Procurement is a Thing

Procurement folks have found the state can do things much faster than it was. It’s working harder and faster, but not necessarily smarter yet.

Dan Hon, former Content Director, Code for America

When Giancarlo Gonzalez, former chief information officer of Puerto Rico, started to put together a tech summit, he remembers, “Someone told me, ‘The most important people you need to bring in are the procurement experts. We need to talk about how we're changing the way we contract.’” Gonzalez took this advice still champions today the impact of having experts in procurement talking about modular contracting.

When Peter Kelly worked as a consultant for the California Administrative Office of the Court, he saw what happens when procurement goes wrong when the court procured a statewide custom-built management solution to replace fractured and varied systems around the state:

“I watched it go horribly awry from the inside for a myriad of reasons. It was a contract that didn't actually incentivize the right behaviors. It was a development staff that was built for the wrong reasons and therefore couldn't deliver. It was requirements that had been built years in advance that didn't adjust and adapt. It was government bureaucracy that got in the way of good outcomes. It was so incredibly enlightening and it really, really frustrated me.”

Gonzalez and Kelly are not alone. It took a single synthesis session from our first set of interviews to realize every single person we interviewed volunteered the same topic over and over: Procurement is broken. Badly. And it has (and exercises) the power to limit real change. Sooner or later, it seems, everyone realizes the importance of procurement. Despite the bland phrase, government procurement has become a hot topic of deep discussion—and often the root of the worst war stories—among practitioners.

The potential for problem-solvers to have impact is far too often only as good as the procurement systems of the agency in which they work. Procurement is often the root of why we fail users. It’s also often the root of why government fails public interest technologists. Many of the technical challenges specialists work on come from procurements of technologies that were out of date, scope, or line to meet the problem they were trying to solve.

Technologists in the private sector have to ensure that their products are simple, effective, and intuitive, or else users will turn to a competitor. But when it comes to government, users don't have a choice. For example, the Department of Homeland Security’s goal is to prevent terrorism. They don’t care if you had a good experience when you went through TSA.

The idea that government is in the service design business is a radical rethinking of everything that has come before. You can't go somewhere else to pay your taxes or ask for the pothole on your street to be repaired. Without competitive pressure to deliver better technology, the goal for most federal, state, and local entities is simply to get the thing launched by a certain date. No one gets extra points for making it exceed expectations. This means when government purchases technology, how well it functions for the end user—a key tenet of the technology industry today—isn’t part of the decision-making process. Instead, it buys only technology that serves the goals of the agency.

“The most important people you need to bring in are the procurement experts. We need to talk about how we're changing the way we contract.”

Over and over we heard how the compliance-only framework challenged procurement offices working with problem solvers to deliver better services. Hanna Azemati, Assistant Director with the Government Performance Lab at the Harvard Kennedy School, said:

“Many cities are stuck in this kind of cycle where they're pushing money out the door without paying attention to what it gets them. They're very focused on activities, they're very focused on compliance, they're very prescriptive.”

Laura Melle, who has become a procurement champion within the City of Boston, agrees, and points to the importance of empowering those who do the hard, detail-oriented, critical work of writing and analyzing RFPs.

“Seeing senior leadership really value their operations teams and their administration and finance people is really exciting because I think for a long time, procurement staff have been told that their job is compliance. Their job is to keep you out of jail, you know, their job is to make sure that all the paperwork was filled out correctly and that nobody broke any rules, rather than being told that their job is to help deliver amazing services to the people in the city of Boston, or wherever it may be, and to help make sure that our project is successful.”

Government systems aren't built this way because of lack of funds, or laziness, or broken promises, or stupidity. Nor do people working within procurement deliberately set out to purchase systems that do not value the end user’s experience. Many within government care deeply about the state of its technology and the procurement of it. But to improve it, they have to overcome massive, systemic hurdles. We found that those working in procurement who want improve government have created multiple paths to change the process.

The public sector buys software and systems the same way it orders battleships. An agency can spend years gathering requirements. This creates RFPs and contracts that are so large that they which it gives the contract to one of a handful of companies with the resources to handle such a massive order. Because of their enormous scope, these projects often take years to complete. By the time they launch, the technology is old.

For example, U.S. Citizenship and Immigration Services spent three years gathering requirements for a system that would digitize immigration forms;¹ the system was outdated before anyone even began building it. After more than 10 years and a cost of more than $1 billion, only three forms have been digitized, the system crawls and often stops working, and many of the civil servants who rely on it say they wish they could go back to paper processing.²

The Department of Homeland Security’s goal is to prevent terrorism. They don’t care if you had a good experience when you went through TSA.

