On Wednesday, June 6, Public Spend Forum convened a Technology Procurement Symposium to identify barriers to government’s adoption of emerging technology and to highlight companies of all sizes that are making a difference in the civic tech space. Held in Los Angeles, the Symposium featured comments from forward-thinking leaders like Mayor Eric Garcetti and Governor Martin O’Malley and case studies from people who are out in the field solving problems and creating good.
If you didn’t have a chance to attend online or in person, you can view the recordings from each session and download materials from the symposium here.
Panel 1 – Removing Barriers to Entry for Emerging Tech & Small/Diverse Firms
Opening remarks from Public Spend Forum’s Chairman Raj Sharma preceded a panel discussion focused on removing barriers to entry for emerging technology and small, diverse firms who want to bring innovative solutions into the public sector. Panelists reflected on how suppliers approach the public sector market with some trepidation because despite the massive opportunities in government contracting, there’s also a lot of pain and suffering associated with winning your first contract. Government procurement professionals need to keep this in mind and think about ways to bring more efficiencies into their processes if they want to benefit from innovative solutions that allow them to harness the best technology the private sector has to offer.
Raj asked the panel to share what they thought is driving this trend of civic technology. Shelly Kapoor Collins, an investor who leads the Shatter Fund, observed that it is so much easier to start a tech company now, thanks to cloud and open source technologies. Panelists agreed with the notion that today’s technology environment accelerates ideas and innovation while at the same time lowering overhead costs; however, government isn’t always able to take advantage of these benefits. This may explain why so much passion exists in the civic tech space, as technologists are natural problem solvers and those with philanthropic ambitions have no shortage of big public sector problems to solve.
Shelly Kapoor Collins of Shatter Fund describes how startups are leveraging cloud and open source technologies to stay lean and innovative
But, given the daunting challenges involved in navigating the government’s procurement process, the rewards have to be significant enough to merit a private company taking the time and effort to navigate the complex procurement process. Panelists agreed that costs of pursuing new opportunities in the government can be so high that failing to win the resulting contract can hamstring a small or emerging firm. This was a key theme throughout the symposium, with speakers offering solutions from micro and modular procurement techniques to a rethink of the entire RFP process.
Also discussed was the challenge of even getting started in the pursuit of government contracting opportunities. What does a new-to-government business even do to start a conversation with program and contracting professionals to get their products or services on the radar? Because technology is evolving so fast, many startup and emerging tech firms have solutions that no one would even consider, let alone describe in a solicitation.
Demystification is necessary, but so is the ability for contracting professionals to discover new suppliers and their solutions. This is a continuing goal of Public Spend Forum’s work in this area, as we work to develop tools and resources to connect buyers and suppliers earlier in the procurement process. Ultimately, solutions that make it easier for contracting officers to find suppliers and have meaningful conversations early enough in the process, when requirements can still be informed, will be critical enablers for government’s ability to take advantage of the best the private sector has to offer.
But there are challenges that can’t be solved by tools or technology, namely the fact that contractors often win contracts because they have the best business development team who knows how to navigate the complex procurement process, and not necessarily by the merits of their solution. Panelist Michael Hermus, former Chief Technology Officer at the Department of Homeland Security (DHS), shared as a case in point the “gamesmanship” that occured during their honest attempt at innovative procurement in the Flexible Agile Support for the Homeland (FLASH) procurement.
Hermus described how the FLASH team designed a simple pre-selection strategy of a video proposal and then a technical challenge. But what occurred was actually well-resourced companies bringing in outside resources to (in certain cases) feature style over substance. Hermus described receiving highly professional video proposals whereas the intent was for bidders to submit “something you could shoot with an iPhone.” And when it came time for the technical challenge, it was clear that some firms went out and recruited “professional challenge teams” to game the system, as opposed to giving their internal staff the opportunity to demonstrate current capabilities.
But there are definitely bright spots in the public sector’s ability to harness new and emerging companies, namely San Francisco’s Startup In Residence Program, which Sky Kelley, Founder and CEO of Avisare, credited as a pathway for connecting government with startups from all over the world. This is especially important in an environment where contract vehicles can lock agencies into using only those companies who earned a spot at the time of initial award. Programs like STIR enable agencies to do small pilot projects or microconsulting projects that don’t have to cost hundreds of thousands (if not millions) of dollars).
