When ‘not as bad’ is good news

Whether an occurrence is good news or bad news often depends on the context. Case in point: The National League of Cities' latest City Fiscal Conditions survey, which shows that 43 percent of city finance officers are less able to meet city needs than last year.

That may sound like bad news to some, but considered in context, it's good news. If you consider that last year the troubling number was 57 percent and the years before it was 87 (2010) and 88 percent (2009), the latest figure doesn't seem so bad.

Positive spin is typical of the economic news we are hearing lately. The so-called "new normal" comes with it lower overall expectations that put much of our economic news in a positive light. The unemployment rate is still high, but not as high. Economic growth is painfully slow, but slow growth is better than stagnation or decline.

Positive spin helps to feed the perpetual hunger for good news among a weary populace, but some things defy a rosy outlook. The National League of Cities survey highlights a variety of concerns plaguing the fiscal health of cities, from health care and pension costs, to infrastructure costs and public safety demands. Respondents to the NLC survey also noted an increase in costs, declining local tax bases, less federal aid, and a slow local economy in general. Property tax revenues are projected to fall for the third year in a row; income taxes are dropping; while sales tax revenues provide a bright spot by continuing to rise by 2.4 percent in 2012.

So how are local governments dealing with the challenges? According to NLC, 43 percent have raised fee levels, 48 percent have shrunk the size of their work force, 21 percent have decreased human services spending, and 25 percent have reduced spending for other services such as parks, recreation and libraries.

It's a sure bet, then, that challenging economic conditions will provide the context for how government procurement professionals do their jobs in 2013 and in the foreseeable future. The news next year might be "not as bad," but the challenges will remain. With challenges come opportunity for procurement professionals to highlight their contribution to maximizing the benefits of even scarce available resources.

Many procurement departments are working with less staff. Effective government operation, especially as it relates to how taxpayer resources are spent on goods and services, rests on fewer shoulders. Still, the impact of government procurement is huge, given that every penny saved in a contract is a penny that will not have to be cut somewhere else.

Increasingly, the effectiveness of government depends on the experience, skills and hard work of procurement professionals, whose strategic role in achieving the mission of local and state governments is greater than ever. For those making a career in government procurement, that's good news in any context.

Larry Anderson is editor of Government Procurement magazine.