During my morning stops at Starbucks to buy a
latte, Ive observed how this company launches new products,
flavors, and drinks with cohesion. New drinks are not launched in
isolation; staff members are quick to recommend the latest drink
when you arrive at the counter, and there are complimentary food
items and related products on the shelves.
Launching new products may seem straightforward in the commercial
world, but it is still fairly novel to the public sector. Public
agencies often fail to apply these types of ideas when launching a
new strategy, which leads to a lack of cohesion of internal support
functions and, more importantly, contracting functions.
More often than not, the contracting function remains separate from
the strategic priorities of a public agency. When treated as a
static area of the organization, great contracting opportunities to
impact the health, safety, and wellbeing of individualsand the
community, as a wholeare missed. This can cost our organizationsand
our communitiesmuch more than the price of a latte.
Training Strategically at HHSA
Using the contracting process to promote strategic outcomes is no
different than Starbucks aligning its drinks, products, staff
training, and marketing initiatives. This sort of cohesion has
The contracting process is a powerful tool for engaging community
partners and expanding the impact of your agencys strategic goals.
Recognizing this lost opportunity, the County of San Diego Health
and Human Services Agency (HHSA) has adopted a strategic approach
to procuring services, evaluating proposals, and training staff in
HHSA is comprised of public, physical, and behavioral health
services, as well as social and protective services. Typically,
these services are provided through multiple HHSA divisions and
regions via contracts with community-based vendors. HHSA maintains
a portfolio of approximately 900 contracts totaling nearly $413
With such a large amount of services being provided by contractors,
HHSA recognized the need to ensure that its strategic plan was
guiding not just internal programs, but also contracted programs.
As a result, HHSA developed a single, one-page strategic plan
referred to as the HHSA Strategy Agenda to provide cohesion and
highlight opportunities that integrate services from various
disciplines for seamless delivery to shared clients.
Designing a Performance-Based Contracting Course
For a strategic thinker, the contracting process can feel like
chains weighing down opportunities for change, innovation, and
creativity. For a contracting staff member in a public agency,
strategic planning can feel ethereal, too expansive, and
disconnected from day-to-day business operations. While neither
impression is totally accurate, it is important to acknowledge that
these perceptions exist and can stand in the way of leveraging the
contracting process beyond simply acquiring a service or good.
HHSA began its efforts to align and integrate the contracting
process with its strategic plan through a training course in
performance-based contracting. The topic explored the link between
HHSAs strategic plan and the outcomes selected for a contract.
Notably, the contracting office and strategic planning office
collaborated to develop the curriculum.
The course development process involved two-way education from
staff in each discipline to bring content together. Course
designers talked through some pointed questions to ensure
creativity and flexibility and provided staff with concrete steps
and items for analysis and consideration.
The result was like an extra shot of espresso in the contract
training curriculum. Previous education efforts had focused on the
contracting process alone, explaining in a one-dimensional manner
how staff should follow specific contracting rules and practices.
The new performance-based course integrated general contracting
concepts and steps as well as explicit actions and practices for
analyzing and articulating how program goals tie to the HHSA
strategic plan, ultimately including a strategic plan linkage in
Through the development of the course, HHSA saw how it could better
leverage the contracting process to motivate contractors to align
their proposals and service provision with HHSAs strategic plan.
Managers saw that with guidance to staff, HHSA could mobilize its
strategic plan in the community through a network of nearly 500
Embedding the Strategic Template
Consider, for example, a contract to address gambling addiction,
which is a growing problem in San Diego County. The contract needs
to spell out conventional requirementsin this case, hours of
services and the availability of a toll-free number for residents
to call who need help. In addition, this sort of performance-based
contract also needs to include outcome goals, such as treatment
effectiveness (for instance, 60 percent of clients do not relapse
within a certain time period). Ultimately, the contract must align
with the strategic goal of providing quality treatment and care to
improve health and reduce dependency on public resources.
Based on the success of the collaborative development of the
performance-based contracting curriculum, HHSA continued to embed
content from the strategic plan in other contract training efforts.
