It’s Infrastructure Week, and everyone is saying that it’s #timetobuild. We agree! The next 5-10 years offer a once-in-a-generation opportunity for hundreds of US cities to upgrade to the smarter, cleaner and greener systems their citizens want and expect. To buy these different things, cities need to be able to buy things differently. So, let’s talk about procurement! Below are some of the creative ways cities can improve procurement processes to achieve better outcomes for their communities.
Working with cities can be hard. In part, it’s because cities are, rightly, risk averse, and have no opportunity to swing and miss. This is compounded by the fact that many of the most innovative urban solutions come from engineering, infrastructure, and social technology startups that don’t have the capacity or resources to identify and connect with the cities that need their solutions the most. Even when a city knows what they want and how to ask for it, public procurement processes are often biased against new, cross-cutting solutions.
To buy different things, cities need to be able to buy things differently.
Every day, cities fail to leapfrog to modern, smart, sustainable, and resilient infrastructure, while innovative urban solutions simultaneously struggle to scale. This is a problem we need to (and can) solve by prioritizing procurement innovation. To make procurement work well, we need three things:
- Knowledgeable and demanding buyers (cities, counties, utilities),
- Capable sellers (engineering and technology firms), and
- An efficient system that connects the two.
City leaders can’t achieve all three on their own, but below are some examples of how cities can jumpstart procurement to achieve better results for their citizens:
Ask for Help: Challenges and Requests for Information (RFI) work best when cities define challenging, cross-sector problems to solve, without prescribing solutions. Challenges and RFIs signal that the city issuing them is an engaged and committed public partner, and this motivates innovative suppliers to deliver integrated solutions tailored to city needs. These types of open calls or contests can significantly expand the range of bids, and because they have lower barriers to entry are particularly attractive for small and medium enterprises (SMEs) and startups. Cities should consider copying Boston’s wicked coolRFI asking citizens and startups to come up with solutions (ps. note the focus on shifting away from pilot projects and toward full-scale, deployable initiatives!), or Philadelphia’s FastFWD, a new kind of local business accelerator designed to create a pathway for new players to bid on city work.
Be Transparent: As the City of Austin’s Ted Lehr recently said, “pitches [to cities] for…emerging technologies are often lost in translation.” Solving that problem falls primarily on solution provider’s marketing and business development professionals, but there are some things cities can do to help. The most important thing cities can do to help is transparency. Open data, open planning sessions, open bidding conferences – all can help startups and other companies better understand how, when, and where cities can and want to connect with companies about solutions.
Make Things Simple: Public procurement rules were designed to protect taxpayer dollars from getting spent unwisely. But when rules and regulations are regularly causing delays and keeping cities from innovating, then they need to be revisited. One step is to ensure that pre-qualifying requirements are achievable by early stage or small businesses. For example, when bidding for public sector contracts companies in São Paulo only need to display their tax compliance at the time of bidding to pre-qualify for the contract. US cities, often constrained by state and federal rules, should look to São Paulo and other international peers for models they can use within their respective boxes while petitioning states for more flexibility.
Get the Word Out: There has been a positive trend in cities towards eProcurement, which ensures all procurement opportunities are visible online through a single portal. This has been great for buying regularly used products and services –like printers and plumbers– but existing eProcurement systems are not well designed for buying big infrastructure solutions. That is because procuring systems (not widgets) is extremely complicated, and building systems right requires the right partner(s). You wouldn’t shop for your house through Costco, right? To leverage the efficiency of eProcurement for infrastructure, city departments should engage their procurement officials – along with engineering and infrastructure technology companies – sooner rather than later. Whenever possible, cities should also advertise upcoming RFPs well in advance of when they are issued, which ensures the best bids. Taking both of these steps helped Australia realize 20% savings on individual project costs.
Level the Playing Field: Changing proposal or bid evaluation can help ensure that all firms start on equal footing, regardless of whether they are big, small, new, or old. For example, Total Cost of Ownership – a strategy employed by the private sector for years – enables cities to prioritize sustainable and long-term cost savings strategies over short-term benefits and the lowest price. Along the same lines, cities should consider following Kansas City’s lead and establish a Sustainable Procurement Ordinance that leverages the planning and design tool Envision, and applies equally to both products and services.
And of course, we think all cities should join the Atlas, because our goal is to inspire cities about how they can creatively solve their most pressing infrastructure challenges, and to provide the actionable information needed to pursue those solutions. For example, we’re working to capture the specific language a city used in its procurement documents to get an innovative project built (e.g. what does an RFP look like for a stormwater harvesting and direct use project? Or for an advanced energy storage microgrid?).
Working with cities is hard, but it doesn’t have to be. And to ensure that cities can upgrade to the systems communities want and demand, it can’t be any longer. That is why procurement matters.