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What Open and Fair Government Procurement Could Achieve

Bureaucratic, compliance-driven contracting systems do little to create sustainable and equitable communities. Done better, procurement could be a creative tool for problem-solving.

New York City's PASSPort procurement portal
New York City’s PASSPort procurement portal aims to streamline access to nearly all of the city’s contracting information in one freely accessible location.
COVID-19 has put cities and states to the test, and many have struggled. We saw government agencies at all levels compete with one another for lifesaving emergency supplies. In most cases, public procurement processes were not set up to meet the needs of those they were supposed to serve: residents.

Local and state contracting in the United States amounts to trillions of dollars each year. But we can’t build much of anything back, let alone better or quickly, on the outdated foundation of slow, bureaucratic, compliance-driven procurement and contracting systems that fail to include citizens, businesses and community members in planning and monitoring how public money is spent. According to an analysis by Citymart, only 0.5 percent of municipal procurement transactions in the United States could be classified as innovative and open to new ideas or different ways of doing things. We need to make public spending more transparent, effective and fair to help create sustainable and equitable societies.

Through our work around the globe and in the U.S., we know how better procurement delivers better results. Here are four of our strategies:

• Make procurement a strategic function of city and state governments by empowering it with a bold vision, a significant budget, and a smart and diverse team. The city of Des Moines, Iowa, a member of our organization’s Lift impact accelerator program, is rethinking how procurement can help achieve one of its key city goals — to be more sustainable — by changing policy and processes; the city also expanded its procurement team. El Paso, Texas, which is also involved in Lift, has established memoranda of agreements with six community partners to help with local business engagement and technical assistance.

• Set social value goals for public procurement and report on your progress toward achieving these goals. The ways governments buy goods and services have tremendous power to shape markets and include traditionally underserved communities, especially at the local level. Although some governments do aim to use procurement to achieve social outcomes, such as improving gender and racial equity or boosting sustainability, they often lack clear and measurable objectives.

In Philadelphia, by contrast, the city and the Center for Good Food Purchasing are setting goals around better local food purchasing. The city of Austin, Texas, estimates that doing procurement differently could result in over 40 percent of the city’s contract spending going to historically disadvantaged or excluded businesses, versus less than 10 percent currently.

• Enhance online procurement systems so that they are vendor-friendly and run on machine-readable open data. Businesses often complain about barriers of entry to working with government, including lack of easy access to systems. In Riverside County, Calif., for example, it takes 10 clicks across three websites to get to a bid opportunity. In some localities, you not only have to pay to get to RFPs but also must first go through a burdensome registration and certification process. New York City introduced its PASSPort procurement portal as a way to streamline access to nearly all of its contracting information in one freely accessible location.

Building on open contracting data and open source technology can help develop state-of-the-art business intelligence tools and red-flag monitoring systems, including those developed for our Open Contracting Data Standard. Civic technology firms can step in to develop tools, opening up space for innovation and reducing vendor lock-in.

If tackling a data project feels like too much with too little staff, start small and build toward a more full data set; any information helps. A few places to start are publishing upcoming contracting opportunities on your website or social media, much like the forecasting information provided by El Paso and New York City or Boston’s buying plan, or simply listing when current contract terms end. The El Paso Hispanic Chamber of Commerce, an official city partner, also offers creative events for local businesses to learn about contracting opportunities, such as its weekly “sip and search.”

• Implement clear oversight and monitoring for procurement systems and spending to make open competition the norm and ensure that regulations are enforced. These mandates should be designed with and by key stakeholders, including purchasers, oversight agencies, community organizations and small businesses. The Boston City Council, for example, continues to push for change after a report released in February showed how few city contracts are awarded to women and people of color.

Procurement can be so much more than just a clerical or compliance-driven function; it can be a creative — and exciting — tool for problem-solving. When we allow ourselves to reimagine government contracting as a mission-driven public service, we create the potential for a powerful outcome: more equitable, sustainable, resilient and democratic societies.

Kathrin Frauscher is deputy director and one of the founders of the Open Contracting Partnership, which advocates for more open, fair and effective public procurement.

Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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