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Revealing the 2026 US Public Procurement Benchmark: Product vs. Practice, and Will AI Elevate or Eliminate Us? · The Leading Edge

• 0:02
  SPEAKER_01: Well, hello, and welcome back to the Leading Edge, a series offering in-depth insights into the key challenges, innovations, and evolving dynamics of the contract and commerce landscape.
• 0:14
  SPEAKER_01: I'm your host, Nikki Makai, Chief Development Officer of the Commerce and Contract Management Institute.
• 0:20
  SPEAKER_01: Now, in today's special edition, we are recording live at World Congress, just minutes after a session revealing the early findings from the 2026 US Public Procurement Benchmark Report ahead of its official launch on September 10th.
• 0:38
  SPEAKER_01: It was run in collaboration with iFertis, and the session dug into how public sector organizations are performing across contract management capability, technology adoption, talent and strategy, and sparked some genuinely lively debates along the way.
• 0:55
  SPEAKER_01: So I am joined by two of the leading voices behind that debate, Dr.
• 0:59
  SPEAKER_01: Dan Finkenstadt, otherwise known as Fink, who is Chief Innovation Officer at NCMA and federal SME at the CCM Institute.
• 1:10
  SPEAKER_01: And Patrick Patrick Hughes, who is industry advisor for the public sector at ICERTIS.
• 1:16
  SPEAKER_01: So between them and the rest of the panel, we heard sharp disagreements on whether commercial is a practice or a product and whether AI will elevate our profession or eliminate it.
• 1:28
  SPEAKER_01: So we've got plenty to dig into.
• 1:35
  SPEAKER_00: Absolutely good to be here, Nikki Keep.
• 1:37
  SPEAKER_00: Yeah, thanks, Nikki.
• 1:38
  SPEAKER_00: Thanks for having us.
• 1:39
  SPEAKER_01: Great.
• 1:40
  SPEAKER_01: Well let's dive in because the report itself, and I'm gonna come to you first, Patrick.
• 1:44
  SPEAKER_01: The report itself, for listeners who weren't in the room, tell us what's the single most surprising actionable finding in this year's data.
• 1:53
  SPEAKER_01: And what does this tell us about where US public procurement genuinely stands right now?
• 2:00
  SPEAKER_00: Yeah, so I think one of the most surprising findings to date, we know the survey is yet to be complete, is that we see a high demand response for AI or the need for uh employees and organizations to onboard this AI technology.
• 2:18
  SPEAKER_00: So what we do is we see this uh high demand for organizations and from organizations and employees to onboard uh artificial uh artificial intelligence uh technology.
• 2:31
  SPEAKER_00: And um and then, you know, contrary, we also see that for the organizations who have onboarded that technology, there's a low adoption rate.
• 2:39
  SPEAKER_00: So that surprises me.
• 2:41
  SPEAKER_00: Uh but beyond that, what I think it does is it kind of opens the door for a lot of conversations and one that we're pretty passionate about, and that is this you know, obligatory or discretionary adoption versus, hey, um, you know, let's do some sort of really bold and kind of forward-leaning organizational change management.
• 3:00
  SPEAKER_00: Uh, pick the right tool, make sure that our uh our folks are fully on board with the need for the tool and the way the tool is gonna enhance our business, and then let them know that in fact that this is not a discretionary move.
• 3:14
  SPEAKER_00: This is in fact a uh uh an obligation of how any organization is gonna go ahead and conduct their business operations.
• 3:21
  SPEAKER_00: So yeah, that was a that was a surprise finding for me.
• 3:24
  SPEAKER_01: For sure.
• 3:25
  SPEAKER_01: Think what what surprised you?
• 3:28
  SPEAKER_02: Hey, Nikki, yeah, I think it's um this finding is kind of in line with what Patrick was saying, where he's talking about, hey, there's this desire for an enhanced skill set with technology, but low adoption rate, low usage.
• 3:39
  SPEAKER_02: Um it's it's actually the training budget as well as the training resources, right?
• 3:45
  SPEAKER_02: So at the same time, the workforce is demanding this higher digital acumen AI capability.
• 3:51
  SPEAKER_02: You're seeing that um less than half of the organizations believe that they have adequate training budget, and just a little over half think that they have the right resources in place.