Sky Kelley of Avisare credits programs like San Francisco’s Startup in Residence program for connecting governments with startups all over the world
Ultimately there’s hope and opportunity to break down these barriers for not a lot of money, but it will take transparency and visibility into the process. And people like those on our panel session to continue sharing ideas and suggestions that those inside government (the ones actually doing the purchasing) can implement for positive change.
Case Study 1 – ProTech Innovation Across America
In our first case study of the day, Ty Levine of Ivalua presented “A Tale of 2 (Digitized) Cities,” to describe how Ivalua helps public sector organizations achieve control, efficiency, and visibility into how they spend their funds. For this case study, they focused on work provided to New York City, which as a city of digital natives, has some really amazing public sector initiatives.
NYC’s goal is fair, responsible, and timely procurement, but they recognize that achieving this goal relies not only on technology but on the people doing the work. For Ivalua, this meant working with the Mayor’s Office of Contract Services, which supports the needs of more than 200 agencies with over 18,000 vendors. The challenge for NYC? The procurement professionals have 27 different procurement systems to navigate.
Levine demonstrated the challenge in striking fashion, by showing pictures of the process map for a competitive solicitation (subject to those 27 different systems). The effort can take 13 months of “pounds” of paperwork to process, so NYC and Ivalua embarked on a three-phased digital procurement project called PASSPort. In 2017, they rolled out PASSPort Phase 1, purposefully taking it one phase at a time to manage the change process, a necessary step when implementing technology solutions that have such an expansive reach.
Ivalua worked with New York City to streamline a procurement system encumbered by 27 different systems
But, as we learned from the case study, the consequence of moving slowly was the successful implementation of phase 1, which delivered a single new portal reflecting the characteristics of clear, simple, and efficient procurement. Working in phases to install a new technology solution allowed Ivalua and NYC to reduce that mammoth process map by 90%. The end result is now that everybody wins: suppliers save time, proposals are more quickly processed, and employee time is reduced.
That’s a solution worth replicating.
Case Study 2 – How SaaS-Based Software Models are Changing Government Procurement and GovTech Startups – Catherine Geanuracos, CEO, CityGrows
Catherine Geanuracos has a clear articulation of one problem she is trying to solve: government is drowning in legacy technology. Since government agencies first started implementing technology, it was primarily built in-house, completely customized, and for the most part, is still totally functional to this day. But, “totally functional” shouldn’t be an aspiration for civic technology, because these systems and programs haven’t kept up with current standards and best practices. Just because a legacy system works, doesn’t mean the agency’s employees (and contractors, in certain cases) should have to suffer through it. Don’t agree? Imagine yourself inside an early 90’s Honda Civic. Nostalgic, yes, but woefully short of today’s modern conveniences and safety features.
Governments are stuck using old technology that, while functional, doesn’t provide important features inherent to modern technologies that can improve safety and outcomes (Photo Credit: www.curbsideclassic.com)
Unfortunately, upgrading government technology isn’t as easy as upgrading your automobile. Even for a large institution with resources as plentiful as our government, they have a hard time maintaining good technology talent in house, meaning they haven’t been able to maintain their systems and adapt to their changing needs (not to mention that finding developers who can still work in some legacy programming languages like COBOL gets harder every year). This challenge has led to those complex RFPs with requirements that needed local hosting and configured software.
Now everything is changing, says Geanuracos. The core functions of government operations don’t require custom development or self-hosted technology. Agencies are beginning to realize, through initiatives like San Francisco’s Startup In Residence program, they can work with startups and leverage new technology and modern delivery models like software-as-a-service (SaaS). It may require working with in-house attorney’s or revising contracts, but at least there’s a path.
CityGrows uses modern software delivery models and tools to offer government organizations a unique “try before you buy” approach to service delivery
Geanuracos is trying to accelerate even this progress by encouraging agencies to consider systems and services that don’t require procurement, like GitHub or Google Forms. Leveraging these tools in the same manner as modern technology companies (in effect, using them as free growth hacks and productivity drivers) will create new possibilities for procurement, like revenue sharing, subscription, and pay-as-you-go. Over time, using SaaS models and free open source software will continue to free up resources eliminate redundant, rote tasks that interfere with the more exciting and impactful elements of government service that most public sector employees came to their jobs to do.
