Excerpt

Navigate the route to successful procurement of a public fleet.

Buying new fleet equipment is much like driving fleet equipment from point A to point B. There is a starting point and a final goal, but between the two points, you will find barriers and obstacles, which can cause problems without helpful supports along the way. For example, when a bridge is out, drivers use detour signs to find a new route that will take nearly the same amount of time. Consider the consequences if those detour signs are not in place. Purchasing new fleet equipment is comparable. You will run into snags and obstacles delaying the procurement schedule, but helpful “detour” signs are available to avoid these delays.

Navigating the obstacles in the road

When creating a plan for purchasing new vehicles, you must consider many factors, including budget, the timing of the purchase, and human capital.

Budget

Every procurement expert starts a discussion with a budget, which will drive the process and create a framework for what the options truly are. You will use this budget to determine the quantity that you can purchase. Since inflation has impacted the market, your budget might not go as far as it would have in the past, so precise cost projections are crucial. There’s likely a budget deadline to have funds encumbered, so the “clock is ticking” as soon as the purchasing plan has begun.

Timing of the purchase

Timing is a critical factor. You will need to purchase specific equipment in advance of the season in which it will be used. For example, the process for snow-removal equipment will be different than equipment for road repair, which might also be different than a fleet for logistics and transportation.

While it might feel like common sense to schedule these purchases as the equipment is needed, current supply chain issues have significantly impacted timelines. As you establish a cycle of purchasing seasonal equipment (for example, every year, you bid for trucks in March), you must factor post-pandemic supply chain issues into the timeline.

Human capital

Some people overlook an obstacle that they might not realize is actually an obstacle: inefficient use of staff’s time. Managers must analyze the question, “How much time does the staff have to dedicate to this process?” If the answer is unclear, explore which steps, if any, could be outsourced to a different person or group. Employees who are stretched thin appreciate outsourcing because it can alleviate stress for those who already have a full plate.

Developing a road map to success

Now that you’ve laid the foundation, movement can happen toward securing a fleet. Support the foundation with budget and timeline to move the procurement process forward. As on the road, you’ll find that barriers are sometimes clearly visible and sometimes hidden. There will be obstacles to navigate as you create your procurement schedule for the new fleet. You will see some from miles away, but others will surprise you, like potholes in the road.

Determining your needs based on current options

Establish a framework for finding what you want by defining desired size, capacity, quantity, and fuel type. Some of these considerations might be easy, like answering questions about the number of vehicles that you are purchasing. Others might not be as straightforward, such as the energy model of the fleet.

Many local government leaders want to model responsible environmental impact, which means “fuel type” is a leading factor for a new fleet purchase. This is true even in the heavy equipment sector, as the electric vehicle sector continues to grow, and you can choose from many effective options. In 2019, the number of registered battery and plug-in electric trucks more than doubled, and operators can find equipment that is powerful enough to do the same work as gas-powered vehicles.

If municipal leaders voice interest in going in this direction, you will face additional layers for the procurement schedule. You must factor in planning for charging stations and other infrastructure requirements, and if this is a new undertaking, it requires even more research. Juggling all these factors affects how quickly you can get the fleet out to bid and how much time the staff needs to research and plan for these upgrades.

Replacement vs. upgrade

Although it saves time and money, most public fleet directors do not want to push “repeat” on the last purchase and just order more of the same. Replacement is the easy route, as you can reuse bids from previous years, and the process ends there. You want to upgrade when possible, but this requires homework and research. Unfortunately, many go the easy route, not because it is best, but because they just don’t have the time to create new specs.

Some purchasers trust a salesperson, who is the content expert, to assist with researching upgrade options. While this is a common practice, the salesperson’s interests might not always align with your organizational goals. Your best results will come when you do your homework yourself, gather quotes, and find the right fit for your situation. That said, you need to find the right partner in the process, one who can help achieve your goals without selling you a specific brand along the way.

You have considered what you want and know the ultimate destination; it is time to navigate the route and find any detours to get there.

