On the surface, manual procurement might seem like the most cost-effective way to manage your purchasing. An email here, a spreadsheet there, a form printed for signature, and no additional costs for specialized software or training.
But beneath that patchwork of legacy processes, time-consuming tasks, disjointed workflows lies a minefield of inefficiencies and risks that silently cost your agency time, money, and public trust.
Let’s take a closer look at the real impact of sticking with outdated procurement workflows, how they’re hurting your bottom line, and why now is the time to modernize.
Cost 1: Valuable Time
Procurement teams are highly skilled professionals, and they’re often part of a small but mighty team managing multi-million-dollar purchases for several different departments. They’re busy, and their time is valuable. Manual processes suck up hours quicker than they may realize. So when they spend hours creating new solicitations from scratch, drawing out scopes of work, hunting down signatures, reaching out to newspapers or sending individual bid invitations, responding to individual emails, accepting and opening in-person bids, tracking down missing documentation, updating spreadsheets, or and filing paperwork, their expertise gets buried under admin work.
Manual requisitions, solicitations, and awards can delay projects by days or even weeks. A single missing clause or certification can cause a domino effect, pushing back bid releases and vendor responses, delaying evaluations and award, or setting you up for no-bids or bid protests.
Cost 2: Financial Waste
You may not see the expense for “manual procurement” in your budget, but it’s there. Instead of individual line items, these costs show up as:
- Overpaying for services due to a lack of pricing benchmarks or competitive bids
- Rushed or last-minute purchases when a missed deadline forces sole-source procurement
- Redundant purchases due to disconnected tracking systems
- Missed early payment discounts or fines from late paperwork
- Overtime payments to staff to meet tight deadlines
Manual errors also contribute to budget overruns. One wrong formula in an Excel evaluation sheet can mean mis-awarded contracts and bid protests, and a missing certification can mean compliance challenges that lead to fines or worse.
Cost 3: Limited Vendor Participation
When bid notifications are distributed via newspaper, postcard, or email, vendors can easily miss new opportunities, and you might miss out on new vendors. When manual communication is scattered across email chains, postal mail, or phone calls, vendors can miss critical addenda, misinterpret requirements, and submit incomplete or non-compliant bids.
These issues can lead to fewer responses, higher pricing, or worse, bid protests that force a re-bid.
Cost 4: Compliance and Audit Risks
Manual procurement processes usually lack the standardization and transparency public sector agencies must uphold to stay compliant. Faced with stringent local, federal, and state requirements, public agencies must document and make public almost every part of the purchase and contract process. But without a centralized record-keeping they can easily reference, audit requests become time-consuming and stressful, with critical documentation often misplaced or never received. Evaluation scoring can be more easily questioned or disputed, and public records requests are harder to fulfill, leaving you subject to distrust by your constituents or even vulnerable to legal action.
For example, in the case of an accident on a jobsite, a missing insurance certification could mean the difference between a vendor taking responsibility for their actions and heavy fines levied against your agency.
Cost 5: Missed Opportunities to Improve
When workflows live in email inboxes, complicated spreadsheets and paper files, it’s nearly impossible to assess team performance, analyze historical and average costs, and anticipate future pricing to create a cohesive procurement strategy.
Is a certain department over budget? Is a specific vendor consistently bidding too high or missing documentation? Are there purchases that could be made more advantageous with long-term contracts?
Visibility into your processes and performance helps you improve over time, make better budget decisions, and get more bang for your taxpayers’ buck.
So What's the Solution?
While purchasing a dedicated digital procurement solution may seem counterintuitive to saving money, automated processes, improved vendor communication, and centralized management and reporting can all help improve your agency’s bottom line.
The right procurement software will help you more quickly and accurately create new solicitations, streamline approvals and tenders, reach more vendors, and track long-term performance.
For example, PlanetBids’ end-to-end procurement software helps you create digital workflows that allow collaborative editing and approval, while allowing you to quickly register vendors and notify them of new bid opportunities, addenda, or Q&As. Bidders can submit all bid documents virtually in a secured portal and be notified of award, with more efficient evaluation processes for your decision makers.
Once the bid is awarded, vendors can upload any necessary certifications directly into your system and be notified of upcoming expirations or missing documentation, and your team receives historical spend analysis, vendor communication tracking, and audit trails to make smarter, more accurate decisions and build better relationships.
PlanetBids’ digital platform logs every action from start to completion, provides immediate access to records for audits, transparency reports, and legal compliance, and offers valuable insights and analytics to help your agency continuously refine operations, unlocking efficiency and proving ROI over time.
Ready to move beyond manual?
You don’t have to overhaul everything at once. Get more insights into how to automate processes slowly and convince your decision makers that digital procurement solutions can save you money in our Procurement Efficiency resource center.
Our free Procurement Efficiency Toolkit helps agencies like yours take the first steps with editable templates, process checklists, and an action plan for modernization.
Or explore how PlanetBids helps public agencies automate bid management, streamline vendor communication, and ensure transparency from day one.
SHARE
