City Innovate is known – in part – for pioneering the use of a Challenge-Based Approach™ (CBA) to market research and procurement. Depending on your jurisdiction, you may call this “Outcome-Based Procurement” or “Proof of Concept (PoC)”.
Regardless of what you call it, here’s what you need to know.
In government, procurement is a complicated process that takes a long time to resolve with many moving parts that can go wrong. This is particularly true for procurements that involve acquiring complex technology.
Starting in about 2016, procurement reformers in the U.S. and Europe got involved to pioneer a new form of procurement designed to cut the time required and get higher quality solutions to government problems.
At the heart of this new method are two ideas: 1) ask vendors to respond to a problem statement, and 2) build a Proof of Concept (PoC):
1. Problem Statement
Where the old way of doing things was to specify a long laundry list of requirements, the new–challenge-based way–is to focus on asking vendors how they would solve a business problem. Vendors tap into their experience with other government entities and even the private sector when responding to the challenge. Results are impressive, bringing vendors to the table that might have gone overlooked had a traditional procurement methodology been used.
2. Proof of Concept
Integral to a Challenge-Based Approach is the idea that better outcomes result when vendors are asked to ‘show’ us what they can do in response to a problem statement vs. ‘tell’ -ing us about their capabilities. This implies taking a phased approach … often in phase 1, vendors or jurisdictions must prove they meet qualifications before they go onto phase 2 of the evaluation. Those vendors who are tapped to go on to Phase 2 create a proof of concept. The proof of concept is not designed as a throwaway; its designed to give both the vendor and the client a running start on what the technology can do to solve the problem posed. (Typically, all vendors who participate in the proof of concept are paid for their efforts.)
The methodology moves procurement officers away from long laundry lists of features/functionality. Creating this kind of list presumes that the procurement officer knows the solution to the problem – and often that just isn’t the case. As we write this, ChatGPT is taking the world by storm. This is novel technology and we don’t (yet) know exactly how it applies to government. This is just an example; today many, many problems are novel enough that it makes sense to turn to the vendor community for innovative solutions.
This is where a Challenge-Based Approach – applied to market research or procurement – really shines – in uncovering innovative solutions to the problems facing government.
Today, you’ll find a Challenge-Based Approach used by the U.S. military and in multiple jurisdictions from California’s Department of Technology (CDT) to New York’s Office of General Services (OGS).
To learn more about Challenge-Based Approach read our blog post.