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Mayors: We Need to Talk About Procurement

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To Our Nation's Mayors and City Leaders:

The high-profile challenges around Healthcare.gov forced a public conversation about government technology for the first time. However, the widely reported and discussed missteps are more representative of symptom than disease. Symptoms of a deeper, foundational problem with how government approaches the acquisition of technology -- a broken system that is fundamentally at odds with how modern technology works.

These symptoms are apparent at every level of government -- federal, state, local -- even though we often don't hear of them. It's not just healthcare.gov. It's California's payroll system, Miami-Dade County's school district enterprise software system, NYC's Personnel data system, and thousands of other taxpayer-funded projects in municipalities around the country. And, if you take a closer look, it's evident that procurement played some role in each of these project's challenges.

As with the rest of our governing documents, procurement policies were written decades ago when technology looked vastly different than it does today. Procurement policies were drafted around the purchase of buses and street signs, not databases and websites.

These policies were not, however, enacted without reason. They represented protections enshrined in values worth fighting for -- like fairness, competition, and minimizing unnecessary spending risk.

But these protections have become less of a shield and more of the labyrinth. The resulting rules and processes are complex and fail to uphold the values they were put in place to preserve. The system has become so difficult to navigate that many smaller qualified companies -- vendors offering high value tools at reasonable rates -- are excluded. And a handful of large, entrenched vendors, usually those who have procurement expertise in house and deep pockets to shoulder burdensome processes and lengthy sales cycles, are favored. Very few new companies are entering the government IT market, and, as evidence, most all of the top 25 government contractors were founded before 1976.

Because of the high barriers to entry, vendor choice is limited and as a result governments are often shut off from the rapid innovation that has transformed consumer technology as we know it over the past decade. This system simply doesn't work in today's rapidly evolving technology market.

The federal government has taken steps to address this issue, with initiatives such as RFP-EZ, an interface for easier online registration and bidding on small-dollar federal IT contracts. With five pilot contracts, RFP-EZ's online bids averaged 30 percent lower in price than those received through the traditional procurement platform of FedBizOpps. The pilot period also attracted bids from 270 businesses that had never before attempted to work with the Federal government. These early experiments indicate potential for positive change, but change is slow at the federal level, and procurement reform is a major undertaking at any level of government.

That's why there's a huge opportunity for mayors and city managers to lead in IT procurement improvement at the local level. Mayors and city managers are already showing they have the autonomy and vision to lead and make real change.

For example, Philadelphia's FastFWD program lets the City incubate and test new ideas before committing to a full-fledged project, while their Chief Data Officer has led experiments with a developer-focused outreach and bidding process for small technology contracts through GitHub. Kansas City, Mo. has also formalized its commitment to creating alternative channels for the City to work with startups through an executive order creating the Innovation Partnerships program that lets local entrepreneurs apply to pilot ideas using city resources.

Chicago's Chief Information Officer Brenna Berman is hosting a series of roundtable discussions with local civic entrepreneurs to inform policy overhaul recommendations that can make procurement more accessible for the developers and residents who want to have an impact on City technology. Meanwhile, thousands of local government agencies from North Miami Beach to New York City are using tools like SmartProcure (which is free to governments) to make better purchasing decisions informed by data.

If mayors and other city leaders find ways to make procurement work better for their city, the result will be greater vendor choice and the inevitable benefits that accrue from choice.

We encourage each of you to lead the way in helping drive critical changes in an outdated procurement process and, in so doing, continue to pave the way for government that works for us all here in the 21st century.

Onward,
The Code for America Team