Small business owners and startups are hyper-sensitive when evaluating a government RFP or opportunity. Bidding is a big investment. Teams look for any sign that someone else might already be preferred. And the timeline of opening, close dates, and bid conferences are dissected for clues like a horoscope.
Talking to entrepreneurs over the past months about really innovative procurement opportunities they mentioned ‘time’ a lot. “Anything less than 28 days and we cannot build a consortium with a larger firm” or “That thing is open for just 11 days. That’s so cooked.” (= someone else got the inside track).
These comments capture much of the concern. And 28 days seems to be the common breaking point. If things are open longer they are fair and I can actually put a bid together without embarrassing myself with corporate partners who are less agile. But anything below 28 days creates stress, anxiety and outright distrust.
So we prepared a little sample here of 294 recent innovative procurements in cities in the US, UK, Canada and Ireland to see how prevalent this issue is. It is a complete set of procurements that actively promote new ideas (which makes them compelling to small business and startups). And yet, less than 40% are open for more than 28 days.
So we carried out another experiment. We emailed each procurement official listed in transactions open for 21 days or less and asked them to extend their deadline to 28 days from publication. We explained that our data shows how small businesses, MWBE, startups and non-profits feel about such a short timeline and are likely not to bid for feeling both excluded and expressed concern about the fairness of the proposals.
90% of officials got back to us within 48 hours, which is great. 100% said they would not be able to extend their deadline.
They were citing three reasons (in order of prevalence).
- ‘Wait until the end of the Q&A period’ when we will know if more vendors ask for an extension. (On average, that period ends 1 week before submission, meaning that vendors are losing 70% of their proposal period before knowing if they will have enough time)
- ‘We think the vendors will be fine’ in responding in this timeframe.
- ‘I have asked for an extension and we discussed it with the team’ and project constraints (e.g. expiry of a live contract, budget cycle) force us to stick to this timeline.
To me, the above shows just how long we have yet to go to change mindsets in procurement toward a culture and workflow that actually puts small business first. Procurements typically take 6+ months to prepare, so an extra 7 days should by no means be a stumbling block if we care about more competition or participation by small business.
We at Citymart have taken the following learning away from this: Going forward, our team will not classify a procurement as ‘innovative’ unless it is open for at least 28 days unless we receive a formal justification that explains an exceptional circumstance to justifies a shorter timeframe (if you want a good small business ranking for your city, listen up!).
The good news is, that it is another really easy fix. Procurement leaders should create guidance and a culture that mandates at least 28 days on all transactions, making shorter timeframes an exception that needs to be justified, not just internally, but to the small businesses that will be most affected.
Would love to hear your thoughts on this.
Originally published at http://blog.citymart.com.