We measured how friendly your city government is to small business.
Cities look to innovative solutions to face of urgent issues like social cohesion and climate change. Mayors around the country have pledged to innovate and buy more from small business, but are they walking the walk?
To answer this, Citymart has gathered data on 56 cities to provide the first comparative view on how accessible and open cities are to small business and their ideas. In all, we evaluated 70 government agencies in cities >500k population plus a few major counties and additional selected cities.
The Small Business Experience in 56 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
Pittsburgh scored highest on the Small Business Accessibility Score (SBAS), providing the best discovery and decision-making experience
Long Beach scored highest on # Innovative Procurements per capita, creating opportunities for innovation in about 15% of city procurements
Austin and Los Angeles published the highest total number of Innovative Procurements in the 3 month study period
Memphis and Sacramento are the only governments that achieve good outcomes on both Small Business Accessibility and Innovation per capita
15% of governments did not issue an innovative RFP in the 3 month study period
40% of governments 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 Bottom 5 —
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. San Antonio ranks second using not much more than blog technology to make their opportunities easily discoverable. 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 validates 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.
Take New York City as an example: In the period of this study, the city published 433 solicitations in the City Record, of which we identified eight as innovative. That is a mere 2% of transactions. Long Beach, on the other hand delivered the same total number of innovative procurements, constituting about 15% 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. It appears that the sustained effort to innovate and support small business and start-ups under Mayor Garcia is paying off.
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
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 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
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
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.
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)