This is the third article in a five part series about how procurement can be an entry point for innovation in cities, rather than an obstacle to it. A freely and publicly available procurement toolkit – piloted by seven U.S. cities – accompanies this article series. (Read about the toolkit in the first article in this series here.) This work is the result of a collaborative initiative of re:focus partners and The Atlas Marketplace, funded with the generous support of the Kresge Foundation.
Procurement today is often reactive and driven by existing resources. Officials look to current budgets and plans to see what their agency can afford. In many cash-strapped smaller cities, the answer is: not much. Starting with what’s in your wallet might be exactly the right approach when it comes to run-of-the-mill purchases like office supplies.
But the creative solutions required to address big hairy problems—like climate change, enormous deferred maintenance backlogs, and rapidly shrinking service areas—are anything but run-of-the-mill. Ideally, the processes used to procure solutions to these problems should be proactive and enable cities to find new ideas, new partners, and new resources. The Clean Water Partnership, among other recent innovative procurements, proves that this is possible.
The term procurement encompasses all the steps that governments or public authorities take to obtain goods, such as computers or desks, or services, like healthcare or construction of a water treatment plant. The State of Hawaii’s Procurement Office offers a useful example of the full life-cycle of a typical procurement process (see below). The process can be daunting and time-consuming, even for experienced staff and companies who frequently bid on projects.
It’s easy to make sweeping statements about how government procurement (or government in general) is broken. It’s not.
Rather, our procurement systems were designed to meet a narrower set of needs than many government agencies have today. Most long-standing procurement systems were built to be defensive. They were designed to protect taxpayers from fraud and corruption, standardize processes to improve efficiency, and prevent discriminatory practices.
These are still important objectives. We don’t want systems that are corrupt, inefficient, or discriminatory. However, focusing on only these defensive priorities makes it challenging to achieve other outcomes that we now expect from government agencies: like having nimble technology systems and services.
There are enormous differences between buying office chairs and transit systems—but cities often use remarkably similar processes to buy and build both. While having standardized processes can improve efficiency in theory, in practice, it often limits effectiveness.
Procurement systems that are primarily defensive are often stumbling blocks—if not outright brick walls—to finding innovative solutions, working with new partners, and iterating to create system-wide improvements over time. These proactive steps are essential for building resilience.
“We had heard a lot about RFIs, competitions, and performance contracts but didn’t know if or how to get started using any of them. Working through the toolkit helped us create buy-in for pursuing some of these innovative procurement tools.” -Shaina Kilcoyne, Energy and Sustainability Manager, Municipality of Anchorage
A strong offense is an important part of a good defense. If we don’t think about procurement differently, government officials at all levels are inevitably going to find it easier to replace failing infrastructure systems with the same old fixes rather than transitioning to more sustainable systems. That is a terrible outcome for residents, taxpayers, and companies alike. Cities will continue to struggle to solve systemic problems, and private sector innovators will continue to find it hard to engage with cities to deliver better outcomes—even when solutions are readily available.
Nowhere is this clearer than in the infrastructure sector. Even when a city knows what it needs and how to get it, public procurement processes are often biased against new, cross-cutting, or resilient solutions.
Cities and counties like Atlanta, Boston and Prince George’s County have been experimenting with new tools, including Requests for Ideas (RFIs), competitions and challenges, and performance contracts across a wide variety of sectors and applications. Boston, for example, has spent years developing and refining its Smart City Playbook. Smaller cities rarely have the capacity to experiment in similar ways.
RFIs, Competitions, and Performance Contracts are relatively new procurement tools. All three are more open-ended and outcome-oriented than conventional procurement tools (like RFQs and RFPs), which require the terms of a product or service to be clearly defined at the outset. The result is that each of these tools can produce a range of creative solutions—from the idea generating and data gathering phases of a project through to financing and implementation—and enable cities to tap into different ideas, partners, and resources than they would otherwise normally have at hand.
All of these tools can be applied to help time- and budget-constrained local officials start now to address critical infrastructure challenges, including flood, drought, extreme heat, sea-level rise, storms, population changes, and more. However, not every tool is well suited for every situation. Each one requires different levels of local capacity and expertise. That’s why sorting through which tool is the best match for your city’s current needs, resources, and technical capacity is one of the main aims of the procurement toolkit associated with this article series.
Just as it is possible to develop a bad RFP, it is also possible to have terrible RFIs, Competitions & Challenges, and Performance Contracts. Procurement success depends on framing problems well and setting effective procurement terms. That’s why the procurement toolkit associated with this article series offers a guided path through a series of interactive templates to help local officials make smart early-stage procurement decisions and lay the foundations for better long-term climate, equity, and system resilience outcomes.
Part four of this article series discusses the two most important things cities can do to improve outcomes within their *existing* legal processes. It’ll be published on Thursday, November 8th. In the meantime, join the conversation on Twitter!
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