• 4:00
  SPEAKER_02: And then if you split that data, what really, really surprised me was I guess because I'm biased coming from government, I would have thought that we would have been in a in a poorer position than industry because there's always this weird desire to think it's better on the other side.
• 4:12
  SPEAKER_02: Yeah.
• 4:13
  SPEAKER_02: Industry uh from our data at least was in a far worse position in terms of their confidence and believing they had adequate budget and resources.
• 4:20
  SPEAKER_01: Yeah, yeah.
• 4:21
  SPEAKER_01: Fascinating.
• 4:22
  SPEAKER_01: So think you then argued commercial is fundamentally a product going up against the position that it's practice.
• 4:29
  SPEAKER_01: So talk to us, talk us through that.
• 4:31
  SPEAKER_01: What actually what's actually at stake in that distinction and why does it matter for how organizations structure and resource their commercial teams?
• 4:41
  SPEAKER_02: Well, I you know, so it's a debate, so we took extremes, right?
• 4:45
  SPEAKER_02: One is that it is either this or it's that.
• 4:46
  SPEAKER_02: And the reality is there's it's more nuanced than that.
• 4:49
  SPEAKER_02: But the report is finding that that understanding of commercial is being treated as one or the other by the community.
• 4:56
  SPEAKER_02: All right.
• 4:57
  SPEAKER_02: So it doesn't not everyone sees it as the same or as a you know a similar combination of things.
• 5:02
  SPEAKER_02: Um so the problem with that is is at least we've seen from the war department side is this like push to adopt, and I'm making funny ears right now, to adopt commercial processes or practices in buying things that traditionally, you know, you might not consider to be commercial, um, like like weapons and stuff like that, right?
• 5:21
  SPEAKER_02: And so we we wanted to stoke the debate around this idea that it's and when we say it's a product, we don't just mean simply coding something or classifying it as commercial.
• 5:29
  SPEAKER_02: It's really saying that when you do that, when you give it that categorization, it means that it's been washed up against the rocks of the market and the market has had those effects on things like pricing, risk, you know, um alternatives have been shaken out, you know, um that there's a total addressable market beyond the government, so that the government can rely on just going off of price.
• 5:50
  SPEAKER_02: And the government can rely on that supplier because they know they're not going to go out of business if the government dries up during a continuous resolution or something happens with the budget.
• 5:59
  SPEAKER_02: Um what we've seen when you get it wrong is people just start claiming things are commercial and ask you to do things like treat a company differently simply because they're non-traditional, so they should get commercial treatment when that has nothing to do with their financial status, their ability to track cost, or what that product can be delivered as, right?
• 6:20
  SPEAKER_02: And once you've sort of added them in as your solution, and there's no other alternative because they were truly a defense-unique source, sole source, you've lost all the ability to gather the data you need to make better business decisions, which reduces the government's ability and the public's ability to buy more mission when it's necessary.
• 6:36
  SPEAKER_02: And that's sort of what we've seen with our work in munitions, right?
• 6:39
  SPEAKER_02: It's every time that we chose not to get that information or made a bad deal, that got baked into the process and eventually found its way into reducing like even what we asked for.
• 6:49
  SPEAKER_02: We don't even believe we can ask for that much anymore because it's really affected us.
• 6:52
  SPEAKER_02: So it really matters to get it right.
• 6:54
  SPEAKER_02: I think it's a little bit of both, but we need to know when we're using commercial to define the way we behave and when it has some effect on the things we ask for or how we treat a product.
• 7:04
  SPEAKER_02: And we don't just say use the process every time it's commercial.
• 7:08
  SPEAKER_02: We say like there's parts of the process that are risk-based, make sense based on market influences on that product.
• 7:14
  SPEAKER_01: Yeah, yeah, absolutely.
• 7:16
  SPEAKER_01: So um, Patrick, let's look at the argument that you made because you took the elevate side of the AI debate and you argued it strengthens rather than replaces our profession.
• 7:26
  SPEAKER_01: So, what convinces you of that, and what do you think the eliminate argument uh gets gets wrong?
• 7:34
  SPEAKER_00: Yeah, um, so lots of thoughts on that, you know, based on our discussion.
• 7:38
  SPEAKER_00: But so let me name a couple that just are absolutely top of mind, and that is number one, and I'm looking at this through the lens of being a practitioner.
