Here at Rubicon, we recently announced our smart city partnership with HGACBuy, a government procurement service striving to make the governmental procurement process more efficient.
Government purchasing can be cumbersome and time-consuming. Procurement consortiums streamline this process, reclaiming hundreds of hours back for city employees who could otherwise be working on issues that speak more closely to their key skills. The more efficient service that procurement consortiums provide leads ultimately to better outcomes for city residents.
What is Government Procurement?
Every time a government agency needs to buy anything, be it office supplies, a fleet of vehicles, or smart cities technology, federal and state procurement laws require them to go about their purchase in a certain way. This process is called government procurement: the act of a government agency buying (procuring) something from a vendor.
These laws are a good thing. They require taxpayer money to be used both appropriately and efficiently. They promote competition. They reduce waste and minimize fraud. In short, they help to ensure that cities and other government agencies are doing right by our money.
One of the common requirements in government purchasing is soliciting competitive bids. What this means in practice is, when a city or other government agency wants to make a purchase using taxpayer money, they usually issue a Request for Proposal (RFP), which is a document outlining what it is the agency would like to purchase, and the requirements for potential vendors—a government procurement contract.
Sometimes a Request for Information (RFI) or Request for Quotation (RFQ) will be issued before the RFP. These are requests from the agency doing the procuring to learn more about the capabilities of certain suppliers, or to invite suppliers to give quotes and discuss payment terms, respectively. More often than not, an RFI or RFQ will be followed by an RFP.
The RFP response period typically lasts 30 days, during which multiple companies provide proposals for a given contract. At the end of this period, the city usually uses a scoring mechanism to rank each bid based on any number of factors. While price is always an important component of the overall score, others components, including whether the company is located in the United States, is veteran- or MWBE (Minority and Women Business Enterprises)-owned, or has strong ESG scores may come into play as well. Other times, the city will send out a bid contract in which the lowest bid wins the contract and enters into an agreement with the city, regardless of any other non-monetary factors.
These rules vary by jurisdiction. Different cities, states, and countries have their own rules, though they’re all generally similar.
The Pain Points of Government Procurement Contracts
While this formal structure provides many benefits, there are numerous pain points that can unintentionally slow the rate of civic innovation and sustainability adoption.
If you speak with any city office that has ever had to issue an RFP, they will tell you that the length of time government procurement contracts can take—from writing the RFP, to issuing it, to going through the process of scoring proposals, to actually hiring a company for the job—is by far the biggest pain point for a city.
A typical RFP process can take 10-12 months (even though the RFP response time is usually a mere 30 days), which is less than ideal if you’re a mayor or other city official trying to get something implemented before the next election cycle.
Cities have limited resources. They’re always working with a tight budget and under intense scrutiny, which means that city leaders need to make sure that anything their employees are working on is the absolute best use of government time and taxpayer dollars.
An RFP document can typically run over 200 pages, which can take a significant number of taxpayer-funded hours to write, have legal and procurement departments review, and circulate.
Lost in Translation
In many cities, multiple city agencies are involved in the drafting of the RFP. Front-line departments may provide specific requirements, the Technology Department may have input, and the Procurement Department may collect everything and produce the final document. As a result, sometimes nuances of the problem that needs to be solved can be lost in translation by the time the final RFP hits the streets. This issue is especially pronounced when it comes to new technologies, such as smart city technology.
Cities that follow a traditional RFP process for smart city technology may end up with a disconnect between what the city may expect from a RFP and what they receive in return. When you ask people to describe software and complicated technologies in the form of an RFP, intricacies are inevitably lost.
What is a Procurement Consortium?
Here comes the fun part. Procurement consortiums solve much of the pain points of a city issuing its own RFP by issuing RFPs on behalf of a large number of cities. Thanks to cooperative purchasing statutes that exist in most state laws, cities are legally allowed to purchase off of contracts that were competitively bid upon by a different public agency. This process allows cities and other public agencies to substantially reduce the procurement timeline, gain back thousands of taxpayer-funded worker hours, and not have to worry about a lack of time or expertise on the part of their staff.
As an example, while we still answer relevant RFPs from municipalities looking to procure smart cities solutions, RUBICONSmartCity™ is now available for immediate purchase by cities on the HGACBuy procurement consortium.
Procurement consortiums are a form of cooperative purchasing that makes the process of government procurement significantly more efficient for all involved. They make it easier for cities and government agencies to find vendors, as they are essentially a catalog of vetted options for cities to immediately procure. There are a variety of new organizations coming up in this space, including Marketplace.city, which is a great example of a new approach to procurement that grew out of New York City’s attempts to procure smart city solutions.
I hope this look at the pain points of government procurement contracts, and the ways in which these can be alleviated, has been helpful. If you have any questions, or you would like to explore the possibility of deploying RUBICONSmartCity in your city, you can reach out to me any time at email@example.com.
Conor Riffle is Director of Smart Cities at Rubicon. To stay ahead of Rubicon’s announcements of new partnerships and collaborations around the world, be sure to follow us on LinkedIn, Facebook, and Twitter, or contact us today.