How Government Procurement Disadvantages Small Businesses
New York City says it wants to help small businesses (including Minority & Women-Owned Business Enterprises) MWBEs thrive. First, it needs to rethink some outdated procurement policies.
Many small businesses are denied the chance to sell to the City simply because certain purchasing opportunities aren't advertised. Hundreds of opportunities for MWBEs are lost because the City does not publish RFPs that are valued lower than $100,000. And yet, small and new businesses are the ones who would benefit most from these “small purchase” opportunities to sell products or services at lower price points. In fact, they often rely on smaller jobs until they can build their capacity to deliver much bigger ones.
Why doesn’t the City expand the government marketplace and share all sales opportunities with all potential suppliers? Expanding the marketplace would also benefit agency buyers. Purchasing agents and the program staff have a better chance of finding the most qualified supplier at the most competitive price when their purchasing needs are more widely advertised (assuming that purchasing agents and program staff have a fair and rigorous method for evaluating price and quality.)
The Public Good has been a City-certified women-owned business for more than 10 years and we (and many others) can attest to the frustrating lack of transparency in purchasing opportunities. It’s time for policymakers to consider the challenges of small business owners. Does it make sense to not publish items worth more than say, $20,000? And considering the efficiency of on-line marketplaces, why not take advantage of technology?
Wouldn’t expanding the market also help City agencies? They still rely on random calls and pre-existing relationships with vendors. