win the business first, and worry about making it work later. Or as Richard Branson would say ‘If somebody offers you an amazing opportunity but you are not sure you can do it, say yes – then learn how to do it later!’
The challenge with this approach is that you need to have a solid relationship foundation in place. However, when a provider accepts business based on a deference of responsibility on the part of the client, they will not succeed. This is why it is critical for the client to be the driving force, with the provider playing a support role.
I also believe that this is what Arizona is trying to do . . . assume both control and responsibility for their procurement practice.
Now here are the links to the Yes Virginia Posts, which will explain why that State’s (or Commonwealth’s) eVA initiative has been a success:
Yes Virginia Part 1 – https://procureinsights.wordpress.com/2007/09/12/yes-virginia-there-is-more-to-e-procurement-than-software-part-1/
Yes Virginia Part 2 – https://procureinsights.wordpress.com/2007/09/20/yes-virginia-there-is-more-to-e-procurement-than-software-part-2/
The key differentiator in this instance was Virginia.
colincram
July 27, 2016
I agree with Jon about relationships. Good relationships are essential with any contract if it is to work well. Contracts should be let only to those businesses with which one feels one can work. It is possible to ensure this in the tendering process. For example, one can introduce presentations and assess businesses on how well they deal with issues or anticipate them. Also, are the people doing the presentation the ones who they will employ for their side of contracts management and can one work with them?.
Bertrand is also right. Technology changes rapidly and it makes sense to test the market. However, at first glance, this tender does appear to discriminate against smaller businesses who may be able to ;provide a much better and cheaper service. Who will ever know?
piblogger
July 28, 2016
Quick question for you Colin, how would this same scenario re a client wanting to switch providers, have played out in the private sector?
Jenti Vandertuig
July 28, 2016
I agree with Bertrand. Santa Clara County had a very rocky start with our implementation of the Procure-to-Pay Collaborative Commerce project with Ariba. It was purely working as “one team” with both SAP/Ariba and SCC teams committed to making it happen, irrespective of specific contractual obligations, that we were able to turn the project around and are seeing results now. Without the relationship and partnership, we would have parted ways and would have been in the books as yet another failed procurement. Of course, if we had blindly selected Ariba without knowing the functionality and features, our relationship would not have fetched the results we desired. Arizona’s RFP construction and the protest letter speaks volumes without touching on the facts!
piblogger
July 28, 2016
What I like about your comment Jenti, is that you emphasized the importance of the relationship, and took responsibility (or the lead) in coming up with a collaborative game plan. This in turn paved the way to not only assess, but utilize the technology to its full potential.
While there will be some functional/feature distinctions with individual solutions, as eProcurement technology – like the PC – becomes more commoditized, the real differentiation between providers will be in their ability to work with end-user clients effectively, and vice-versa.