Across federal, state, and local government, innovators are working to change standard procurement practices. At the federal level, 18F has taken a lead partnering with both federal agencies and local agencies to break down procurement into modular parts. Code for America, one of the foremost government-adjacent groups, frequently leads procurement charges at the state level. This increases government’s ability to be nimble, increase diversity of solutions, and flag failure early. As City of Austin Head of Design and Technology Policy Austin Ben Guhin notes, “[when you] introduce modularity, if one piece of it is failing, you can just replace that piece.” This is a far cry from buying a billion dollar system over ten years that won’t be built for another 10. It also helps government start to tackle the impact that the technology industry has had, accelerating the pace at which better solutions emerge.

Many companies responsible for failed government systems continue to get government contracts. Because it is so hard to meet the requirements to become a government contractor, few companies qualify, and the usual suspects continue to get new work. Oracle was largely responsible for the humiliating launch of healthcare.gov in 2013,³ yet afterward it still received millions of dollars a year in federal contracts.⁴

Some cities, like St. Paul, Minnesota, have focused on improving their communications with local vendors and increasing the diversity of those who apply. Like compliance, the fear of accusations of advantage given to one vendor or another often paralyzes procurement vendors. So support from external, neutral organizations has become a critical way for local and state governments to reach new vendors.

In St. Paul, the Department of Public Works worked with Harvard Kennedy School Government Performance Lab to conduct interviews with vendors and share candid feedback. Jessica Brokaw, the city’s Deputy Director of Procurement, said:

“It was invaluable. It gave vendors a level of comfort to state what was on their mind, and we learned there was a perception that we had preferred vendors. We had to change what that perception was.”

They took a number of steps, including launching procurement vendor fairs and changing how they listed contracts to show where women- and minority-owned companies could apply. The next time St. Paul put road repair contracts out to bid, six different vendors won the seven contracts, instead of the same two vendors winning everything.

Many companies responsible for failed government systems continue to get government contracts.

Sometimes help comes from the vendors themselves. Green River is a software design and development firm that has worked extensively with local governments. When the City of Boston put out an RFP for data systems to track homelessness and coordinate access to social services, Green River tried to apply, but the system rejected the application because it hadn’t fully uploaded by the deadline.

Green River CEO Michael Knapp called every person he could find in the government, because he was determined that bureaucracy would not take away the opportunity to make an impact on the homeless problem:

“Eventually we were selected to build that project, and our work with governments on homelessness has since spread across the country—to other cities in Massachusetts, to Virginia, St. Louis, and San Diego. If I had walked away, that would never have happened.”

Decades of budget cuts have reduced the number of government employees across the country, so when an agency needs a large technology project, it has neither the resources nor the expertise to do it in-house. Government also lacks workers with technical expertise who sit at the intersection of what agencies need and what they buy. As a result, officials who don't know better can spend absurd sums of money on ludicrous technology. And contractors—who do know better—line up to take advantage: In 2016, the Transportation Security Administration spent $47,000 on an app whose sole purpose was to generate an arrow to point airport travelers left or right in a security line.⁵ One innovation team member reported:

“A critical success factor is having a person on the inside to ask the right questions. I remember one meeting where the vendor told us straight-faced that to scale would be an additional cost per instance, times the millions of people who would touch the system. It was total BS. I knew it didn’t cost them any more. And I knew they shouldn’t be charging us more. But they didn’t know I knew. And my colleagues who know everything about procurement didn’t know the technical specs to challenge them.”

Sometimes, innovation in the procurement space happens not from partnerships inside government, but adjacent to it. In Charlotte, Code for Charlotte’s Jill Bjers frames partnerships with government as ways to boost the great work it is already doing.

“We wanted right from the beginning [to] be an unbiased tech savvy partner to the city where we could sit in our meetings. We could help them decipher tech languages. Help them do some community outreach before they go buy something and make sure that it's really something that they should be buying and then make sure they're getting the best price for what they're spending on it.”

In some places, government goes straight to the ultimate expert on resident experience: residents themselves. In St. Louis, when Treasurer Tishaura Jones was upgrading the city’s parking meter inventory, instead of having her staff do a review and pick one vendor, they picked four, and then had the vendors put their equipment on St. Louis streets for a six month pilot. They then assembled a citizen advisory council to do the evaluation. Jones said:

“They would go around and score each vendor on usability and whether they liked them or not. Then we also put out a public survey to get input from people who weren't on the committee who wanted to weigh in on which equipment they liked the best. Then we took that public input piece as 20 percent of our decision making process on which vendor we chose.”

This kind of citizen participation in procurement mirrors work many cities have done to develop participatory city budgeting. This kind of targeted, iterative innovation, alongside new pairings with complementary subject matter expertise, reflect a few examples of the kinds of small, critical steps governments are taking take toward procuring solutions that put users first and supporting civil servants who keep the country running.