Our Departments and Offices

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2 Our Departments and Offices OPERATE GOVERNMENT EFFICIENTLY, EFFECTIVELY AND ALWAYS WITH INTEGRITY Office of Innovation & Technology Procurement Department Records Department Fleet Management Public Property Bureau of Administrative Adjudication Office of Administrative Review HR & Talent Contracts Open Data & Digital Transformation Innovation 2

3 Annual Value of City Spend $170 million on Supplies and Equipment $2.9 billion on Purchase of Services 1,900+ Different Vendors 2,250+ Vendor Opportunities a Year $3.1 Billion in Total 3

4 Process Improvement Stakeholder Engagement Organizational Change Strategy for Procurement Modernization OPERATE GOVERNMENT EFFICIENTLY, EFFECTIVELY AND ALWAYS WITH INTEGRITY PHLContracts Reverse Auctions E-Signature Contracts Hub Best Practices Procurement Citywide Working Groups Collaboration With City Council Vendor Focus Groups Chambers of Commerce Vendor Events Purchasing Functions Centralized Under CAO Collaboration Across Purchasing Functions 4

5 Ongoing Projects 1. Best Value: Will allow the City to choose vendors based on important factors like quality of work 2. PHL Contracts: A web-based procurement system for online bidding 3. DocuSign: Electronic signature system to streamline approvals on professional service contracts 4. Reverse Auction: Reverse e-bay for the purchase of commoditized products 5. Sharing Upcoming Opportunities: A contract log of expiring contracts can be found on PHLContracts 5

6 Forthcoming Projects RFP Tool: Enhancing the writing and assembling of RFPs Contracts Hub: An aggregate site that lists all contracting opportunities in the City Best Value Implementation: The City intends to run 1-2 best value procurements by the end of calendar year

7 Upcoming Event: Open for Business 7

8 Procurement Department

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10 Process Improvement Stakeholder Engagement Organizational Change Strategy for Procurement Modernization OPERATE GOVERNMENT EFFICIENTYLY, EFFECTIVLY AND ALWAYS WITH INTEGRITY PHLContracts Reverse Auctions E-Signature Contracts Hub Best Practices Procurement Citywide Working Groups Collaboration With City Council Vendor Focus Groups Chambers of Commerce Vendor Events Purchasing Functions Centralized Under CAO Collaboration Across Purchasing Functions 10

11 Electronic Signatures for Professional Services FY16 Average Day Count without E- Signature FY17 Average Day Count with E- Signature 76 days 34 days On average savings: 42 days 55.2% decrease 11

12 PHLContracts The City s First eprocurement System Over 1,600 vendors registered Public Works bids rolled out in November bids posted All services, supplies and equipment will be rolled out June 2017 Full roll out by January

13 Performance Metrics Public Works 112 bids posted since roll-out Nov bids closed with 472 responses 49 responses by MBE/WBE s (10.38%) (Compared to 1% in FY16) 215 were by local firms 5 bids were awarded to MBE/WBE Firms 16 new bidders (2 MBE/WBE Firms, 4 local) have joined the competition Average number of bidders has increased from 3.74 to 4.92 FY 17 Initiation to PO (compared to 137 in FY16) 5 Year Plan Goal 90 Days 13

14 Performance Metrics Service, Supply, and Equipment Bids (Departmental & Citywide) 38 bids posted since SS&E roll-out July bids awarded 1 bid awarded to MBE/WBE firm 11 currently posted and opening in the next month 52 bids currently being developed Small Order Purchase 104 SOPs have posted since SS&E roll-out 55 SOPs awarded 23 regional vendors 5 local In FY17 SOPs showed an increase in MBE/WBE participation with 16.4% Increase of 7% Surpassing 15% goal 14

15 Vendor Performance in PHLContracts Standardized documentation & rating of Vendor Performance for Public Works and Services, Supplies, and Equipment contracts Enhanced ability to integrate vendor performance with solicitation awards Improved ability to share information across enterprise & with partner organizations Procurement Department notification of documentation Vendor feedback allowed Standard dashboard and adhoc reports 15

16 Performance Metrics Special Services Inventory Control Revenue generated from vehicle auctions % revenue growth of surplus disposal from prior year Revenue generated from scrap Contracts % revenue growth of scrap contracts from prior year FY2016 FY2017 $268, $1,150, % 329% $ 98, $ 118, % 20% # of Disposal Concessions Active Concessions 19 Total Sales for FY17 $220,098, Total Revenue for FY17 Advertising $37,900, Advertising Spend (CY) $1,785, Average # of days to pay newspaper (CY) Average # of days to pay newspaper (CY) Third Quarter of (CY)

17 Reverse Auctions Support Reverse e-bay to increase buying power on the purchase of commoditized products. Approximately 8-10 reverse auctions held during calendar year 2017 Example commodities: water treatment chemicals, vehicles, lumber, concrete slabs, bottled water Products Event Date Estimated Annual Contract Savings Toilet Paper March 22, % $92, Fixed Price Recycling Bins March 22, % $144, Fixed Price Toweling & Wash Cloths December 16, % $25, Fixed Price Water Treatment Chemicals July 6, 2017 <1.00% $10, Fixed Price Concrete Slabs August 30, % 41, Fixed Price 17

