Many challenges plague public procurement and to most people, it is the many scandals and inefficiencies that come to mind first. Potholes that don’t get fixed, white elephant infrastructure projects and politicians that abuse their power by putting their business interests first.
The gulf between governments, especially at the local and city level, and the business community is immense. In cities like Baltimore, less than 1% of business is registered to receive notifications on local bid opportunities. And the mayor of Baltimore just resigned amid a huge contracting scandal.
Shifting the narrative
But what if we shift our narrative — from the plagues of contracting to its powers to improve economic development and quality of life? We want to show what public procurement could be. We believe public procurement could be 10 times fairer and more efficient, and deliver effective public services.
At the global summit of the Open Government Partnership in Ottawa, we want to highlight some of our amazing partners who are already working on this transformation. We are thrilled that Sascha Haselmayer from Citymart will join us during the “Making public procurement 10 times better” session that we are co-hosting with Transparency International’s health program.
Sascha is one of these rare reformers who has realized that procurement can achieve better outcomes for cities and deliver business opportunities to a broader and more diverse group of vendors. He and his team have worked on procurement for over 10 years and have shown that procurement can be effective and fun. And it can attract huge followings — in 2014, some 55,000 entrepreneurs engaged with their Barcelona Open Challenge!
As a preview to our conversations in Ottawa, we want to share what Sascha and his team have learned in their work supporting city reforms all over the world. These three learnings stand out because they are so easy and scalable.
1. Open up to innovation to attract small & disadvantaged suppliers
Citymart found a clear correlation between the degree to which procurements are open to new ideas and the participation rate of small and disadvantaged suppliers. You don’t have to have a black belt in innovation to develop a scope that allows suppliers to present a variety of ways to meet your requirements.
Every bit of effort will make a difference. For example, define desired outcomes instead of detailed specifications to allow suppliers to showcase their strongest plan for delivering the best results, and design evaluation criteria accordingly. Also, think about the whole lifecycle of the project to get a better perspective on how a supplier can earn trust through performance and build a full-scale operation.
2. Engage the market like you would recruit talent
Public procurement is an echo-chamber into the past — our previous suppliers will predominantly receive notifications from procurement systems. Also, arduous upfront registration and certification requirements, even those designed to give disadvantaged or social enterprises a leg up, add yet another barrier to discovering business opportunities. Governments that have transcended their procurement portals to find suppliers wherever they are, achieve much better outcomes.
Dublin, for example, engaged over 1,200 vendors and awarded a last mile logistics contract to Passel, a startup from Australia that had never worked with government before and incorporated in Dublin to launch operations. Similarly, the Sacramento Area Council of Governments (SACOG) found 30 local small businesses (including 10 minority and women-owned business enterprises) for their bike share request for proposal, or short RFP — 90% reported they would have never found out about the opportunity otherwise.
3. The basics, the basics!
To be open, fair, and competitive, procurement opportunities have to be viable. Give suppliers enough time to participate. Citymart found that less than 40% of procurement opportunities that are designed to be “innovative”, i.e. open to new ideas and small business, are open for 28 days or more, which is the absolute minimum time a small business or startup needs to find partners for a bid.
Only 60% of US municipal governments (and many internationally) use procurement platforms that have free registration for suppliers and offer easy access to vital public information. This saves suppliers from spending hours sifting through irrelevant information, paying $50–150 to download a scope of works, or paying a $100–1,000 monthly subscription fee to access information or receive notifications.
We love these lessons and insights! Opening procurements, replacing technical specifications with measurable outcomes, and engaging every possible supplier are very effective tactics that we want to help scale to make procurement 10 times better.
What do you think?
I wrote this article originally with Kathrin Frauscher of the Open Contracting Partnership and it was originally published at Apolitical.