Governmental red tape too often does nothing more than tie everyone's hands behind their backs. This is a persistent problem I dealt with when fulfilling a request for proposal. The agency we were working with was interested in the prospect of outsourcing. Unfortunately, the procurement office knew so little about our industry that every conference call turned into an extensive fact-finding effort. And with each new piece of information, the original proposal request had to be modified.
The process was a lot more circuitous than it needed to be for both the vendors and the procurement officers. It proved to be so inefficient and ineffective that the completion deadline had to be extended three times.
Red tape is not a new frustration, but it does appear to be getting worse. The World Bank ranked the U.S. seventh in terms of regulatory efficiency after being ranked fourth just five years ago. Industries like nuclear power are currently swamped in overzealous bureaucracy. Each individual plant spends an estimated $219 million just on compliance, and the whole industry spends $63.3 million annually on paperwork alone.
The financial impact is more acute in some industries, but it’s a burden shared by all. Federal regulations cost citizens and business $2 trillion every year. Add in state and municipal rules, and the total approaches 17 percent of GDP. And for every $1 billion spent on compliance, an estimated 8,000 people lose their jobs.
A systematic approach to governance is essential. But it is undeniable that red tape leads directly to delayed deadlines, cost overruns, missed quotas, and ineffective decision-making. Government oversight is not the issue. Business owners say new regulations are the second largest threat to their businesses, but it’s not because of resentment; it's because these regulations are overly complex, confusing, contradictory, and cumbersome. Compliance should not be a challenge; it should be an affordable and accessible goal.
It does not take an act of Congress to streamline the way regulations are enforced. It only takes a conscious effort on the part of various agencies to remove roadblocks and relieve friction points.
Procurement tools can be a valuable resource towards this goal. By relying on organizations that vet vendors in advance, procurement officers instantly identify options that provide competitive services and rates while meeting all regulatory mandates. Individual agencies no longer have to engage in time and labor-intensive research to outsource with confidence.
The culture of the agency also has an effect on how much of a tangle red tape creates. Decision makers who are eager to complete projects need to project that enthusiasm and ensure it permeates every level of the agency. Leadership is important in any organization, but it's essential in complex bureaucracies where messaging and morale can become diluted.
Finally, agencies should draw on the institutional knowledge created by partner agencies. Issues involving red tape are not unique to any individual office. Being frank and forthcoming about the problem reveals clever solutions and workarounds already tried and tested. This resource is especially helpful if a partner agency has carefully documented the procurement process.
Being willing to reduce red tape must become more than just an aspirational goal for today's government employees. Citizen consumers now have sweeping power to criticize government services through social media and rally a response. Sometimes these complaints crystallize into lawsuits designed to force changes more accommodating to small vendors. If red tape and customer service are inherently opposed, officials at all levels have to start focusing on the latter.