How friendly was your city/county government to small business so far in 2019?
Cities look to innovative solutions to face of urgent issues like social cohesion and climate change. Mayors and city leaders have pledged to innovate and buy more from small business, but are they walking the walk?
To answer this, Citymart has tracked 2019 procurements in 200+ cities in the US, Canada, UK and Ireland to provide the first comparative view on how accessible and open cities are to small business and their ideas. This data covers procurements run by 310 government agencies in major cities plus major counties and additional selected cities.
In addition, we continued to apply our “Small Business Accessibility Score to 56 major US cities, evaluating accessibility to procurement through 93 procurement portals.
The Global Comparison
We know that start-ups and small business prefer procurements that offer flexibility on how to deliver a service or encourage new ideas. So we looked at every procurement published by cities and counties in these countries since January 1st 2019 to count procurement opportunities that matched our “innovative” criteria (read more below).
For the first time we compared the innovation procurement across for countries to establish a comparative view. Corrected for population size, Canada comes out ahead.
Cities & Counties in the US published 327 innovative procurements, followed by 57 in the UK, 47 in Canada and 4 in Ireland. It is worth noting that the UK is an outlier in that the majority of innovations are for social care outcomes, whereas elsewhere the majority of innovative RFPs are in transportation, tech or economic development.
Key Take Aways
Canada has the highest number of innovative municipal / county procurements per capita in the group
Boston leads globally as the city with the highest # of innovative procurements per capita at an annualized 4.1 per 100,000 inhabitants.
South Lakeland District Council leads among UK local authorities with an annnualized 3.8 per 100,000 inhabitants.
Vancouver leads among Canadian governments with an annualized 2.2 innovative procurements per 100,000 inhabitants.
Fingal County Council leads in Ireland with 0.7 innovative procurements per 100,000 inhabitants.
US Cities who innovate, do 2.5 more than their international peers, with an average of 8 innovative RFPs per year, where their Canadian and European counterparts averaged between 1-1.5 per city.
The Small Business Experience in 56 US Cities
Our approach to benchmarking public procurement is designed to represent the perspective of a small business or start-up. Over the past 10 years, we found that discovering opportunities is a crucial first step for business owners to even consider government as a customer. To capture how discovery varies across cities, we developed the “Small Business Accessibility Score” (SBAS) to measure how much effort is required in identifying and evaluating a cities’ opportunities.
We know that start-ups and small business prefer procurements that offer flexibility on how to deliver a service or encourage new ideas. So we looked at every procurement published by these 56 governments since December 1st 2018 to count procurement opportunities that matched our “innovative” criteria (read more below).
Key Take Aways
Boston scored highest on # Innovative Procurements total and per capita, coming from 9th place just 3 months ago to replace Long Beach as the leader nationally and internationally.
Pittsburgh scored highest on the Small Business Accessibility Score (SBAS), continuing to provide the best discovery and decision-making experience.
New York City and Boston share the top rank for innovative RFPs published, with Austin remaining on in the top two for the second consecutive quarter.
Atlanta delivered the biggest shake-up by reaching 2nd place on SBAS and 6th place on innovative procurements per capita, up from 27th and 14th place respectively, indicating that the appointment of David L Wilson II as Chief Procurement Officer by Mayor Keisha Lance Bottoms is paying dividends.
Only Lexington, KY and Clark County, NV did not issue innovative RFPs since the beginning of the year, a number that stood at eight in our first quarter reporting period.
40% of governments continue use platforms that try to generate revenue from business users in the form of upsells or mandatory fees to access public documentation. We strongly believe that such practices are not helping small businesses participate in procurement.
— The Ranking —
Put the Small Business User First
City leaders should focus efforts to make public procurement truly attractive to small business, beginning with accessibility and innovation. Both categories feed off one another since innovation outcomes thrive on increased competition of ideas, which in turn are facilitated through making it easy for new actors to take part. Further, we found that procurements open to innovation attract diverse small business.
We found no evidence that this requires fancy e-procurement systems - our top cities on both accessibility and innovation use a variety of in-house and contracted platforms. In fact, cities achieved both excellent and poor results with almost any procurement platform on the market - or their proprietary systems. Atlanta leaped from 27th to 2nd rank in less than 9 months by offering a direct link to its bids on the city home page and migrating to a more accessible platform. Cities scored highly on accessibility by paying attention to the user journey from easy discovery of business opportunities to their decision to take bid.
This study continues to validate some fundamentals already known to many urban innovators: Cities are still far from publishing enough procurements with real opportunities for start-ups and new ideas. But, the fact that the number of cities who did not publish innovative procurements dropped to just two should give us hope that a trend is emerging.
Take New York City as an example: In the period of this study, the city published 1010 solicitations in the City Record, of which we identified thirteen as innovative. That is a mere 1.3% of transactions. Boston, on the other hand delivered the same total number of innovative procurements, constituting about 6.7% of the city’s total procurements. It indicates a higher penetration of the city’s innovation agenda across its departments, but also a greater willingness to give vendors room to shape the scope.
What should your city do next?
