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Observations from the First Month

FullSizeRender 28We’re officially into the final week of our residency month in Pittsburgh! Over the past 3+ weeks we’ve had the pleasure of meeting a ton of people who deal with purchasing in city government, as well as members of the business community, and have learned a lot about what works well, as well as how the process could be improved. In these conversations, a few common themes have come up that we wanted to pass along.

In no particular order, here are some of the main things:

It is difficult for city purchasers to find out what is on contract.

We’ve known since day 1 that this was an issue (we even built our first app to help address it), but we never fully grasped how the lack of a searchable list of current contracts can slow down everyday purchasing. When a purchaser for a given department wants to buy something on contract, they have to consult a spreadsheet of nearly 500 contracts, none of which are categorized or itemized. What this means in practice is that a lot of purchases go to companies that a purchase has experience working with rather than the one that offers the best price, service, quality, etc., etc.

Perhaps more noteworthy is how many purchasers go to Staples for their office supplies, mostly because they can search for items individually and are told immediately whether it’s on contract or not. They may be able to get a given item at a better price elsewhere, but the time they save by going to one vendor with a good inventory is worth it to them.

New contracts take a long time to process and often attract relatively few companies.

Putting a contract out to bid is a pain. Responding to a bid is a pain. We’ve heard voices on both sides of contracting that have said the entire process is extremely onerous, takes too long, and in the end doesn’t always yield the best results.

One issue that stood out in many conversations is advertising. First, apart from the local newspaper, there doesn’t seem to be one central channel or mailing list for businesses to learn about new opportunities. There is a $49/year online subscription service, but not only do businesses have to pay for this information, but they also have to provide their tax identification number, social security number, and other personal information to sign up.

The lengthy internal process outlined above is often accompanied by a relatively compressed advertising period, sometimes as low as two weeks. The reason behind this is unclear, but it struck us as less than optimal. It’s possible that long internal wait times put pressure on departments to push the process along, directly chipping away at the window for businesses to learn about and respond to open bids. Whatever the reason, speeding up the internal workings while lengthening the external advertising period seems necessary. This, combined with better advertising channels would likely be a marked improvement.

Buying off-contract happens – A lot!

Perhaps unsurprisingly, rather than going through the process of establishing a new contract, departments use other channels to get what they need quickly, even for things they buy all the time. The explanatory purchasing process (i.e. petty cash) is one of these channels and it seems to be commonly used across the board to buy supplies needed to do business. Most of the people we’ve talked to aren’t happy with it.

For one, the maximum for any explanatory purchase is capped at $2000. This would be fine if actually used in petty cash scenarios, but many departments are using explanatory purchases to cover essential supplies. The competitive bid threshold (i.e. when departments need to put a contract out to bid) is set at $30,000, but there isn’t a functional alternative for repeat purchases not already under contract. To avoid having to go through a complex and lengthy contracting process, purchasers choose the less immediately painful option.

A second pain point is the oversight that accompanies explanatory purchases. Since it was set up to cover petty cash situations, all explanatory purchases have to be signed off by the departmental director, then forwarded to the Office of Management & Budget, then to City Council who approve a long list of explanatory purchases on a weekly basis, all by interoffice mail. Not only is this a lot of work, but it’s also a lot of wait:

I’m waiting 2, 3 weeks on life-saving medical equipment every few weeks. My biggest aggravation is sending forms downtown for things that I’ve bought before, and will buy again and again.

As one of our interviewees notes above, the explanatory process is a big source of frustration. While it may not be as locally painful as putting a contract out to bid, the aggregate impact on the system is significant.

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What’s next?

Good question! Now that our “listening tour” is wrapping up, we’re looking forward to coming back with some concrete improvements to some of the problems outlined above. The Code for America fellowship is a unique opportunity to build solutions starting with user experience first, which requires us to some extent put aside our desire to always be building things. Over the coming months, we’ll be putting some of our ideas in front of both those within city government as well as business owners to test what we come up with. We’ve already had a ton of fruitful conversations with people who tend to not do much work together, so we can’t wait to see what happens when we can actually have them use what we build.

Until then,

Patrick, Team PGH