This approach expanded beyond classroom curriculum to include
contract training content
contract forms and template for staff use
standard measures of contract process
After its initial success with launching the contract training,
HHSA saw how it could link the strategic plan throughout the
contract procurement and management process. Developers continued
building course content to include material about incorporating
strategic plan goals into each step of the contract process. This
provided cohesion between one of HHSAs bigger business processes
and the strategic plan.
One training area that this tie has been especially useful is
procurement and contract development. This is where staff must
understand what HHSA calls the pitch: What is it that HHSA is
working toward through the strategic plan? How do individual staff
members take that information and relay it to organizations
interested in submitting a proposal for a contract? HHSA needed
resources to support the staff in delivering an integrated pitch.
Including the Strategic Plan
The procurement development phase is when you draft the request for
bids or request for proposals, which describe services are
required, outline specific time frames, and detail and standards or
performance requirements. HHSA needed to provide staff with
training and tools to explain what services HHSA needed in the
procurement process, as well as create a link between the services
and priorities and outcomes reflected in the strategic plan.
HHSA developed a new format for its proposals that integrated two
formerly separate documents:
This new template was put into practice slowly, but increased in
use as more staff members shared their successes with their peers.
The template provides guidance for sections required in the
procurement document, including the link to the strategic plan.
For example, in procuring Domestic Violence Services support rather
than telling interested organizations specifically what their
programs needed to do, HHSA asked them to explain how their
approach to service delivery would further the strategic goal of
protecting children, families, and vulnerable adults from dangerous
conditions. This was an important shift for HHSA; it moved from
telling contractors what to do to engaging contractors as
participants in achieving the goals of the strategic plan. The
structure developed during this procurement became a part of HHSAs
After trying this new procurement format, HHSA realized that it
needed some complimentary items to further assist staff. For the
new format of procurement proposals to be of value to HHSA, staff
needed to discuss and decide in advance how to evaluate responses.
Clearly, staff needed to incorporate development of evaluation
standards into the procurement planning process much earlier than
Consider, for example, how HHSA requested and evaluated information
about an organizations community partnerships. The importance of
building and maintaining community partnerships has long been
recognized as an HHSA strategic objective. In the past, it was
incorporated into procurements by asking respondents to submit
documentation about their community partnerships, which often
resulted in a batch of freshly printed memoranda of agreement
(MOAs) delivered with the proposal.
While this approach provided a level of confirmation that the
potential contractor was connected with other organizations in the
community, it did not truly answer the question about partnership.
To further complicate things, it was not possible to evaluate the
depth of the partnership when comparing various proposals.
Reviewers could see how many MOAs were submitted, but could not
evaluate whether the organizations worked collaboratively on
previous efforts, if goals were achieved, and the depth of
commitment between agencies.
One of the first procurements for which HHSA used this technique
was Healthcare Safety Net Services. A certain level of partnership
and commitment was very important for contractors to meet the goal
of using innovative approaches to link physical health resources
for the most-needy populations. HHSA began discussions while
drafting procurement documents on how to evaluate community
partnerships to ensure alignment with strategic goals and clarify
review criteria for responses.
Because the procurement was still in draft, staff members were able
to review, edit, and strengthen the language within the requests to
clarify for interested organizations what HHSA wanted to know about
their partnerships, as well as how they could demonstrate it to
HHSA. They also developed standards for ultimate use in reviewing
proposals. Both the language in the proposal and the evaluation
standards supported the strategic goal, and did so in a meaningful
Negotiating What HHSA Really Wanted
HHSA has even expanded its link to strategic priorities during the
negotiation phase. The new contract negotiation training included
instruction on how to measure the success of negotiations. In
developing steps for measuring success, HHSA realized that a
successful negotiation must be related to the HHSA strategic plan,
as well as components of the specific deal.
Historically, contract negotiations were evaluated informally, and
ratings were based on characteristics that were chosen after the
negotiation was complete. Often, those characteristics only related
to the specific contract in question. While those components are
important, general evaluation facets were needed to measure the
full impact of the process. HHSA needed to measure how the outcome
of the negotiation affected the individual contract, as well as
HHSA strategic goals.
