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For Public-Sector IT, RFP Process Makes Procurement a Pain Point

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Public agencies have been working to improve how they find and purchase technology for decades, and yet one of government’s most sensitive pain points remains, in the words of San Francisco Chief Innovation Officer Jay Nath, “procurement, procurement, procurement.”

Much public-sector technology today is unrecognizable from that of the mid-1990s, when streamlining IT procurement could mean quickening the purchase of a half-dozen PCs from six months to two weeks. But while the pace of technology innovation has grown exponentially since then, timelines for procurement haven’t kept up.

In an IT public procurement practice standard released earlier this year, authors at NIGP: The Institute for Public Procurement said the typical RFP process remains too traditional to be effective at purchasing technology hardware, software and services.

“The RFP process, as it has evolved, does not always allow enough creativity and flexibility for the effective procurement of IT,” NIGP wrote. “Rigid terms and conditions directed toward the purchase of traditional products inhibit IT procurement, now more of a service than a product.”

The organization pointed out that the National Association of State Chief Information Officers (NASCIO) and the National Association of State Procurement Officials (NASPO) have called for changes to process and policy “to better integrate the flexibility and agility necessary to align with the rate of innovation and the services aspect of IT.”

Brent Maas, NIGP executive director of business strategy and relationships, told Government Technology that public agencies are historically reluctant to go first with untried technologies and ways to purchase them.

“No one wants to be the guinea pig, but I think that has to change, and potentially from a generational perspective it will change because anything technology-based is driving day-to-day life,” Maas said.

Observers of state and local purchasing nationwide agree IT procurement has yet to be modernized in many agencies. The specialized task of buying IT still often falls to busy mid-level staffers; and asymmetrical, or out-of-phase projects, potentially run afoul of budget and election cycles.

Resolving governance and financing questions remains an issue for many agencies. But some have managed to move past more basic questions to focus on redefining IT procurement by uniting like agencies in a single request, prequalifying bidders or carefully scrutinizing contracts for signs of age or ineffectiveness.

These agencies, in turn, may face more exciting challenges that lie closer to the heart of IT procurement, said Rick Howard, research vice president for Gartner. Chief among them, he said, is the issue of scalability — ensuring solutions have sufficiently broad application to find wide usage.

“Modular contracting, blanket agreements, pre-qualified vendor lists — they’re all vehicles that help you achieve the end, and it really is situational,” Howard said, referring to working solutions.

Scaling new creations into production-level apps remains uncommon, he said, but should be a focus for agencies that have not achieved it — noting that in some cases, deconstructing monolithic solutions into their components can reveal common applications.

“You abstract out that business function as a service that has to interoperate with, say, the core true differentiated functions of any one of these large systems, that’s where you’re trying to go,” Howard added.

A similar issue, standardization, is key for San Francisco, Nath said, “so that we are really being more equitable and allowing for smaller businesses to participate in the process.”

A long-term goal for his agency, standardization could enhance scalability of procurement processes “so that a contract in San Francisco is essentially the same for Austin and for others across the U.S.”

Spreading government investment to ensure that local and smaller and medium-sized tech businesses are included, as well as focusing on innovation, is key, said Nath, chief innovation officer of the consolidated city-county — noting that failing to do so means agencies can lose funding as well as forward-looking ideas.

“How do we create better solutions for government, for our partners, our nonprofits and for society? When you think about how quickly technology evolves, the desire for local governments to really create a growing ecosystem of entrepreneurs or startups — I think there’s a big opportunity,” Nath said.

With those goals in mind, last year the city-county created an “RFP bus” — a stripped-down, accelerated batching of RFPs that replaces highly prescriptive rules with simpler challenge statements written by participating municipal and county agencies that focus on needs.

The idea grew out of San Francisco’s Startup in Residence (STiR) program, one of the most recent change movements in IT procurement, that embeds young tech companies within government to deepen their understanding of government’s problems, resulting in more effective public-sector-facing products. The idea, which has expanded in recent years, helped create products like a navigation system for the visually impaired at San Francisco International Airport — but proved deeply frustrating when RFPs took more than two-and-a-half years.

“By having the RFP bus … you have a schedule of when it’s starting and stopping,” Nath said, “and having that certainty that it’ll be complete by this time creates a lot of confidence and predictability, and allows for better coordination.”