Why Procurement Innovation Taught Us to Stack the Cards for Small Business.
We started out with a simple idea: every year thousands of new solutions from start-ups and urban innovators enter the market. We built data on thousands of solutions to help government buyers discover these new options through procurement, to shorten the cycle of adoption and avoid costly re-invention.
What we discovered along the way was a much bigger challenge: even in known industries and solutions, government only speaks to about 1% of vendors — with mostly small, minority & women-owned businesses excluded from government opportunities.
“Innovation was just the tip of the iceberg! We saw that not just new solutions, but an incredible 99% of all small businesses are excluded from public procurement opportunities.”
Our eyes were opened to this issue as a side-effect of our successful, plain language BidSpark communications campaigns for city procurements. I recall our surprise to see that in 2016 in Long Beach we had a 30% participation rate by disadvantaged businesses, 70% responding that without Citymart they would have never learned about the opportunity.
Fast-forward to 2018 and our cohort analysis of procurements in dozens of cities in the North America and beyond, we got a better grip on this gap in the market: 89% of responses submitted through BidSpark come from small businesses and 42% of bids from MWBE — with 90% in both groups responding that they would have never found out about the opportunities if it hadn’t been for a BidSpark notification.
Missing out on innovations were just the tip of the iceberg! Our analysis of publicly accessible public procurement databases shows that just 1% of local businesses are registered to do business with government — and of those we estimate that 30% miss out on relevant notifications through the limitations of NIGP / NAICS or other industry classification codes. The good news was that our technology to detect innovations was suitable to also detect any business that can meet a public procurement need.
Sparking action from insight
At Citymart, we used this learning in two ways. Firstly, we clarified the goal of BidSpark: to find and recruit any vendor that can meet a public procurement need. And to give these vendors a voice to recommend improvements to their procurement experience, every step of the way. Secondly, we have worked with our customers to implement best practices to improve the experience of the entire public procurement process, to get that A+ rating from small business.
If you are interested in how 56 major US cities rank on our Small Business Accessibility Score, check out our quarterly ranking.