For example, if the strategic objective is to increase the use of
technology in service delivery, program managers may choose to
focus on gaining agreement on increasing the contractors web-based
service delivery methods. This strategic objective may also impact
what is a reasonable price. Without aligning negotiation points to
priorities, the contract may have focused solely on price rather
than web-based service options.
With the development of the negotiation course, HHSA developed a
set of standard strategic plan-related negotiation metrics that
staff must pair with deal-specific metrics. These strategic metrics
are an important part of the infrastructure needed for HHSA to
reach its strategic goals.
Consider again the example of community partnerships. Because the
success of HHSAs strategic plan is strongly tied to working in
partnership with other community organizations, it recently
incorporated a measure of impact on the relationship into
When evaluating outcomes of any negotiation, staff members are
asked to assess what impact the deal has had on relationships with
the other party. All negotiations, whether or not a deal is
reached, should end with a positive working relationship that will
enable future collaborations or contracts. If the negotiation is
conducted in a way that HHSA gains mechanical advantage (price,
timeframes, and so forth) at the cost of a future working
relationship, then the success of the negotiation is in question.
HHSA would not have enacted this negotiation metric without a
connection between contracting and strategic planning disciplines.
To compliment training and make it easy for staff to link
contracting and the strategy agenda on a day-to-day basis, HHSA
created templates and tools to guide users through a variety of
contracting processes. Templates include built-in prompting
questions and guidelines that incorporate goals of the strategic
One example is the HHSA Negotiation Preparation Worksheet. The
worksheet has the organizational negotiation success metrics
pre-loaded and includes space to add situation-specific metrics and
other preparation steps.
Generating Repeat Business
Why do I continue to visit Starbucks? It isnt just my need for
caffeine. I have a good experience as a customer and can rely on
the same service each morning: The store is clean, the staff is
friendly, the drinks have a consistent taste, and the service is
quick. In a similar way, HHSA wants its residents and funding
sources to have a good experience with services. To generate
positive repeat business, strategic priorities must drive services.
As a major support functions, contracting can be a powerful tool
for any organization to meet its goals.
HHSA took one step at a time toward fully connecting the
contracting process to strategic goals. As contract training grew
from a single, performance-based course into a collaborative effort
with the strategic planning, HHSA wanted to make it easy for staff
to connect the organizations strategic goals to day-to-day
Achieving Bottom-Line Results
Do public managers need to think with such granularity? Yes.
Details matter. Public agencies have enormous responsibilities that
impact the lives of individuals. To make sure the impact is
positive, let strategic objectives guide you. To achieve goals, an
organization cannot apply the strategic agenda to some pieces of
the operations, but not to others.
Success is not determined solely by the services delivered, but
also by how those services are acquired, managed, and delivered.
Public agencies cannot expect to engage and activate the community
without walking the walk. If a strategic goal focuses on
partnerships within the community, but negotiation concludes with
ruined relationships and one-sided deals, how much confidence can
that organization have in the agencys values?
HHSA has started to embed its strategic plan and goals into the
contracting process. Doing so has enabled the organization to learn
from the process and to clearly identify supportive tools it needs
for staff to put ideas into action. HHSAs experience has been that
once changes started, momentum and excitement grew among the team
members, and peer-to-peer endorsement of the new approaches and
tools has enabled this practice to grow across the agency.
On the whole, linking strategic goals to contracting has had a
positive impact on procuring services and has expanded staff member
focus. Embedding strategic priorities into the process has made it
seamless for staff to advance strategy in their day-to-day work. It
also promotes engagement among staff members who now experience
concrete examples of how their work supports the agencys strategic
To be sure, wisdom and innovation can come in surprising
formatswhether it is the contracting process or ones morning latte.
Government agencies have an opportunity to achieve a greater impact
on their communities by dynamically connecting acquisition
initiatives to a broader set of strategic priorities. In this way,
services will align with an agencys strategic vision, as well as
public expectations. This consistency and follow-through will
resonate favorably with stakeholders and position the organization
as a leader of choice.