18 Performance Metrics Reverse Auction The City is increasing buying power for commoditized purchases Approximately 8-10 reverse auctions held during calendar year 2017 Example commodities: water treatment chemicals, vehicles, bicycles Next Reverse Auction: Thermographed business cards The City has seen cost savings in the following commodities: Products Event Date Estimated Contract Savings Toilet Paper March 22, % $92, Fixed Price Recycling Bins March 22, % $144, Fixed Price Toweling & Wash Cloths December 16, % $25, Fixed Price Water Treatment Chemicals July 6, 2017 <1.00% $10, Fixed Price Concrete Slabs August 30, % $41, Fixed Price 18

19 2 mins. added to last bid to avoid bid sniping 19

20 Example screenshot from auction 20

21 Reverse Auctions Recycling Bins Without Reverse Auction With Reverse Auction Contract Savings of 30.25% leads to more buying power to service constituent needs 21

22 Best Value Approved by the voters this May, Best Value allows the City to choose vendors based on important factors like quality of work, on-time, on-budget and diversity and inclusion goals. Regulations guiding this process will be publicly posted Best value method will be a consistent and centralized process 18 of the 20 largest cities use best value, along with the federal gov and PA The City s strong pay-to-play rules will apply to all best value contracts Best value will be used for the most complex opportunities 22

23 Best Practices Research 23

24 How did we get here? Bill supported by Council Members and Introduced Bill passed and signed by the Mayor Legislative Approval Question posed to voters of Philadelphia Voters approve External Approval Regulations posted for 30 days with comment period 24

25 Why is Best Value Important? Section 8-200, Philadelphia Home Rule Charter: Except in the purchase of unique articles or articles which for any other reason cannot be obtained in the open market, competitive bids shall be secured before any purchase, by contract or other-wise, is made or before any contract is awarded for construction, alterations, repairs or maintenance or for rendering any services to the City other than professional services and the purchase shall be made from or the contract shall be awarded to the lowest responsible bidder; MODERNIZING OUR TOOLS FOR CITY PURCHASING Purchasing in 1951 Purchasing in

26 Low Bid vs. Best Value Lowest Responsible Bids are evaluated on price only, without considering capacity and ability to complete Lowest price going in, doesn t necessarily mean lowest coming out as vendors often bid the plans not the job which can lead to an increased number of change orders Centralized process focused on selecting the lowest cost vendor One size fits all No feedback given to vendors Does not require past performance with M/W/DSBE (can drive up costs) Best Value Bids are evaluated on multiple criteria, including capacity, cost and completeness Allows for negotiation and clarity around what is needed to complete a project on time and on budget Centralized process focused on getting projects implemented and completed Flexibility with lowest responsible and best value Allows feedback and education for vendors Promotes the incorporation of past performance with M/W/DSBE 26

27 Customer Survey - Staff Acknowledgements Joni Washington was very helpful in explaining the process and different suggestions to make sure that we get the most bang for our buck. Her level of expertise and willingness to help was greatly appreciated. Inventory Control is very expedient in responding to questions, concerns and transactions. Sanchez Justice took the time to locate it for me and made sure that she was able to give me an answer before we hung up. She worked diligently to find a solution and it was greatly appreciated. Angula has been very, very helpful every time I need help! Inventory Control Excellent Quick Service Joe and Ian were phenomenal at their jobs and explaining to everyone the process and putting our minds at ease with their professionalism and desire to help. they are a great team and a great asset to the City and Procurement!! Aycha has always been a wonderful asset to the procurement team. Whenever I have questions she explains fully and gives me great options and suggestions. She truly is invaluable and I can always count on her to help resolve my issues. 27

28 Procurement Accomplishments Fire Department Grant for Smoke Detectors Purple Heart Love Park Sewer Main PHLContracts Sourcing 28

29 OIT x Citymart Implementing Problem Based Procurement

30 About Innovation Management 1 Strategic unit for OIT 2 Increase capacity for innovation and creative problem solving 3 Diversify stakeholders and collaborative partners

31 Why problem-based procurement? Better understand the problem you re trying to solve Consider alternatives to how you want to solve your problem Diversify your vendor pool Identify the best path forward to solve your problem

32 Applying PbP: How can Philadelphia become a Smart City? ID the problem Create the solicitation Go to the market Review Make a decision Unused assets: Towers and access points from Wireless Philadelphia Costly to the department Leveraged Request for Information (RFI) process Developed a soliciation to target a wide pool of solution providers Invested in public outreach and engagement to capture a broad audience BigIdeasPHL Citymart Landing Page Traditional and Social Media s Cross-departmental promotion 106 Responses! Facilitated a cross-departmental review and discussion of all responses SmartCityPHL was established and began strategic roadmap process

