Bertolini said the biggest obstacle they’ve encountered so far is software licensing. The county regularly purchases enterprise licenses, but many of these licenses don’t permit sharing outside the enterprise. The county, however, has successfully renegotiated some of the license agreements.
“We try to make sure the vendor understands what we’re doing, and I think most of them are now starting to figure it out,” Bertolini said. “With the advent of cloud computing, they really have no choice but to create a shared services cloud consumption model.”
The next step for Oakland County is to further involve the private sector through the launch of the new G2G Marketplace. The marketplace will let government agencies quickly procure technologies from a number of companies that have already been vetted and whose products or services have already been competitively bid.
“We are doing the due diligence to make sure each of the companies is the right fit,” said Bertolini. “We are hoping this will lower the costs of the technologies and provide well vetted solutions for other government agencies to use.”
Bertolini believes shared services solutions like G2G Cloud Solutions and G2G Marketplace can help local governments procure innovative technologies faster.
“Local government is where the rubber meets the road,” he said. “Perhaps it’s the locals’ job to be innovative when it comes to procurement, but I would love to see local, state and federal combine on a task force to address these issues. Imagine a federal government agency buying a health and human services system, for example, and then allowing a local government to tag onto it. The economies of scale would be huge.”
Taking a Test Drive
Philadelphia recently launched a new program that encourages entrepreneurs to work with the city to identify community problems and develop innovative solutions. Called FastFWD, the program is expected to address existing problems with the city’s RFP process, such as the lack of early engagement with vendors that can lead to limited solutions.
FastFWD lets the city incubate new startups and run pilot programs before committing to launching a full-scale project. For instance, 10 entrepreneurs will be selected to participate in a 12-week program to develop innovative projects around public safety challenges, with the eventual goal of awarding contracts to several of the projects developed during the program. The initiative should help manage procurement risk, since Philadelphia will have the chance to pilot technologies on a small scale before deploying them more broadly. In doing so, the city hopes to save money and benefit from more innovative technology.
“FastFWD is interesting because it allows for a tremendous amount of innovation,” Petty said. “I think that will give the city some significant breakthrough solutions as opposed to asking those of us who have been wrestling with a problem in government to identify the solution and then contract for it.”
Petty said the program also should help Philadelphia feel more comfortable about investing in IT because the vendor has been involved since the inception and the solution that the city is procuring is tailored specifically to its problem.
In December 2013, the IJIS Institute — a nonprofit organization that focuses on mission-critical information sharing for justice, public safety and homeland security — released its latest procurement report, Strategies for Procurement Innovation and Reform. The report, developed by the institute’s Procurement Innovation Task Force, underlined the importance of government procurement reform efforts.
“There has probably never been a time when management of the procurement process has been so important,” said Bob Shumate, member emeritus of the IJIS Institute and one of the project leaders. “With technology evolving at an ever-increasing pace and shrinking public budgets, existing procurement practices for technology projects no longer meet today’s requirements.”
Given the need for change, experts have several suggestions for helping make local government procurement more flexible and receptive to innovation.
Implement Cooperative Purchasing Agreements
In the early 1990s, the Western States Contracting Alliance (WSCA) was formed as a government procurement cooperative. Initially involving 14 small states, the cooperative let them pool their resources, adopt standard specifications for purchasing certain products, and then issue cooperative bids.
“WSCA was a huge step forward for government procurement, and it turned out to be a big success,” Petty said. “There were two key drivers of that. The first was pricing because the states were able to aggregate volume and drive down the price. The smaller states couldn’t get that pricing on their own. The other driver was that they pooled their resources to put out the award. They got a better product because their procurement specs were better.”
Since then, the WSCA has grown tremendously, and today its cooperative purchasing model also benefits cities, counties, public schools, higher education institutions and other eligible entities. Petty said such cooperative purchasing efforts offer a significant upside, especially when it comes to cloud computing initiatives.
“The cooperative purchasing model is really about scale,” he said. “There is a value proposition that comes out of cloud computing, and there is a value proposition that comes out of aggregating your volume through cooperative purchasing. That same notion of scale works in both, so those two things will become very compatible as we head into the future.”