Learn how Citymart has helped cities around the world procure better.
At over $4.5 trillion, municipal public procurement in cities is one of the most exciting and impactful governmental processes. In our view, each public procurement is an opportunity. An opportunity to innovate. An opportunity to change things for the better.
At Citymart, we have worked with more than 100 global cities over the past 10 years to deliver procurements for better outcomes. Along the way, we did a lot of research and gained valuable first-hand insights. What struck me in particular are three great difference in outcomes of our municipal procurement efforts:
- We have consistently found cost variances for comparable solutions of 3,000% and more between cities less than 1,000 miles apart.
- We have found differences in ‘time-to-citizen’, i.e. the time to deploy a solution and making its effect felt of 5-7 years on even comparatively light-weight technical solutions like mobile parking services.
- We have found solutions that are utterly ineffective in meeting the need, routinely adopted by cities across all categories like transport, social care, education and economic development.
When we started out, many experts told us that this is a feature of the system, that these variations couldn't be changed. Good procurement is a dark art, delivered by professionals with exceptional talents.
Well, we learned that procurement is not a dark art and that, despite the complexity of each transaction, we could identify four common practices in procurement that consistently led to better results in cost, time and effectiveness:
- Cities attained better results when they systematically document the needs they intended to solve through specific procurement actions. Working with success metrics in particular helped identify and communicate objectives better.
- Cities attained better results when validating their project designs by learning from peers in other cities with relevant experiences. It turns out that first-hand insights lead to more robust designs and build confidence in trying something new.
- Cities attained better results by increasing competition for contracts when they diversified the vendor base to include SMEs, start-ups, social enterprises, and the 99% of businesses who may not yet work with government. It turns out that more diversity drives quality, cost, innovation and reduces the risk of failure. (Read more on the ROI of more competition)
- Cities attained better results by allowing the market to educate them about different approaches as part of the process. On average, cities had prior knowledge of just 3% of available products and services before engaging the market. Such learning can happen through smart RFIs or problem-based procurements. A key to success is a proactive and comprehensive engagement to maximize participation.
City leaders appear to have a lot to gain by promoting these relatively simple practices. They don't require regulatory changes, they don't require super-humans. At Citymart, we have built the tools and collected the data to simplify and accelerate these practices.
The above was excerpted from my paper "The De-globalized City" which appeared in the April 2018 edition of New Global Studies.