Please get in touch with our friendly team to dig deeper into your results, and how to prioritize next steps. We have outlined two action areas below, to Improve Accessibility and Open Up to Innovation.
Is your city not listed here? Get in touch and we can include you in our coverage.
Action 1: Improve Accessibility
Increase participation of small business by making it easy to find your procurement opportunities. Check out atlantaga.gov for an excellent home page integration.
Remove any paywalls that force vendors to pay for access to opportunities or bid for RFPs, especially when you are not incurring costs by providing physical material!
Deploy procurement and listing platforms that require no registration, have no exclusionary practices and will not confuse vendors trying to upsell premium services.
Build a business case for marketing and communications of procurement opportunities to attract innovative and diverse businesses to consider business with your city.
Action 2: Open up to Innovation
Set goals for the number of procurement transactions in 2019-20 and 2029 that we would classify as open to innovation or small business, if you want your city to be innovative and open to start-ups
Create a business case for innovation in your procurement efforts and prioritize the actions that are going to get you the desired outcomes. We recently built a strong case for a 0.5% investment in procurement resources of a major urban regeneration project to drive more than 10% in cost savings, elevated quality outcomes and improved vendor diversity and civic engagement.
Build a culture and shared understanding around innovation not just as the risky pursuit of new technologies, but an opening to new or different ways of doing things that can help small business flourish in your city. Read here what startups want you to do!
Develop a holistic procurement strategy laying out your path to going from back-office function to driving change, participation and accountability through this critical government function.
The Small Print: More on how & what we measured
A first step to tracking what is innovative.
Data on US local procurement is deeply fragmented, held in dozens of platforms and aggregated poorly by commercial operators charging businesses hundreds to thousands of dollars to find opportunities. Like any small business, we wanted to rely on information that is publicly available. We tracked only those procurements above the city’s competitive threshold - i.e. those opportunities that are published.
What is innovation? It is important to note that we used our own judgement to identify a procurement as innovative. We looked for procurements that either explicitly referred to their interest in innovation, or provided an implicit opportunity to do things differently. For example, Los Angeles Airports RFP for guest satisfaction surveys is in, because it is open to new ways of collecting the data. If it had provided a fixed specification to repeat the same methods and tools used before, we would have not included it. Every judgement is prone to error, and more likely than not we have missed some good things. But, we believe that this approach is more aligned with the reality of many start-ups and innovators, who may work between traditional commodity codes or have their own smart ways of getting things done efficiently.
Since March 2019 we added an additional dimension: The number of days a procurement is open for submissions, after feedback from small businesses that they struggle with short opening times (read more here). We have heard their concerns and will now expect procurements to be open for at least 28 days to be considered or provide strong justification otherwise.
About the Small Business Accessibility Score
Citymart developed a scoring method that builds on the discovery journey of a small business that has not yet worked with government. It starts with the question of how easy it would be to discover procurement opportunities in your city, and the effort required to obtain sufficient information and the actual opportunity documentation - all needed to determine Go / No-Go. We measured seven features of the journey we know to be important. Our overall score is subject to a weighting of these individual measures to reflect their relative importance to a small business.
Elements of the Small Business Accessibility Score (SBAS)
# of procurement sites in city
Opportunities should be in one place. Some cities, like Austin (TX) list all opportunities in a single location, whilst others (like Jacksonville) have more than 5 pages on which opportunities are posted.
# of steps to access RFP document
Opportunities should be quick to assess. In Memphis you get to the RFP document with just 4 clicks from the city homepage, whilst New York City provides no identifiable path from nyc.gov to its solicitations page.
Sort / filter functionality
Opportunities should be easy to find. Pittsburgh lets you search and filter opportunities using keywords, dates and other criteria. In Tulsa no such feature exists.
Completeness of listing information
Quick decisions happen when the right information is available. San Jose provides users a complete overview of information about the opportunity like dates, contacts, plan holders. Milwaukee’s department of public works gives you barely more than a title, before your left to figure things out by reading a 50+ page RFP document.
Level of registration required to view RFP
Procurement opportunities should be open information and easy to access. Cities like Indianapolis let you have it all, whilst Lexington requires a W-9 and San Mateo County leaves it at the portal operator’s discretion (publicpurchase.com) to let you see RFPs (Citymart was denied access).
Most cities don’t charge you for RFPs. But almost a third of governments we reviewed use portals that aggressively upsell services or have mandatory charges, like Jacksonville’s public schools.
San Francisco’s Office of Contract Administration offers RSS feeds of their procurements. Others offer opt-ins for email or SMS notification. But 60% of cities, like Houston offer no notifications at all.
Many cities, regrettably, publish procurement opportunities on different websites. To assemble the score we assessed each procurement site in the city. The City’s SBAS is calculated as an average of these individual scores (contact us for your sub-scores).
Example: The Denver Score
2.4 Denver Public Schools
2.4 Denver City Procurement
2.0 Denver Airport Procurement
1.8 Denver Transport Procurement
1.9 Denver Water Procurement
2.1 Total Denver Score (AVG sub-scores)