Friday Rant: Coupa's Free Government Giveaway -- If Only It Was This Easy
Let's start with the basics. Is Coupa a GSA approved vendor? They weren't as of 8:35 CDT on Wednesday night when I last checked. To have any sustainable chance of serving the Federal government -- or at least to take their money -- you've got to get on the list. So even if Coupa got a contract (or many) serving Federal agencies and departments for free, they'd still need to figure out how to get on the list to eventually start charging them. Next, let's talk about selling software to the Federal government let alone begging them to take it for free. I doubt Coupa knows any of the inner workings here or how firms like Carahsoft serve as golden gate keepers with golden rolodexes. Nope, they're too innocent and too West Coast.
Second, even though we can all agree reducing Federal maverick spending is a noble goal, when it comes to DC, we need to start with the 80/20 rule and look at the big kahuna(s) first -- procurement policy, sourcing strategy and negotiated prices. While an eProcurement platform is certainly a worthwhile investment -- and Booz, CSC and others have gotten paid small fortunes to slam in customized purchasing systems -- it's not what's needed most. No, what the government needs is to do away with the ridiculously complicated legacy rules of procurement. Volume 1 of the FAR is now a 19.5 MB PDF file. That’s right. It takes the government 19.5 MB and 1,969 pages (but who's counting) to simply explain its purchasing policy. And despite the Fed's leverage, they rarely get the best deal because the sellers must publish their pricing (which becomes a great benchmark for large private sector companies from which to negotiate). But don't get me started on this one, because I might not stop.
Let's get real. Federal procurement does not have to be the multi-headed hydra that it's become. Changing the beast is something we could do right here. And I'll try. The central philosophy behind Federal agency and department procurement should be to get the best value -- note "value" could be interpreted in many ways -- for every taxpayer dollar spent. Efficiency and automation must be part of this equation (i.e., Coupa and other eProcurement vendors). But the real problem rests with the utter complexity of how the government defines and pursues supplier recruitment, selection, strategic sourcing and ongoing vendor management (hint: how they define/explain it is not the same way we think about it in the commercial sector). Obama and team should make it their legacy to re-write the FAR and to keep it under 100 pages. It's possible, people. Have HOPE.
At the end of the day, while we should commend Coupa's ambitions, I wish they would have printed out the FAR, killing a few trees in the process, and spent the time to read it before they embarked on such a silly endeavor, wasting their own time (at least on the Federal level). Calling attention to Federal procurement inefficiency from a requisitioning process is like complaining about a drippy faucet in a lavatory on the Titanic. Yes, it needs to be fixed (and maybe Coupa is the one to do it). But the real problem is that the ship is taking on water. And no plumber fixing a frigging faucet in a Walnut-lined stateroom is going to have a solution to that.
- Jason Busch
And, even when government selects a procurement solution, it is likely to be some beltway bandit who is laughed at by its competitors in the real world but who has cracked the code with regard to selling its mediocre solution to the Feds. On the state level, for example the recent scandal in Massachusetts surrounding their Cognos deal, it looks like payola is required just to land the deal
So here's wishing Coupa luck in their new endeavor. Hey, it got them press on Spend Matters -- not a bad return already!
"I have very little hope of this (Coupa's offer) amounting to any more than a marketing stunt, at least at the Federal level. Which is an absolute bloody shame. And the reason it will fail speaks to why our Federal procurement programs are way too complicated, inefficient and out of touch with taxpayer needs in the first place."
You have a point. From the FAR (Federal Acquisition Regulations) to the DFAR (Defense version) to JFMIP (Joint Financial Management Improvement Program) Certification, the Federal Government has found a way to make efficient execution of smarter spending nearly impossible.
Where I have a different take is on whether to try "to breakthrough the red tape" and push Federal Government agencies along a different path.
My point of view comes from years of experience with the vagaries of federal government rules and regulations for software vendors & other suppliers. It is also informed by my role as responsible citizen sending in a lot of money year after year knowing / suspecting the funds will be largely wasted.
So I am proud of Coupa for standing up and offering assistance, especially at this time of trillion-dollar deficits and economic uncertainty.
Some might argue that Coupa should wait to offer help until we are a public company. Or until we "poison" our easy-to-use Procurement system with support for the ridiculous requirements and regulations of bureaucrats in Washington. My view is that if we did that, we would be part of the problem, not part of the solution. The FAR may have many important protections for the government, but it also enforces un-competitive practices like "adjectival scoring systems" for RFP's. In my view, the Federal Government has found a way to create artificial barriers to entry, protecting un-competitive suppliers and freezing out innovation, change, and efficiency. They've taken the "status quo" and chiseled it into 20,000 pages set in stone.
Coupa is offering a helping hand - in the form of a sledge hammer to take to the status quo. The next move is up to Washington. :)
Well put my friend. It is because of people like you and Rob that the dream of truly reforming Federal procurement lives on. I just wish that such thinking could become reality. Alas, I guess having seen enough of how Washington works over the years, I approach this from a damaged goods perspective. Even compared with the monstrosity that is our tax code, Federal procurement policy is even more complicated. What's even more sad is to think of how much of the stimulus money is wasted on actual stimulus given the inefficiency in the system.
Coupa also has the Phoenix Coyotes as a client, which they may lose if the Coyotes end up in Canada...or not.
By the way, I dig your blog! Great job, Jason.
All that to delete two words (alpha and date) - wow! If that's what my day looks like as a federal procurement worker, no wonder they seem a bit glazed when you meet them at conferences.
A previous company I worked for had an internal policy of NOT getting involved in ANY government bids - at any level - since there is rarely a budget, no understanding of specs, and no willingness (maybe ability) to listen to advice. And tectonic plates shift before their decision process is over.
The federal procurement Leviathan - if Coupa can slay it and feed it to the righteous, more power to them. It'll be interesting to see how it plays out though.