The Case for Piggybacking Tech Contracts in California (And Other States, Too!)
What it is and why it’s great for government technology
By Andrew Watkins, Co-founder, and COO, Marketplace.city
Piggybacking on technology contracts can help cities and counties acquire great tech at a competitive price, while drastically streamlining the procurement process. We see a shift toward this process for several reasons: cloud-based SaaS solutions that are easier to adopt than custom-built solutions, easier ways to find and share contracts, and states like California that are making it easier than ever to leverage existing contracts. This convergence is helping local communities better serve their residents, save money, and leverage the work of their peers without sacrificing transparency or increasing risk.
What is Piggybacking?
Piggybacking is a form of cooperative purchasing. Piggybacking (sometimes called intra government purchasing, or reference contracts) is when a government uses an existing contract to acquire the same products or services at the same or lower price from another public entity contract. The goal: leverage the hard work of procurement from another agency if you need the same thing. There is no need to do the same work twice.
How does Piggybacking work?
The concept is straightforward. Government X has an open solicitation for Product Y. ABC Corporation wins that solicitation and signs a contract. Six months later, Government Z needs Product Y as well. They can use the bid information, contract, and pricing if ABC Corporation will agree to the contract terms and pricing.
Governments in California even advocate each other to use their contracts. For example, Alameda County published a how-to guide. And San Mateo County advocated for their local governments to use more piggybacking to improve efficiency and pricing. They recognize that on the whole, it can significantly reduce the time and resources in procurement and contracting.
Why isn’t every government agency using this to procure technology?
We’ve seen three primary reasons from our conversations with government and procurement officials: Finding the contract, scope changes, and fear!
- (1) Getting the contract and supporting materials. Even though government contracts are publicly available, they are not always easy to find or obtain the supporting solicitation and documentation. My company, Marketplace.city strives to make this part easier. We collect, host, and share all the necessary materials to piggyback or reference a contract. It eliminates the pain in finding out who has a good contract, and the details needed to use the contract.
- (2) Scope changes. Many government IT contracts were custom or had specific capital costs. Those are harder to piggyback because the scope was different for each implementation. Today’s SaaS solutions make this a moot point (more on this below).
- (3) Fear of the unknown. If an agency doesn’t have experience with piggybacking previously, they have the typical worries: am I doing this right? Do I have enough information? As more cities, counties, and districts jump on the piggyback bandwagon, there are peers to look to for advice and success stories.
So why is this great for government technology?
Standard offerings and standard pricing. This means the scope is the same. Emerging government technology solutions are not custom. They are cloud-based, shorter-term contracts, and maintenance and training are built into the cost. There may be some configuration for your government, but there is little customization. All of this opens the door to piggybacking and makes it an easier process.
There is an increasing realization between governments and their technology partners that one company cannot be the entire ecosystem. It is undesirable for most governments and difficult to scale for companies. That allows software, SaaS, and certain IoT companies to create clear, easy to understand offerings. We are leaving the era of, “Tell me your problem and I will build you a solution,” and entering one where it is, “Here is my solution if you have a problem.” And if many agencies have the same or similar problem, that is great for piggybacking.
How can I do it?
You are in luck! There is a recognition at the state level that they need to help small- and medium-sized municipalities to piggyback. California (and also other states like New York, Washington, Oregon, and more!) has created provisions to give local governments that flexibility. There is a growing recognition that contracts that have been recently competitively bid and the process has been transparent, then there is value to reusing them.
In California, a city or county can leverage any existing competitively bid contract in the state — there does not have to be specific piggybacking language in the contact. If the subsequent buying agency and the vendor agree to the same contract terms and pricing, it can qualify. Even in cases where it is outside of your state, you may be able to use existing contracts as reference contracts or those with piggybacking language.
What should I do now?
Use Piggybacking! Don’t complain about procurement; use the tools available to you.
Start by having a conversation with your mayor/city manager/legal staff/procurement to explore the possibility. They may already be using it or have a plan. I have had dozens of conversations with cities where the starting point of the meeting was, “We don’t do that,” and by the end, we landed at, “Ok, let's try it!”
Then, have a test case. If you have already identified an implementation you want to use or a vendor with set terms that fit your needs, don’t waste time and money doing an RFP that is for show — find a contract you can piggyback and demonstrate the savings in the process.
Marketplace.city can help you find applicable contracts and the documentation (and it’s free to governments). We also can point to examples where your peers have done it successfully.
And finally, be a good steward. Share your best contracts with your peers. Include piggybacking language in your solicitations and contracts. Use the process and give back.
Originally published on CityBase