5 proven steps to help cities buy smarter

Tue, 2015-09-15 21:50 -- Kevin Ebi

To see what’s wrong with the government procurement process, one just needs to look at Philadelphia. It’s not a cheap shot. Andrew Buss, the city’s director of innovation management, openly acknowledges it.

He’s hardly alone. Shyam Kannan, managing director of planning for the Washington, D.C., Metropolitan Area Transit Authority, says the rules and processes for procurement are so onerous they can be a distraction from your primary job.

“We used to be a transit company with an accounting problem,” Kannan told attendees at Smart Cities Week. “Now we’re an accounting company with a transit problem.”

But they, like other innovators on the procurement panel at Smart Cities Week are trying and testing new ways to improve it.

An effort to educate
In Philadelphia’s case, the city developed a video that tries to explain the process. Once you’ve found an opportunity and have waded through the detail-packed request for proposals, you then have to apply online. There are five different websites for that. Often the one you have to use is a bit of a mystery.

That there’s even a video now to explain that is a success.

“It seems like a small thing, but vendors love it,” Buss said. “They find it very informative and say that it helps them learn how to do business with the city, which is not an easy process.”

Complicated processes limit your pool of available suppliers as Jacha Franklin-Hodge, Boston’s chief information officer knows from experience. Before he started working for the city, he worked at a design firm.

“We never did a city RFP,” Franklin-Hodge said. “It wasn’t worth the trouble.”

Simplifying the process and reaching out to potential vendors to let them know about opportunities give you more, and better, solutions providers to choose from. It fosters more competition.

Let vendors be the experts
RFPs typically leave vendors little – if any – room to innovate. They typically tell the vendor exactly what they will do and how they will do that. That, too, is an outdated approach.

“Henry Ford famously said that if he were to have asked his customers what they wanted, they would have told him faster horses,” Franklin-Hodge said. “We buy a lot of faster horses in government. We often miss out on new ways to solve the problem.”

Boston is working toward something that it calls a mission-driven approach to writing RFPs. Instead of prescribing a laundry list of mandatory features, the city outlines its goals, giving vendors some latitude to provide their expertise to offer more innovative and effective solutions.

Establish a testbed
Dan Hoffman, chief innovation officer for Montgomery County, Maryland, says there is no substitute for knowing whether or not something will work before you start the procurement process. He told a painful procurement horror story.

The county wanted to install laptops in fire trucks, helping firefighters navigate, among other things. Everything went wrong with the procurement process and it took five years to buy the laptops and get the installed and turned on. By then, all the technology was so far out of date that they were never used for anything useful. Even the cellular connection in the laptops lagged so much that the turn-by-turn directions came too late for truck racing to a fire at high speed.

But making matters worse, the county invested in very expensive, ruggedized laptops. It was only after they were installed that the county realized that cheaper laptops would do. Something that’s bolted to a fire truck isn’t going to fall off and break.

Now the county is a leader in testing new products. It uses a senior living facility as a test platform for products relating to air, water and health. Farmers are being selected for agricultural pilots. Even a corrections facility will soon become a test facility.

In addition to proving technology, it helps build support for those projects.

“This is where we can demonstrate and make these things real for the public,” Hoffman said.

Watch for unintended consequences
Even projects that seem like no-brainers can have unintended, negative consequences, and Kannan says it’s important that, when possible, you build guarantees or other mechanisms into contracts to protect you from them.

The transit system installed LED lights as part of its efforts to conserve energy and save money. But they use less energy because they use less heat. In the winter, it found that it suddenly had a problem with lights that were covered in ice and snow – a problem it had never had before. It cost money to clear then, an expense it had not planned on.

Cities and agencies are finding some protection in new contracts where the vendor finances improvements, such as LED lights, handles maintenance and assumes all risk over a period of time, for example, 10 years, before the capital improvement becomes the property of the city.

Those types of arrangements are becoming more common, especially as most cities and government agencies aren’t able to finance a 10-year project on their own due to their much shorter budget cycles.

Buy less more often
It’s not just vendors who hate the procurement process; cities don’t like to do it either. And that creates even more problems.

“We hate procurement so much that we try to do it as infrequently as possible,” Franklin-Hodge said.

The result is that a variety of somewhat disparate needs get bundled together into one single mega RFP. And the result of that is typically one system that ineffectively attempts to solve a number of disjointed problems.

His city is switching to smaller RFPs, which he says is already providing a number of positive returns. It reduces the risk of any one solution, since the city no longer has all of its eggs in one basket. It gives the city more proposals to consider, since more vendors respond when the requests are easier to respond to. The city also gets more modern technology and it’s not locked to any one vendor.

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Kevin Ebi is a staff writer and social media coordinator for the Council. Follow @smartccouncil on Twitter.

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