For Geanuracos, this meant eating her own dog food and creating a free tier for agencies to use as a starting point. This does have a business benefit: agencies can “try it before they buy it” and her company, CityGrows, has a chance to hook them on eminently functional technology tools away from the prying eyes of government bureaucracy. And that’s exactly their goal: to encourage government officials to use CityGrows to manage permitting, licensing, surveying, and almost anything else they can think of, for free.
CityGrows wants to help the public sector save time, reduce waste, and optimize paper-based systems
CityGrows is part of an emerging cadre of small startups that are both benefiting from, and leveraging to extend services on, low cost/high yield technology that other behemoths like Google and Amazon Web Services are offering for free or nominal costs. When Government can use options like shared services, online collaboration tools, and cloud-based platform solutions, they don’t need to spend as much time and money duplicating efforts, which had been a challenge of the past.
All this means expectations are changing for what is possible in modern day government technology, and CityGrows is happy to be on the vanguard.
Case Study 3 – Lowering Barriers for Emerging Tech Companies – GSA’s FASTLane and Startup Springboard – Keith Nakasone, Dep. Asst. Commissioner, IT Category, US General Services Administration
Keith Nakasone started his case study with a question: How can we get companies to do things a little bit faster, but without taking shortcuts? His role at the General Services Administration is all about helping vendors get onto the schedules program so that government buyers across the public sector have more selection and a better choice when it comes to IT products and services. Continuing the work initiated by Jose Arrieta to leverage blockchain technologies to make it easier to get on a schedule, Nakasone is continuing to accelerate process and procedure, putting more energy into their thinking and looking for innovative ways to introduce emerging technology solutions to GSA’s schedule buyers.
Keith Nakasone describes how his team is making it easier for small and emerging technology firms to win spots on GSA’s IT 70 Schedule
The Startup Springboard is a major component that addresses a particularly onerous requirement of GSA’s IT 70 Schedule, that companies have two years of experience working with government. The Startup Springboard enables GSA to consider other past experience, other financial resources, etc, because they recognize that technology moves fast, and emerging tech companies are capable of producing blockbuster “killer apps” in far less than two years. To enable agency buyers to access those technologies, the two year requirement needed circumventing.
Nakasone and team are continuing to explore distributed ledger technology to automate the process of getting onto schedule. Microservices are a major component. “What we do manually today, we automate tomorrow, and we look at all the data. We take all those disparate systems and reimagine what we can do on the front end, without being manual,” Nakasone described. It’s not unlike the TurboTax model; no authority or decision making responsibility is being taken away from their agency contracting professionals, but they are taking rote process layers away, which provides more time to consider harder questions and make better decisions.
In terms of process improvement, that’s a springboard that should provide considerable lift.
Case Study 4 – ProTech Innovation Across Government – Suzanne Audliss, SAP Ariba
Continuing along the theme of modernizing technology, our fourth case study of the event featured a clear call to action for public sector agencies from Suzanne Audliss of SAP Ariba: “If agencies are just transforming old systems, they’ll simply catch up to today. But they will never get ahead!”
Throughout her work helping clients innovate through procurement technology, Audliss has come to understand that teams must be aligned around the need for change. The best way to ensure alignment? Help that team understand why you are making the change, how it will impact them for the better, and what the organization is going to do to manage the change.
Suzanne Audliss and SAP helped the County of Santa Clara with a phased approach to modernizing their procurement system
It also helps when data is accessible. Audliss and SAP helped her client, the County of Santa Clara, manage and visualize data through online dashboards that can bring exposure and visibility to the entire team. Once teams feel included in the process and aware of what’s changing, its possible to begin the difficult task of creating a new end-to-end procurement process with integrated, modern technology. But even this is not enough to get everyone on board. SAP has successfully mitigated this “lack of adoption risk” using three techniques:
- Leverage best practices, which helps as an explanation for those who resist change because they want to know why things have to be done a certain way
- Using Ariba as a central contractor, which helps everyone on the team by more agile and move quickly
- Employing phased rollouts, which enable teams to count small but gratifying early wins that build momentum for more challenging phases in later stages
Those three techniques, combined with readiness and constantly assessing risks, meant that before Audliss went live with her client, everyone knew what they were getting and why they were getting it. That led to even more great wins after the change: 97% of the requisitions that the end-to-end system handled were able to be approved in a day.
