Procurement Reform: Let’s Start With What Problem We’re Trying to Solve
Gov. Gavin Newsom’s Executive Order N-30-25, issued in July 2025, lays out a commitment to streamlining procurement and contracting across California state government. It’s a strong signal that the administration is serious about building a more efficient and responsive public sector. I commend the governor for taking on the challenge of procurement reform. Having served as director of the Department of General Services (DGS), I know firsthand how complicated, but essential, this work can be.
But as we advance this effort, we must be clear about something fundamental: What problem are we trying to solve?
Too often, “procurement reform” is treated as a catchall solution, but the term lacks precision. Is the problem that procurement takes too long? That it costs too much? Are the products or services the state buys failing to meet agency needs? Can we do a better job fulfilling our small business and Disabled Veteran Business Enterprise (DVBE) targets? Should we make the process more fair, competitive or transparent?
The honest answer may be all of the above. But if everything is the top priority, nothing really is. That’s why a successful reform agenda must start with clarity — not just about what we want to fix, but which goals we prioritize in different contexts.
Competing Priorities in Procurement
Procurement inevitably involves trade-offs. And the order of precedence among the following values will differ depending on the project:
- Speed: How urgently do we need this good or service?
- Cost: How important is minimizing upfront or life cycle expense?
- Quality/Functionality: Will this solution meet end-user needs, integrate with existing systems or require future customization?
- Policy Alignment: Does this purchase support the broader goals of the state (e.g., climate, equity, accessibility)?
- Competition/Transparency: Are we ensuring a fair process that brings in the best ideas and vendors?
- Small Business/DVBE Participation: Are we using our purchasing power to support economic inclusion?
All of these are good and valid goals. But each procurement requires an intentional decision about which goals come first.
Examples From Practice: Matching the Procurement Approach to the Priority
We’ve seen different approaches to procurement depending on the type of good or service being purchased and the policy goals in play. Here are several examples that demonstrate how the order of priority can and should shift.
- Cost: Pharmaceutical Collaborative — When DGS led Newsom’s Pharmaceutical Collaborative, the central focus was lowering the cost of high-cost drugs for state purchasers. Our top priority was achieving cost savings — whether through strategic sourcing, volume-based pricing or identifying generic or therapeutic substitutes in place of expensive brand-name drugs. In this case, cost was the driving factor, and we designed our procurement strategy to pursue that goal without compromising therapeutic value.
- Functionality: WIC IT System — When the California Department of Public Health was developing the RFP for a new IT system for the Women, Infants and Children (WIC) Program, we pushed hard to reduce the scoring weight for cost and increase the weight for functionality. This system was entirely federally funded and would serve millions of low-income women and children who rely on it for nutritional benefits. So, our primary objective was to ensure that the system was reliable and easy to use for families and providers. We understood that a slightly higher price tag was justified by the essential nature of the service.
- Policy Alignment: Fleet Procurement — In line with the state’s clean energy goals, we made the decision to restrict our sedan procurement contracts to only electric and hybrid models. We knew this would cost more, but the goal was to lead by example and also make it easier for local governments to purchase cleaner vehicles through our contracts. We opted for a multiple award schedule so that agencies had more EV and hybrid options to choose from.
- Speed: Pandemic PPE Purchasing — During COVID-19, speed was the top priority. We needed to move fast to secure critical supplies for front-line workers. That meant sometimes purchasing through noncompetitive processes. But we didn’t compromise on quality. We only purchased N95 masks that met National Institute for Occupational Safety and Health (NIOSH) standards, even if that meant paying more or restricting our quantities purchased.
- Small-Business Participation: State Office Buildings — During Gov. Jerry Brown’s administration, DGS issued multiple RFPs for the construction of new state office buildings. At that time, one of our high priorities was to support small-business participation in public works projects. So, we incorporated clear requirements for meeting small-business participation goals in our RFPs, knowing that doing so might increase costs or extend construction timelines. But we scoped these impacts carefully and confirmed that the state could afford to support these goals within available budgets and schedules. Here, economic inclusion became a priority, and procurement was shaped accordingly.
Each of these cases had set parameters and prioritized goals, and procurement was structured accordingly. But in each case, we had to be transparent about the trade-offs: higher cost for better functionality, longer lead times for greater impact, or limited competition for urgent delivery.
Why This Matters Even More for IT Projects
These considerations become even more important in large-scale IT procurements. These projects are inherently high risk, high cost and high visibility. They affect millions of people, and they often involve multiyear development and integration timelines.
The Fi$Cal project is a telling example. The initial cost projections were higher than the budget that was ultimately approved. To secure funding, functionality was trimmed and the budget reduced. Over time, as agencies realized they needed more features, change orders brought the scope (and cost) back up to the original estimates. On the surface, this may have looked like a project overrun — but in reality, it was a reflection of how early-stage trade-offs were later reversed to meet real-world needs.
There’s a logic to that. Budget constraints, shifting priorities and operational feedback loops are part of any complex system implementation. The key lesson isn’t to avoid trade-offs — it’s to make them transparently, deliberately and with full understanding of their downstream impacts.
Getting the Right People to the Table
To navigate these trade-offs successfully, we need to involve the right stakeholders early in the process:
- End users who understand how the product or service must perform
- Funders who control budget and understand fiscal constraints
- Policy leaders who define how procurement supports broader state goals
Without these perspectives, we risk developing procurement approaches that are misaligned, misunderstood or unsustainable.
A Constructive Path Forward
Executive Order N-30-25 is an important catalyst for reform. But to deliver on its promise, we need to bring clarity to complexity. We need to understand that procurement isn’t about chasing a single ideal, it’s about managing trade-offs to achieve the best outcome for the public.
Let’s get clear about what problem we’re solving. Let’s be intentional about which goals come first. And let’s recognize that state procurement, done well, is not just about buying things. Rather, it’s about aligning to policy goals, delivering outcomes and setting California up for long-term success.