• 7:46
  SPEAKER_00: Oh, by the way, now with someone who helps sell an AI-enabled technology.
• 7:50
  SPEAKER_00: Um, we never have conversations around replacement because what we want is only to harness and create all of that contract data uh that that exists, typically in a static fashion, into something that is very useful, uh information uh that is going to enable these really complex business decisions.
• 8:11
  SPEAKER_00: Because now, as we know, contracts are more complex and not any necessar necessarily more important than they were in the past, but contracts now harness all sorts of terms and conditions that go way beyond what we would have considered uh you know, standard 20 years ago.
• 8:27
  SPEAKER_00: And this is just within the cyber and InfoSec environment, never mind all of the other uh regulatory and um and legal framework that we find ourselves in today.
• 8:37
  SPEAKER_00: So um I believe that number one, we need to define what the contracting profession is.
• 8:43
  SPEAKER_00: Is it every person that currently maybe you know contributes to the contract lifecycle?
• 8:49
  SPEAKER_00: Or are they, you know, are we gonna start thinking about it in the folks who truly understand and are moving the needle regarding these strategic business decisions?
• 8:59
  SPEAKER_00: So what I would submit is this is that you know, AI is gonna give the latter uh employee or professional more time to take all of the administrative they don't have to do, which is now done faster, more accurately, and turn that into an opportunity to become the strategic business advisor to any uh one of the C-suite in any given corporation.
• 9:22
  SPEAKER_01: Yeah, absolutely.
• 9:24
  SPEAKER_01: It's a great argument.
• 9:25
  SPEAKER_01: Um and I think we need to move on to our final question now.
• 9:29
  SPEAKER_01: So putting that benchmark data and the debate together, if an organization wanted to act on just one insight from today to close the gap with top performers, what should it be?
• 9:41
  SPEAKER_01: And how would they know it's working?
• 9:43
  SPEAKER_01: So think.
• 9:45
  SPEAKER_02: Yeah, I mean, I think if we summarize what Patrick and I both sort of laid on in terms of what surprised us in the data, is I think organizations need to, to Patrick's point, think about like what is what are we focusing on when we call it the profession, right?
• 9:58
  SPEAKER_02: Like what are we gonna focus on?
• 9:59
  SPEAKER_02: And then really addressing that gap between the need for technical proficiency and the next iteration of how we do our profession and the amount of resources we're putting towards it, right?
• 10:09
  SPEAKER_02: So I mean, at the end of the day, things come down to budget and money, and like your priorities are where your money is.
• 10:14
  SPEAKER_01: Yeah.
• 10:14
  SPEAKER_02: And it it doesn't seem like um that that the prioritization and the human capital development has caught up with the speed of change.
• 10:23
  SPEAKER_02: And so we've definitely got to deal with that.
• 10:25
  SPEAKER_01: Yeah.
• 10:26
  SPEAKER_01: And final word from you, Patrick.
• 10:28
  SPEAKER_00: Yeah, sure.
• 10:29
  SPEAKER_00: I guess maybe I'll limit mine to, you know, when you consider the need to onboard this AI-enabled technology, uh, adoption rate is a great scorecard.
• 10:39
  SPEAKER_00: And that that rests on the shoulders of the organization as well as the employee.
• 10:44
  SPEAKER_00: And I think it's a good litmus test to see, you know, uh, are we maintaining and attracting the best of the best?
• 10:51
  SPEAKER_00: So we continue to just bolster the contracting profession.
• 10:56
  SPEAKER_01: Fantastic place to leave it.
• 10:58
  SPEAKER_01: Patrick, thank you very, very much.
• 11:05
  SPEAKER_01: Um I think that's all we've got time for, unfortunately, uh, for this episode of the The Leading Edge.
• 11:12
  SPEAKER_01: But if you want to dig into the 2026 US Public Procurement Benchmark Report yourself, make sure you sign up for the webinar on September 10th.
• 11:22
  SPEAKER_01: Thanks for listening live at World Congress.
• 11:24
  SPEAKER_01: If you liked what you heard, stay tuned for the next episode where we'll continue to explore the ideas, innovations, and leadership shifts shaping the future of commerce and contracting.
• 11:35
  SPEAKER_01: Until then, keep challenging, keep adapting, and keep leading.
• 11:40
  SPEAKER_01: Thank you.