Government marketplaces for government procurement teams - Observatory of Public Sector Innovation

The City of Seattle spends over $720 million every year. With the surge of COVID-19, small businesses were left in a highly vulnerable position, forcing many to shut down. This is especially true for women and minority-owned small businesses (WMBEs). We worked with the City to launch its e-commerce government marketplace, providing a platform for government buyers to seamlessly find local WMBEs, access their products and services, obtain quotes, and check out with a few clicks.

Innovation Summary

Innovation Overview

The City of Seattle is one of the largest cities in both the state of Washington and the Pacific Northwest region of North America, with a community of over 737,000 residents. It is also one of the largest buyers in the region, spending $724 million every year. The City aims to increase the number of women and minority-owned businesses it buys from by optimizing its contract database.

With the surge of COVID-19 in the area, the small business community was left in a highly vulnerable position, forcing many to shut down. This is especially true for women and minority-owned small businesses (WMBEs). Glass worked with the City of Seattle to launch its online WMBEs Local Portal. With the Portal, the City delivered a user- friendly experience for government buyers to seamlessly find local WMBEs, access their catalogs of goods and services, obtain instant quotes, and check out with only a few clicks.

Before launching the Portal, government buyers at the City of Seattle had to navigate through three different sources of information before finding WMBE vendors. The first two sources, the City's Oracle PeopleSoft Supplier Portal (which currently holds 1,100 long-term blanket contracts) and the City's Online Business Directory, allowed buyers to filter vendors and registered businesses by their WMBE denomination. However, we found that searching on the system for WMBEs was very cumbersome and certain labels were not accurate. The third source, the open market, required buyers to search on Google. This prevented them from discovering local WMBEs that were not digitized but that could perfectly satisfy their needs.

The fragmentation and inefficiency of their systems forced buyers to perform extra manual work, including calling vendors on the phone to verify their information and requesting quotes by email, sometimes taking over a week. Additionally, the efforts of the City's procurement department to promote inclusive, open, and equitable business contracting practices, including webinars, trainings, vendor fairs, and certification services, were not delivering the expected outcomes, making both buyers and the business community frustrated.

By leveraging these 3 fragmented sources of information, we:

Updated and curated vendor data using AI;
Transformed the City's PeopleSoft Supplier Portal and Online Business Directory into actionable catalogs of goods and services;
Enabled a checkout similar to those of online commercial marketplaces;
Directed the purchasing process towards a more diverse, equitable, and inclusive one; and
Optimized for efficiency and compliance by directing government buyers to preferred WMBEs with negotiated contract prices first, to those registered on the Online Business Directory second, and the open market third.

In the next few months we expect to help the City of Seattle:

Reduce by 50% the time and effort it takes to find, do direct purchases, and receive qualified quotes from contracted, registered, and open market Seattle WMBEs;
Increase by 30% the number of WMBEs registered to do business with the City;
Exceed by 20% existing socio-economic goals and supplier diversity; and
Save up to 15% of taxpayers' money by seamlessly sourcing local goods and services from WMBEs.

Innovation Description

What Makes Your Project Innovative?

Governments are the single largest buyers in the world. However, public procurement, the process by which governments acquire goods and services, is  a fragmented and highly manual $16 trillion dollar global industry that over 400 million small businesses cannot access.

More specifically with the City of Seattle, government buyers find it difficult to conduct small purchases — simple, discretionary transactions with credit cards and direct purchases, that take significant time, research, training and documentation. On the other hand, small businesses often don’t have the capacity or experience to win big contracts, and their lack of digital infrastructure and low visibility makes it hard for governments to discover and buy from them.

Bridging this digital gap and enabling government agencies to make convenient and compliant purchases under their bidding thresholds at the speed of e-commerce, while reaching their socioeconomic goals, is our unique objective, and biggest differentiat

What is the current status of your innovation?

We've been working hand in hand with the City of Seattle's Logistics and Emergency Management Division, providing them with the Seattle WMBE Portal, allowing government buyers to seamlessly find and buy from local WMBEs (Women and Minority-Owned Business Enterprises). Only a few months in, we've helped the City save over $1.5k, increase by more than $10k their annual WMBE spending, and simplify how government buyers discover and access discounted prices from their current blanket contracts.

This marketplace is simplifying government purchasing by digitizing products from their current blanket contracts (which are in PDF format and are not actionable), bringing them to an actual transactional platform. Buyers have also been able find highly-relevant open market vendors and compare prices in real time. Our key metrics to date are as follows: 1) 6,720 products onboarded; 2) 20+ blanket contracts digitized; and 3) 59 open market businesses onboarded.

Innovation Development

Collaborations & Partnerships

The government officials at the City’s Logistics and Emergency Management Division have provided us with actionable insights into our software so we can continue improving the User Experience (UX) and User Interface (UI).

Additionally, they’ve been extremely helpful by leveraging their existing network to encourage new users to use the platform and benefit from it.

Users, Stakeholders & Beneficiaries

Our main users have been:

Government buyers at different departments interested in simplifying how they buy industrial supplies and equipment.
Vendors who are interested in streamlining their sales processes with the government, and expanding their customer base, if they have never done business with their government before.

Innovation Reflections

Results, Outcomes & Impacts

6,720 products onboarded;
20+ blanket contracts digitized; and
59 open market businesses onboarded.

Challenges and Failures

The biggest challenge faced has been encouraging new government buyers from other departments at the City of Seattle to try to use the platform to simplify their small purchases and increase the number of women and minority-owned businesses they buy from. This is mainly because apart from the Logistics and Emergency Management Division, other departments are not fully aware of the marketplace.

The way we’re tackling this challenge is by reaching out to each department individually via email marketing campaigns and one-on-one emails. We also expect to continue using complementary communication channels to increase our outreach, and leverage our existing relations with government leaders in the City to expand the outreach of this pilot.

Conditions for Success

We believe that the most important conditions for success are the ability to work hand in hand with a large number of government buyers to pilot the solution within all the 40+ departments that exist in the City of Seattle. So leadership and guidance from the department heads would be extremely beneficial.

Replication

We’re aiming to pilot our government marketplace solution with other local governments in the US as well. Different cities, counties, special districts, and even publicly-funded educational institutions like community colleges, have very similar challenges in the procurement front, and also have similar goals, including expanding their pools of available government vendors and therefore increasing competition and opportunities.

We believe cities with a similar size of the City of Seattle (700k+ people), or even cities with a smaller size in California (around 200k people) would be great early adopters of this innovation, and could help inform its future for larger organizations, including state and federal governments.

Lessons Learned

It’s been very important to work hand in hand with our government partners to understand their experiences, and feedback when interacting with our platform. Government users’ feedback has been pivotal to nailing some of the marketplace’s core functionalities and simplifying the overall User Experience (UX). It’s also been incredibly helpful to work with government partners who are willing to try new tools for an agreed period of time, even if the tool has been used with others in the past. Having a leadership interested in bringing innovation in the public sector is key.

Anything Else?

Given the importance and impact of the work we’re doing, we’d like to be considered to be a speaker to present at the World Government Summit 2023, and show more about what we do in future OECD publications and OPSI events.