The lesson? Modernizing technology is essential, and selecting the right procurement technology is crucial. But both of these techniques are only as effective as the change management effort that supports it.
Procurement Innovation Case Study 5 – Navigating the Procurement Maze, Erin Rothman, CEO of Storm Sensor
Erin Rothman and her company, Storm Sensor, are on a mission to transform the storm and wastewater industry. Maybe not the sexiest goal of all time, but if you’re a homeowner living in a community that deals with sewer overflowing, flash floods and wet basements, you can appreciate her cause. And as you can imagine, given the ubiquity of storm and wastewater infrastructure, Storm Sensor deals with municipalities all the time, to include the strict contracting processes in place at each locale.
Rothman recounts how navigating this procurement maze has been quite an education. Her ideal customers rely on procurement systems and processes that are designed for large, well-established utilities and infrastructure companies with extensive past performance and qualifications. These, ironically, are the exact things that a startup like Storm Sensor do not have, but desperately need, to advance their mission and their business.
So what did she do? A scientist by training, Rothman went about solving the problem in a methodical manner, doing anything they could to get closer to potential clients to better understand the problems they would have to navigate. “We worked with cities to better understand the process, the criteria, to test the boundaries and see how we can work with them easier and more efficiently.”
Erin Rothman, CEO and Founder of Storm Sensor, shares her approach to navigating the maze of public procurement
It was a classic stress test, finding the soft spots in a rigid system that simultaneously had a real desire to work with them. Because in government, Rothman says, you never have just one customer. Especially when you are trying to solve a wastewater control problem that impacts certain municipalities in a dramatic way, a problem called Combined Sewer Overflow (CSO).
US regulation requires cities that use a CSC to modify their systems and to change all the CSO using American cities will about $31 billion to solve the problem. That’s pretty mega. But in order to solve the problems in the most effective and efficient way, city leaders need to know what’s happening and why it’s happening. This is where Storm Sensor and their storm sensors come into play because they are able to better collect all that data. Erin shares an anecdote from one of their first big breaks: “We got an email from Jersey City asking for help, saying they needed our sensors. We helped them collect and present data internally, helping all of the stakeholders understand their problems.”
Jersey City sent the Storm Sensor team a map of the wastewater grid and 100s of pages of PDF data. Not exactly what they were hoping to receive, but Erin and her team dove into the task head-on, retabulating pages and pages of printed data into more useful formats to identify priority locations where overflow was discharging to lakes and rivers, which is a major problem. Then, they worked with the city’s innovation group who became a major champion for Storm Sensor, helping to create multiple points of collaboration with city officials.
The Storm Sensor team used data from non-digital sources to help Jersey City better understand it’s risk for Combined Sewer Overflow events
This proved crucial, because more than just one party was involved at the city level, and multi-party involvement is nearly synonymous with public procurement. There’s never just one problem to solve. “We needed clear short and long-term objectives. And real breakthroughs occurred – mostly from the collection of real data,” she told the audience. From these breakthroughs, Erin and her team at Storm Sensor were able to gain ground-level visibility into the challenges municipalities face when dealing with CSO. Now, as they scale their solutions and look to apply them in other cities with similar problems, they have some past performance and qualifications with which to support their work.
In conclusion, Rothman shared several key lessons for any startup looking to work their way into public agencies with complex procurement systems:
- Find someone in an agency with a pet project focused on your technology.
- Start small; many government agencies have budgets set aside for spending on smaller, unanticipated projects
- Be aware of the bid thresholds (for instance the micro purchase thresholds), and tailor your approaches to take advantage of those inherent flexibilities
- Understand the importance of internal collaboration on your client’s side. Be prepared to support your champions by any means necessary (even if it means hard keying pages of PDF data), and make it easy for them to help their colleagues and be successful
- Keep the agency goals in mind. At the end of the day, you (and not necessarily your ultimate solution, because it could be months or years before it is fully implemented) have to provide the value.
Those who attended our Technology Procurement Symposium were fortunate to hear these case studies presented live, to ask questions, and listen to the answers. If you want more information or context into these discussions, we invite you to watch all of the sessions which we recorded on Public Spend Forum’s YouTube channel. And, you can download all of the presentation material on our Technology Procurement Symposium page.
Got a technology procurement case study you think should be featured in our next symposium? Let us know by sending an email and we’ll put you on our roadmap!