Different mission, same challenges for public sector CPOs

SCOTTSDALE, Ariz. — The U.S. Air Force has a major footprint in cities and towns across the United States. It also spends a great deal of money on what it calls “micro-purchase spending,” or spending on supplies on a base-by-base level. At nearly $2 billion annually, this micro-purchase spending could provide a major boost to communities that support the nation’s military.

But there was no program in place to manage that spending. So it created the First Look Program. The program dictates that commanders making local purchases should look within their communities first to identify companies to do business with.

Amazon Business is heavily involved in that program, leveraging its business-focused e-commerce platform to allow individual Air Force bases to search for locally sourced products first in compliance with the program.

Mike Kernish, director and general manager of the public sector for Amazon Business, told Modern Shipper the First Look program is an example of how Amazon Business (NASDAQ: AMZN) can help local governments, educational institutions and nonprofits find local companies or sustainably sourced products to support.

“All of them are mission-driven, and I think that is true in the commercial sector as well, but by definition, they are very mission-driven,” he said.

Many public sector organizations gathered this week as part of Amazon Business’ Reshape 2022 conference at the Hyatt Regency Resort and Spa. Joined by businesses of all sizes and shapes to hear how Amazon Business is working to improve their procurement processes, the public sector entities were able to get a deeper dive into some of the solutions available to them.

Many, it turns out, face the same challenges and have the same needs as their commercial brethren. For instance, Kernish explained how schools forced into remote learning during COVID-19 shutdowns were able to benefit from Amazon’s logistics operation to get supplies such as webcams to teachers suddenly teaching from their living rooms.

“Because of all the work that had been done in that space [prior], it was really easy to … create that capability,” Kernish said.

Like other businesses, public sector organizations have environmental, society and governance (ESG) goals as well as diverse supplier goals. On Wednesday, Amazon Business released its 2022 State of Business Procurement Report and it highlighted how important these programs are to government entities.

“Overall, 91% of buyers take seller certifications into consideration when purchasing — that’s up from 88% in 2021,” the report said. “For most businesses, supporting small or diverse-owned sellers is an internal goal. But for others — like government buyers who need to meet federal mandates — it’s a requirement.”

Kernish explained that Amazon’s guided buying technology is extremely important in these cases, surfacing products or businesses that meet internal goals of organizations, such as Black-owned businesses, or certified sustainably sourced products.

ESG and diverse supplier goals are only growing among the public sector, he said, even as there is concern about which direction the economy may be heading. Just like commercial businesses, though, price, availability and selection remain important factors as well.

“We have been focused on building the experience to make it even better,” Kernish said. “All the conversations we’ve had have been really positive. But that’s not a big surprise because we have the best customers.”

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Brian Straight