Urban Innovation

To Make Cities More Efficient, Fix Procurement To Welcome Startups

March 4, 2016  • Jay Nath & Jeremy M. Goldberg

In 2014, an amazing thing happened in government: In just 16 weeks, a new system to help guide visually impaired travelers through San Francisco International Airport was developed, going from a rough idea to ready-to-go-status, through a city program that brings startups and agencies together. Yet two and half years later, a request for proposals to expand this ground-breaking, innovative technology is yet to be finalized.

For people in government, that’s an all-too-familiar scenario. While procurement serves an important role in ensuring that government is a responsible steward of taxpayer dollars, there’s tremendous opportunity to improve the way the public sector has traditionally bought goods and services. And the stakes are higher than simply dealing with red tape. By limiting the pool of partners to those who know how to work the system, taxpayers are missing out on low-cost, innovative solutions. Essentially, RFPs are a Do Not Enter sign for startups — the engine of innovation across nearly every industry except the public sector.

Essentially, RFPs are a Do Not Enter sign for startups — the engine of innovation across nearly every industry except the public sector

In San Francisco, under our Startup In Residence program, we’re experimenting with how to remove the friction associated with RFPs for both government staff and startups. For government staff, that means publishing an RFP in days, not months. For startups, it means responding to an RFP in hours not weeks.

So what did we learn from our experience with the airport? We combined 17 RFPs into one; utilized general “challenge statements” in place of highly detailed project specifications; leveraged modern technology; and created a simple guide to navigating the process. Here’s a look at how each of those innovations works:

The RFP bus: Today, most RFPs are like a single driver in a car — inefficient and resource-intensive. We should be looking at what might be thought of as mass-transit option, like a bus. By combining a number of RFPs for projects that have characteristics in common into a single procurement vehicle, we can spread the process costs over a number of RFPs.

Challenges, not prescriptions: Under the traditional procurement process, city staffers develop highly prescribed requirements that are often dozens of pages long, a practice that tends to favor existing approaches and established vendors. Shifting to brief challenge statements opens the door for residents, small businesses and entrepreneurs with new ideas. And it reduces the time required by government staff to develop an RFP from weeks or months to days.

Technology that enables the process: This was critical to enabling San Francisco to combine 17 RFPs into one. Without the right technology, we wouldn’t be able to automatically route bidders’ proposals to the appropriate evaluation committees for online scoring or let bidders easily submit their responses. While this kind of procurement technology is not new, it’s use is still uncommon. That needs to change, and it’s more than a question of efficiency. When citizens and entrepreneurs have a painful experience interacting with government, they wonder how we can address the big challenges if we can’t get the small stuff right.

A roadmap for entrepreneurs: All too often, for citizens and entrepreneurs, procurement is a bewildering and byzantine process. This arises from the fact that a number of agencies have a role in procurement, leading to information strewn across multiple websites. By developing a simple and clear guide to procurement, we’re arming entrepreneurs with the same information that only established vendors once had.

What’s next? With an emerging set of procurement innovations, our team is now looking at expanding these practices in San Francisco’s government. Specifically, we’re looking at quarterly RFPs for specific categories like technology procurement that any agency can participate in.

We also are working with regional partner cities, such as Oakland, to explore adopting and testing these practices. Ultimately, we plan to publish an open-source playbook for others to contribute and improve upon these ideas for reimagining the procurement process. There’s more work to be done, but our experiment is revealing the potential for reducing real barriers to collaboration and innovation in government. We can do better that what is currently in place, and we hope you’ll join us on the procurement bus.

Jay Nath is the chief innovation officer in the mayor of San Francisco’s office of civic innovation. Jeremy M. Goldberg serves as the startup in residence director. This piece also appeared in Governing.