Unit 2: Intention — collecting needs and defining statements
Summary
The most important step in public procurement is defining your intention. What is the problem that needs solving? Why is it important? What do you aim to achieve? What is the measure of success? Those needs and objectives should be translated into a clear problem statement. Your procurement will only have impact if the problem that you aim to solve is relevant.
To be able to answer these questions, cities need to embark on a process of collecting needs and problems, involving a variety of stakeholders. This unit provides practical steps on how your City can identify and prioritize problems and needs, followed by guidelines on how to articulate these in the form of robust problem statements. Your problem statement is what underpins your procurement process.
Collecting needs and problems
By mapping needs and problems and prioritizing them in a systematic way, cities can ensure the most adequate allocation of resources. Different decision-makers and stakeholders should be involved in collecting the needs and problems in your city. Soliciting input and obtaining buy-in from key stakeholders early on will ensure the traction you need to embed lasting change.
The identified needs and problems should reflect the broad goals of your government (e.g. transparency, innovation, economic development) and make use of available data. If your City has already embarked on a process to identify needs, make the effort to engage with it and insist on opening up the process to others.
“The key step in procurement is identifying what you need… then finding people to consult at an early stage, either from the city organization or externally, who can help you develop procurement that keeps all the options open”.
Adrian Walker, Global Head of Infrastructure, Energy, Resources and Projects, Hogan Lovells
Here are some ideas and examples of how to involve the right people:
- Internally, convene meetings and workshops to foster cross-departmental relationships and break down silos. Get input from people of all levels of seniority and involvement, making sure both the mayor’s office and the procurement departments are involved from the beginning as well those who will be responsible for implementing the new services. Include the expertise of relevant agencies and public-private partnerships, too.
Example 1/
In San Francisco (USA), in 2014, the City’s leadership introduced Vision Zero, the transformative program to eliminate all traffic-related deaths by 2024. Their ground breaking approach saw the collaboration of the Municipal Transportation Agency, Department of Public Health, and the Public Utilities Commission for the first time.
- Outside City Hall, harness the expertise of specialists, engage with user groups and involve the local media. Use existing channels to engage with citizens’ opinions on the pressing needs of the city — or, if needed, establish new ways to do so.
Example 2/
In the UK, Nesta’s Centre for Challenge Prizes regularly holds an open-house Challenge Definition Day to include a wider audience in defining the challenges that Nesta publishes.
Example 3/
Oakland, California recently invested $35,000 in improving citizen-to-government communication through IdeaScale, an online forum where citizens can respond to questions, make suggestions, and vote on proposals.
The figure below can help you design the evaluation framework to source and select problem ideas in your city. This exercise will help you select the most pressing problems to develop into problem statements, by prioritizing problems and needs based on a common set of criteria. It is a suggestion of likely criteria which can be adapted to your particular context:
After identifying the key problems to be tackled through procurement, it is essential to develop them into a solid problem-statement.
Your problem statement sets the course
Your problem statement is a powerful tool to build alliances, secure commitments and express the intention of your procurement effort. Everyone involved from this point forward — experts, attorneys, the media and public, providers and evaluators — will refer to this statement.
Anchoring your approach to a statement that is validated across government shifts the emphasis away from simply whether the solution succeeds or fails to one of a managed risk that is shared across every step of the process (for more on risk management, see Unit 6).
“If you open your government and allow others to help you solve your problem, you can more effectively and more quickly and more cheaply solve that particular problem.”
Chris Vein Non-Executive Chairman Startup Policy Lab, former CIO at the World Bank, CTO at the White House and CIO at the City and County of San Francisco
Governments use different types of statements to form the basis of a sourcing document, as shown in Table 3. Our analysis shows why, in many cases, it may be more desirable to describe an open-ended problem rather than a detailed specification.
“Procurement should be performance or outcome based. We shouldn’t design the solution… You have to craft the process to meet the objective.”
John Adler, Vice President of Procurement at Dallas Area Rapid Transit
Defining a problem statement
A concise and well-defined description of the problem is essential in the process of opening up cities’ needs. The clarity of this problem statement will directly correlate with the quality of the solutions submitted as well as the relevance of the evaluation effort.
“To stimulate innovation the most important step is to determine what your challenges are and what you expect to achieve. Then listen to the market response. This should be done in an open way”.
Oscar Puigdollers, Barcelona Municipal Services
A problem statement can be up to 10 pages long, although it is best practice to keep it to one page. When drafting your text use clear, simple language with exact descriptions that avoid ambiguities. Avoid jargon and unnecessarily technical terms. This statement is published in your sourcing document and will be an integral part of any future contract, so must be unequivocal yet still inspire the market to respond.
It may be recommendable to look at how other cities have dealt with similar issues in the past to learn how their problem statements affected the final outcome of the procurement. Additionally, cities with similar needs and contexts may find it helpful to undergo this process together.
The role of Key Performance Indicators (KPIs)
Key Performance Indicators (KPIs) are a set of measures used to assess performance against agreed expectations. They may relate to any aspect of a contract and may be associated with points or other systems under which incentives and/or penalties are allocated.
Defining the KPIs at the stage of problem statement definition will help you to measure the performance of the process, but also how it fits at the operational level and within the wider context of your City’s governance. This will enable you to ensure that you collect the correct data from the beginning to monitor the success of the program. As much as possible, your KPIs should be aligned and derived from indicators already in place across the City. They should also be made measurable by establishing timeframes and boundaries, for example: ‘Increase satisfaction levels by X% within given timeframe in communities affected by Y initiative within 2 years’.
KPIs should be a range of 3–5 easily measurable points around the targeted service or solution that fall under: direct outputs of the project, outcomes of the solution implementation and long term impact of the solution. For more on KPIs please see Unit 7 on measuring results.
Underwriting the problem statement
Problem statements can act as keystones around which to build alliances and consensus on priority issues. An important step in this process is to conclude this phase of collaboration with a formal underwriting — ideally in the form of a signature or other written commitment.
Cities can use different tactics to achieve such formal commitment in a relatively short turn-around time, often setting clear rules for engagement and leveraging the weight of executives or political leaders at key moments.
Once you have articulated the problem into a clear statement and gained the formal support of relevant key stakeholders, you are in a strong position to design your procurement path.
Key Takeaways
- Solicit internal and external input to collect your city’s needs and filter them according to their relevance, urgency, support and broader impact (social, economic, environmental).
- Involve the right people when defining what you want to achieve, both internally and externally. This can include experts from the academia or the private sector, citizens, or officials from other relevant departments. You might also want to ask other cities how they have dealt with a similar problem.
- Focus on describing the problem you want to solve or the need you want to address instead of specifying the solution you want to buy. Prescriptive approaches carry big risks and exclude new ideas, business models, and smaller providers with no experience of responding to public sector solicitations.
- Use simple and clear language when defining the problem statement, be specific and use measurable objectives and KPIs. The clarity and rigor of your problem statement will directly correlate with the quality of solutions submitted as well as the quality of the selection process.
- Soliciting input and obtaining buy-in from key stakeholders early on will help ensure you are able to get the traction you need to embed lasting change.
Now do your homework!
Get a copy of the Worksheet to collect and prioritize problems and needs in your city. Practice the drafting of problem statements, the first major step in the procurement process.
Congrats!
Proceed to Unit 3: Choosing your procurement path
