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Too Small To Win? Civic Hackers Thwarted by Procurement Rules!

Peoples of the Procurement Departments! Hear me now!

What in the world have you done? Have you doomed us all!?

I present to the people of #OpenGov some of Chicago finest civic coding craftsmanship – ChicagoLobbyists.org

Don’t keep reading, click the link first then come back to me. See the awesome disclosure powers of this site. Every lobbyist. Every lobbying firm. Every action they ever sought. Which agency they lobbied. All. Of. It.

This was done by a team of volunteers who created this because they have a passion for open government. And, they made it open source and they posted it on GitHub. Seriously, it’s right here. After they released the first version, they worked with the city chief data officer to help refine the data and made the site better.

This is a exactly the kind of thing that should happen with #opengov. It wasn’t easy, as the lobbyist currently turn in everything on paper and it has to get digitized the old fashioned way.

So, as part of Chicago’s reform efforts the city wants to build a website where lobbyist register their activities online. Simple enough. So, they come out with an Request For Proposal. It’s objectives are as follows:

  1. enable lobbyists registered with the City to file, on line, all retired registration documents and activity reports.
  2. enable the Department to review and approve these filings as quickly as possible and communicate with lobbyists who must and have not completed their filing requirements.
  3. make data compiled from all lobbyists’ filings publicly available on line in various searchable, queriable reporting formats.

Now, ChicagoLobbyist.org already does #3 and does it pretty well. Now, you’d think that this #opengov project could just take the next step and throw their hat in the ring to make the site. (And they have) However, there is a problem.


I’ll quote the ChicagoLobbyist blog for this next part

Responding to an RFP for the City of Chicago is a herculean task. In the 152 pages, in addition to the usual cover letter, cost proposal, timeframe, etc, the responder must provide

  • a project management/implementation plan (including org chart, all software and third party products used, etc)
  • audited financial statements for the past 3 years
  • an economic disclosure statement and affidavit (EDS)
  • proof of $500k workers compensation and employers liability
  • proof $2 million in professional liability insurance

Needless to say, this approach to an RFP results in proposals from one type of contractor: firms that are very large and able to jump through all the hoops that the City has to ensure the minimum amount of risk and liability for the City itself. The idea is, if they remove all apparent risk in the selection process, no one will be to blame if the project fails since they vetted the options so thoroughly. What the contractor actually builds and how they plan on going about it is completely secondary. This type of process rarely provides high quality products at a reasonable price, especially in software development.

As a group of volunteers working in our free time on this project, we are not what this RFP is targeting. We are, however, very competent developers and designers and have become experts on this lobbying data and how to display it. If the third objective of the RFP (above) sounds familiar to you, that’s because you’ve been to ChicagoLobbyists.org. We have already met objective 3.

And you know what? He’s right. A small business of super-elite developers and designers are still not going to carry $2 MILLION dollars in liability insurance – much less a group of volunteers who create awesome in their spare time. The only firms who are going to do this are giant firms who are probably in the ChicagoLobbyist database already. It’s not that only the big boys can code – it’s the freaking RFP rules. (And, on a personal – if not a little biased note, I sometimes think that my system would work better if it was developed by a small elite team instead of a huge software company that only does 2% of it’s business helping me serve the public)

Are we killing citizen civic innovation when we as government agencies slap these kinds of rules on our procurement process? Code for America just announced their organizing brigades of civic coders to help link like-minded developers in their community to help solve problems. If a small business can’t meet the procurement standards how are the Code for America Brigades? I would make a wager of Chicago’s finest brew that if you put together the sharpest developers in one city to solve a city problem, the result would be better than what a huge company would put together. What have we done with the RFP rules?

Please tell me that this is an oddity Procurement Nation? Do RFPs HAVE to be over a 100 pages long? Seriously? While somebody is sure to tell that there’s a perfectly reasonable explanation on why the RFP rules are set up so unreasonably, it seems like we’re shooting ourselves in the foot with things like this.

What are the procurement rules in your agency? Are they as large as this? What should they be?

You can follow the site’s progress on Twitter @chilobbyists

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11 Comments

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Sterling Whitehead

Our procurement rules in the federal can go just as long. However, these are usually not rules that procurement folks make. Rather, many clauses you see in federal procurement are the result of legislation, court rulings, and regulations made by department heads and councils, not the procurement folks themselves; these procurement rules are almost always implemented b/c something went wrong in the past.

To get around these issues, the Defense Department has ACTDs, but that’s mostly for weapons and command and control type systems. Government in general is nortoriusly bad at software development.

That being

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Christopher Whitaker

I understand there is a reason, but it seems like we’ve created a monster that squashes innovation. Are all the sue-proof things we do the reason why governments are slow on the tech front?

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Profile Photo GovLoop

I think Sterling has a great point – over the years our reaction to waste, fraud, and abuse is to add more protection and requirements. Which sounds good theoretically but the problem is this a few years later where these protections are such a hurdle that it is hard for newcomers to do.

One of my favorite solutions to this is increasing the amount you can purchase before an RFP. Over time it has gone done to prevent waste and abuse…but I think the extra value and cost savings of a higher limit more than makes up for it.

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Joseph R. Gruber

While great points are made here there is also something to be said for small businesses, without the liability insurance, etc…, partnering with the “big boys”.

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John Manecke

I totally agree that the burden of responding to even very simple RFPs is high. That’s why seemingly simple things like a web site cost into the millions.

I would like to point out, however, that the insurance requirements listed here aren’t that onerous. The insurance I carry for my very small business (often just me) meets these requirements. Usually insurnace requirements for a particular contract (even for a one-person sub) are part of the terms and conditions that flow down from the prime contractor. So a small busines is required to have this level of insurance even when teaming with larger primes.

The price for this amount of insurance isn’t outrageous. In general, the annual cost of maintaining insurance at this level (general liability, workers comp & profesisonal liability) is less than the cost of reasonable health-insurance for a year for one person. It’s meaningful money, but it’s not so high that it prevents me from responding to these type of RFPs.

The more difficult condition to meet, in my view, is the autidted financial statements for the past 3 years. Most accountants will tell you that as a small business it’s not worth paying for a full audit if you don’t need to. A small business can get credit and even some types of bank loans with only prior year’s tax returns and unaudited financial statements. Further, if you don’t already have audited statements, it’s unlikely you can get them put together in time to respond to something like this.

From my perspective, the requirement for audited financial statements puts the greatest limit on the size of business that can respond to this RFP.

Great topic.

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Paul Wolf

Good points John.

I understand the need for insurance and agree that it should be obtainable for a small business. To encourage small businesses to respond the need for audited financial statements should be eliminated as a requirement from most RFPs.

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Christopher Whitaker

So there may be some small businesses that have this much insurance, but we can’t assume that all of them would. This still doesn’t answer my concern about small teams of volunteers. The group that built Chicagolobbyists isn’t a small buisnes – they are all volunteers with day jobs. There is no way they’d carry insurance.

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Paul Wolf

Chris,

For 3 years I was involved with procurement as an attorney for a public housing authority. I never had a group of volunteers offer to provide a product or service. While I try to be creative as possible as an attorney insurance is always a concern due to liability issues. It is hard for established small business to respond to government RFPs and utilizing volunteers is a whole other issue that I have never thought about before.

I am interested to hear how others have dealt with this issue or what suggestions people have for doing so.

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Christopher Whitaker

Thanks for the insight Paul

I believe Chicago is a unique case, but with Code for America organizing brigades and app contests helping to generate civic code – I’m certain we won’t be the last case.

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