33 Immediate benefits? Allowed for a better understanding of Smart City Created an opportunity that mattered to a wide range of stakeholders Laid foundation for SmartCityPHL Engaged and encouraged a broad community of solution providers Guided and shaped how the City wanted to move forward with the adoption of smart technology and Internet of Things

34 Ellen Hwang Program Manager for Innovation Management Office of Innovation & Technology

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36 Too many times we only realize at the end of a public procurement that we asked for the wrong thing

37 40 years is the average it takes for a successful solution, proven in one city to scale to just 1% of other cities < 1% of city governments have data on what projects departments are working on Public procurements on average are carried out with less than 3% market knowledge Cities attract just 2-4 bids per public procurement often representing just 2% of possible vendors Haphazard networking - cities struggle to identify officials that can give first-hand insights on implementing solutions

38 Meet Citymart: Solution Citymart revolutionizes the way city officials complete critical tasks in framing needs, procurement, and improving service delivery, building on best practices developed with leading cities around the world. Citymart is designed to create immediate value for users across all levels of municipal government. Project Inventory Market Intelligence First-hand insights Market engagement Capture and give visibility to projects in minutes using best practice workflows, and connect them to related projects across departments Discover related projects in cities around the world and get inspiration on possible solutions to achieve best results Connect to people with relevant experience in related projects across departments and cities Understand the total addressable market and supercharge your RFI, RFP, tender or challenge to reach new vendor groups and multiply bid results 3

39 Citymart analyzed Montreal s public procurement data and benchmarked it against results achieved in our partnership with Philadelphia. Bid # and diversity of vendors are important drivers of effectiveness, cost, innovation and economic development. 1.7M population Bids / procurement: 3.7 (AVG) 1.6M population Bids / procurement with Citymart: 42 (AVG) Stormwater RFP/RFI Comparison (a comparable opportunity run by both cities in 2016) # bids (Total) # local bids # national bids # int'l bids # SME # MWBE # solutions previously unknown to city # corporates Montreal Philadelphia / Citymart

40 Meet Citymart: Use Case Cities get Market Insights to help finalize their documentation before engaging a much broader vendor-base through Citymart Solicit. Citymart Market Insights showed 22 possible solutions to achieve Philadelphia s traffic safety goal, helping to refine to refine and set goals for the RFP procedure. Citymart Solicit runs Philadelphia s RFP, multiplying the number of bids by reaching new vendor groups. The winning bidder was previously unknown to the city. For just $32,000 the solution provides data on Philadelphians traffic knowledge and behavior and now informs preventative policies and measures.

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42 Contact us for a demo! Sascha Haselmayer CEO sh@citymart.com Julia Haselmayer Head of City Partnerships jh@citymart.com 7

43 Brainstorming Session Example from Meeting Specify the Problem Understand the Market Well-Designed Terms and Conditions User-Friendly Procurement Process Engage the Market Action Item: Build a relationship with the department you are working with: Make the time to meet with them in person Understand the work they re trying to do Serve as a consultant and provide a comprehensive view around the solution they are trying to adopt via procurement Action Item: Ask vendors to suggest other items on the bid that may not have been considered Action Item: Ask department what their motives and metrics of success are in order to help them develop a strategy to pilot their interests in 1-4 contracts Action Item: Ask purchasing departments In a product exchange, how can we evaluate the fit and appropriateness of a solution? End users should learn what s in the market before defining a solution; perhaps consider RFI to scope potential before creating an RFP solicitation Action Item: Ask what else our current vendors have to offer and have information interviews with potential vendors and other city buyers Action Item : Create an abridged version of pre-qualified information request for vendors Action Item: Compile and hold educational sessions for vendor contracts with federal funding and terms and conditions--provide clarity and understanding Action Item: Encourage departments to have non-mandatory pre-bid meetings so as not to disqualify vendors who are unable to attend the meeting Action Item: Engage Law & Risk early on and provide feedback from vendors; need to find a way to communicate potential ideas in a way that resonates with Law & Risk colleagues Action Item: Re-evaluate T s and In order for vendors to be paid in time, they must have information consistent between W-9 and Payment information documents Action Item: Find strategies to clearly communicate the IMPACT of why vendors need to make sure documents are consistent and complimentary from the start How do we help vendors understand the Consent and Authorization Agreement? Action Item: Need to find the right contact within the company to properly register and sign-off on the agreement; may not be the first person you are connected with How might we better track invoices and analyze the data? For vendors submitting bids electronically in PHL Contracts and may be unfamiliar with process Action Item: Find ways to educate and provide a walk-through of the new platform (Continue on-site training, develop webinars, and invest in communication and marketing) Action Item : Go where potential vendors are; find new outlets of discovering solution providers Potential outlets: Marketplace.city Private sector events

44 if they need other resources (e.g. training, client education, equipment) in order to successfully deploy the new products effectively and for maximum client acceptance C s--read professional service contract review (completed by CAO); send out a survey to vendors; Engage the market Action Item: Compare T s & C s between private sector and government requirements; how do they differ? What is absolutely necessary in a government contract and what can we reconsider? Need to understand the differences between what is legal/law and what is policy Consider the utilization of purchasing cards Create performance-based contracts