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OCTOBER 16, 2023 06:00 AM ET
When a multi-billion dollar transportation and airline company sought to get its arms around its unwieldy procurement operation, it turned to a tried-and-true tool to do it: the balanced scorecard. It deliberately and methodically consulted with acquisition stakeholders, developed metrics aligned to the organization’s goals, and used the resulting scorecard to improve its efficiency and save millions of dollars in the process. Countless other private sector organizations rely on this same tool, so why not the federal government?
Federal agencies just spent more than $600 billion on contracts in the last year, almost 20% of that in September alone. That rush in spending, to state the obvious, is not a good business practice. But, in addition to waiting until the last minute to push out so many contracts, there is an array of additional challenges in government contracting. Many are well known. Skill gaps, poor transparency, and fraud are just some of the issues procurement officials have to navigate.
GAO wrote in 2021 that procurement executives could improve the use of metrics, including outcome-oriented metrics, in their acquisitions. Adherence to the dizzying acquisition regulations is also critical to ensure fairness and reduce the chance of protests. A balanced scorecard would provide procurement executives the insights they need to better manage contract operations and get the government a better deal.
With so many billions in annual spending on goods and services, procurement executives need a holistic view of their organizations’ performance. The balanced scorecard can help organizations accomplish this by 1) aligning procurement performance measurement with strategic goals; 2) focusing performance metrics on all aspects of the organization; and 3) promoting accountability across the organization from leadership to contracting end-users. Here’s how: