Purchasing in government is frequently cited as an example of a process rife with bureaucratic inefficiencies. While most in the public sector aim to be good stewards of the tax dollars for which they are responsible, they have limited information available to them when making spending decisions. But a new technology -- one that aggregates government purchasing information and offers insights that can help agencies make better spending decisions -- could change all that.
As a captain in the Aventura, Fla., Police Department's administrative division, Capt. Tom Labombarda told Government Technology that in addition to overseeing several units -- including the communications fleet, quartermaster, records, personnel, training and special projects -- he also has the complex task of managing most purchasing conducted by the department, composed of 86 sworn police officers.
As with most public-sector agencies, the police department obtains at least three bids on needed services or materials from qualified vendors. Larger purchases require the city to issue an RFP and wait for responses. While the lowest price is often the determining factor when making a decision, it’s not the only factor, Labombarda explained.
Sharon L’Herrou, administrative officer of the Delray Beach, Fla. Police Department, describes a similarly cumbersome process, complicated by a conservative purchasing policy that requires going out to bid for every purchase that exceeds $15,000.
“When it goes out to bid, that’s a very, very staff-intensive, time-intensive process,” L’Herrou said. Much of the responsibility for routine purchases lies with the employee who needs the item, who must research the product or service and vendor options.
The challenge for Labombarda, L’Herrou and so many others is that it’s difficult and time-consuming to gather additional information on which to base purchasing decisions. How do they know if the prices they are being quoted are the most competitive available? How do they get an objective assessment of the quality of the vendor offering a particular item? Vendors typically provide hand-selected references, but only those they know will speak highly of the company – is this truly an objective analysis?
L’Herrou points out that staff members oftentimes do have other resources to draw from, like contacts with other agencies, but the information they can gather is limited and doesn’t offer the full picture of the activity around a particular item in the marketplace.
Big Data Enables Smarter Purchasing
A new online information service called SmartProcure (screenshot below) is analyzing and normalizing thousands of sources of government purchasing data, and offering it back to agencies in an effort to make sure they benefit from their collective purchasing power.
“Government agencies together … local, state and federal, represent the largest purchaser in the world combined," said CEO Jeff Rubenstein. "Yet because it’s so fragmented, they rarely get economies of scale."
As of February, the company has access to purchasing data from 1,500 government agencies, including cities, counties, school districts, state and federal agencies, state attorneys, public defenders, medical examiners, public hospitals, state colleges and universities. Once it establishes a relationship with an agency, it sets up a method to get that agency's purchasing data on a regular basis -- and that agency qualifies for free access to the database. SmartProcure’s patented technology evaluates the data in the format it is provided and integrates it into its database.
Government agencies get a log-in, and can access the system at any time to gather information on recent purchases made by their peers. They can quickly locate which vendor is offering the best price, and exactly which agencies have made the purchases. Agencies use the system to analyze their spending too, as they are able to quickly isolate how much they spent in a specific timeframe with a particular vendor. Multiple search parameters can be saved to ease future searches.
Beyond saving money and allowing agencies access to a broad range of potential vendors, Rubenstein argues that the service helps officials do their jobs, and therefore serve the public, more effectively.
“It does what you would you like to do if you had hours for every type of procurement you're going to do -- to go through and properly vet a vendor, find out what all the cities and counties within 100 miles are buying,” he said.
Purchasing Efficiencies Gained
While Labombarda and L’Herrou are relatively new users of SmartProcure, both have discovered information on past purchases using the system that they wished they’d had before. In Aventura, Labombarda discovered that the department recently paid too much for an interactive whiteboard. While the discovery was disheartening, he takes comfort in the fact that using the system will prevent that scenario from recurring.
In Delray Beach, L’Herrou made a similar discovery. She presented the vendor with the discrepancies, and through persistence, was able to get the difference between what her city paid and another municipality paid credited back to Delray Beach.
Aventura PD is currently working on an upgrade to its automatic vehicle locator systems. Using SmartProcure, they have identified three other agencies with contracts for the same technology. Through the piggy-backing process, employed frequently in government purchasing, agencies can use an existing vendor contract that has been competitively bid by another government agency. This will be the first large purchase Aventura is using the system for – the units run about $90,000 each.
“This all happened in days, where typically we would take weeks, maybe even months, if we had to draw up an RFP, put it out, wait for responses, and go through that whole process,” Labombarda said. “Right off the bat on this … it's going to save us a tremendous amount of time and probably money.”
L’Herrou expects that SmartProcure will also help expedite the piggy-backing process, and the purchasing process in general, for Delray Beach. “It should make the process of researching prices quicker; it should expedite that process if we need to find something to piggy-back off of; and obviously, last but not least, it should help us ensure we’re always getting the best price,” she said.