March 28, 2014
So you need some work done that you’ve never had done before or you need to buy something you’ve never bought before. What should you pay? That can be a tough question. What seems reasonable? Sometimes we set arbitrary rules. It’s OK if it’s under $50 or under $100. But that’s just a reassurance that you’re not getting ripped off too badly. Certainly the best way to avoid that outcome is to know how much that service or thing is worth, or at least know what others have paid for the same thing.
Fortunately now, in the age of the customer, that’s easier to find out. Price information for most consumer goods is easier to come by, making the buying process more efficient. But what about governments? We’ve all heard about the $600 toilet seat or the $400 hammer. Stories of government spending excess and mismanagement abound. Some are urban legends or misrepresentations. Others have legs — such as the recent reports of Boeing overcharging the US Army. While these incidents are likely not things of the past, open data initiatives have made significant progress in exposing spending data and improving transparency. Citizens can visit sites such as USAspending.gov for US federal government spending or "Where Does My Money Go?" for details on UK national government spending, and most large cities publish spending as well.
But while open data makes access to information easier, data sharing makes organizations smarter. It’s not only about how much was spent after the fact, but knowing how much to spend before purchasing. Government agencies often pay vastly different prices. Last fall, Contra Costa County, California paid $530 for an HP Laserjet M451DN printer that the City of Austin purchased the same week for only $395. Really?! Bet Contra Costa would have wanted to know Austin’s price before writing that check. Well, now they can.
In a new twist on open data, SmartProcure, a new govtech startup, has created a repository of government purchase order data — initially gathered through Freedom of Information Act requests. As the repository grew, government agencies saw the benefits of sharing their data and began to sign up — more than 2,600 public agencies to date provide their procurement data to SmartProcure's repository. Yet all public agencies can benefit, as the repository is freely accessible to any of the 89,000 local, state, and federal agencies across the US. My new report, Data Sharing Transforms Public Procurement: Open Data Enables Adaptive Intelligence And Process Transformation, discusses the benefits of data sharing across public agencies, from more easily finding potential suppliers, to better negotiating contracts, to saving time by collaborating with others for the purchase of the same products and services.
And all of that is available free of charge. Why? Because it provides a wealth of valuable information for suppliers as well. Suppliers are willing to purchase the insights from aggregated procurement data, creating a win-win situation for the agencies and for those looking to do business with them.