Barriers in the road: The traditional bid process

Once you determine your needs, you must focus on the procurement schedule and plan to purchase the items. Most people take the route that is most comfortable and familiar: a traditional bid process. But what exactly does this mean? Stated simply, you put out specifications about the desired equipment that you want. This is posted publicly and opened for bid. After a set period, the bids close, and the contract is awarded to the lowest bidder. Your options at this point are to accept the low bid or restart the process with different specifications. 

While this sounds effective on the surface, several obstacles might block your way. For one thing, the process can be lengthy and require the bids to be posted for weeks at a time. If you need the fleet to be delivered at a certain time or season, you must factor that into the bid process. Your team can build expected delivery dates into the specs on the front end, but doing so does not always guarantee delivery.

There are also hidden costs in the traditional bid process for the staff who will need to determine these specs. If there is a desire for a specific type of equipment to be purchased, this can be an obstacle. For you to obtain what you want, the specifications must be narrow enough to procure the equipment but not so narrow as to create an unfair bidding process. The winning bid may not be exactly what you wanted in terms of brand and style. If the bid does not turn out to your liking, it can be turned down. But the alternative to turning down the bid is to get new specs and begin the process over again, delaying the process even more. In all, this can cost you considerable time and the possibility of not getting the desired vehicles.

Finding the best detours: The power of a cooperative

The good news is that you can remove the barriers that come with the traditional process to save time and money: using cooperative agreements to procure the fleet. Here is how this process works.

Selecting the equipment and placing the order

From the start, you’ll find that this detour is straightforward. The cooperative process is clearer on the front end than the bid process. You know what the options are at the start of the process, saving you and your staff valuable time. Instead of doing lengthy research to find the perfect specs, you can spend time reviewing the existing cooperative options. You will find clear pricing, and the purchase can happen in a relatively short turnaround.

You will save even more time on the order and delivery end of things. You know about supply chain and delivery delays from the start, so you can align your procurement schedule more easily. Cooperatives take the guesswork out of the entire process and make decisions easier as a result. While you still might experience long lead times on delivery, you will know this up front, which makes a big difference.

Procurement and delivery

Once you have completed the selection process, the next steps are relatively straightforward. Purchase orders need to be completed, and there are likely approvals required by a governing body. Your team can schedule delivery and logistics along with any facility updates needed for the new fleet, chargers for EVs, storage units, etc. Getting a fleet in time is no small undertaking due to global supply chain disruptions. When you use a cooperative, you can have the fleet that you want when you want it.

Getting to the finish line

At the start of the process, your goal is to get the fleet equipment that will meet your community’s needs, to navigate this road on any detour needed to be successful. You can achieve this goal with the right tools and resources. You might have skeptics around you when it comes to the cooperative process, so understanding it is essential.

You might believe a misconception like, “There are no cooperative options in my state for this kind of specialized equipment.” But partners like Sourcewell have a mission to create avenues to success and timely delivery through cooperative purchasing contracts. You will quickly see how setting up these agreements is possible. Know up front that setting up the cooperative takes time, so do not delay if this is the ideal route for you to have a successful procurement schedule.

You may worry that your options are limited during the cooperative process. While this could be true, it is also possible to work around any issues to get what you need. It takes a strong partnership to do this, as certain complexities are involved. Discover more possibilities with a cooperative—and the right partner.

Making sure all needs are met

Even with the barriers, you can see the end of the road. Despite supply chain delays, your community needs you to be ready. As you look at your procurement schedule, you can see how the timeline needs to match the delivery of the fleet when it is needed, how the budget forms the framework for all decisions, and how your staff may or may not have the bandwidth to take on a large procurement project.

Balancing all these factors is not easy, particularly when going through the traditional bid process. This equipment is too specialized and specific to end up with the wrong vehicles winning the lowest bid; many businesses have turned to using a cooperative contract. You will find success with knowledgeable partners helping to navigate the detours to the destination. Don’t delay reaching out to find a trusted partner for a successful fleet procurement process.

Here at Sourcewell, we help public agency buyers procure fleet vehicles faster by fulfilling the time-consuming bid process for them. Through cooperative contracts, we expedite the fleet vehicle procurement process so you can better serve your teams.

Want a faster procurement process? Contact one of our specialists today to buy the fleet solutions you need!