New Standard for engaging SME participation in open public contracts

GovTech Poland has developed world's first challenge based procurement model where the authors of the best idea receive a full implementation contract without the need for an additional cumbersome tender. With the goal of opening procurement to all creative individuals, the model covers the process from identification to implementation. A pilot run, tested in both central and local institutions has increased SME participation in procurement processes by an average of 1600% (in a sample of 250) and further implementation of the model is ongoing.

Innovation Summary

Innovation Overview

Imagine - a public official identifies a problem, quickly fills in a form and soon after, thousands of innovators from all around the world can start working to solve it, leading to a fully workable and implemented solution only a few months later. No formalities involved - a simple idea-code-reward system that allows everyone to focus on what they do best and for small start-ups to compete with multi-billion corporations. The very idea to make government agile and bring the innovative spirit to the public administration was the founding principle of the GovTech Poland initiative.

The process, initially piloted in 2017 in the Tax Administration, started with a small idea. Current procurement regulations were designed for large, experienced market players, proving a detriment to small companies with big ideas. We started off with the challenges presented at the largest stationary hackathon in Europe. The best were asked to further develop their solutions using the infrastructure the State can provide, and ended up with a solution that decreased fraud rates by over 80%, all in a few months. The development of a 48-hour hackathon challenge which lead to spectacular field results showed us that opening ourselves to these brilliant individuals and small businesses could bring astonishing results. All we needed was to further develop the process, bringing in the entire public sector.

This year, we are doing just that. Six ministries along with several local governments are participating in this year's edition, showing that the approach can work just as well for a central institution or the smallest municipality. All our partners are in constant need of digital solutions but have not had the expertise or market power to reach the worldwide community of innovators. In order to change it we have focused on five main goals:

- equal opportunities for innovators: ideas matter, not the organisation's size
- making government procurement simple and agile
- knowledge exchange: promoting the innovative spirit to the administration, and public involvement to the innovators
- opening the government to best market practices, making it an attractive business partner
- increasing the diversity of ideas, helping small institutions implement big projects

Challenge areas vary - from developing a learning image recognition software to combat traffickers, to a system allowing residents to report malfunctions of public infrastructure, or an algorithm for making emergency number operators more efficient. They have one thing in common - they all directly or indirectly benefit the community. Once the challenges are formulated, the GovTech team works with the institution, helping it to assess the challenge's viability, prepare the budget and legal documentation. Even at this earliest stage a number of companies of all sizes that normally work on similar projects are constantly consulted to make sure the challenge conforms to the highest industry standards. After that, the first stage begins. With adaptability in mind, we allow those with clear-cut ideas to go through the entire process online, but if someone wants to form a spontaneous team, it is possible during one of the largest hackathons in the world, where the event officially begins. After two weeks, the participants submit their ideas which, along with some small sample of the work to come, are evaluated by a jury composed of public officials and industry experts. The best win cash prizes and advance to the second stage, where the challenge sponsor hosts participants for a week and creates an environment where they can perfect their initial submission using every resource available. After that, the winner is invited to implement their solution. There, the process is facilitated by professional staff, employing workflow improvement methods, such as scrum, design sprints, and milestone setting. The process is kept agile and makes use of a new type of contract design to combine transparency with efficiency. All that's left is for everyone to enjoy the fruits of their labour and use the experience for future initiatives.

Parallel to the legislative changes, we are working on expanding the initiative both in width, by involving more institutions and in-depth, by adding new components. We are working on introducing an acceleration program, to turn one contract into a lasting partnership, and a digital marketplace platform, where innovators can interact directly with institutions. While all that is in the works, a perhaps even more important process is occurring - officials are being trained in design thinking, openness and best market practices to build what GovTech (and administration) is really about - people working with each other to make something around us better.

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Supporting Videos

  1. Good case, similar to Chile’s Government procurement program for SMEs, called ChileCompra (Min of Finance)…another best practice case (in Spanish)… I have worked with the EU consultant in Chile in the mid 2010’s on the design and implementation,,, will contact them if interested in submitting a Case to OPSI.
    Julio Fuster

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Year: 2017
Organisation Type: Government
Level of government: National/Federal government

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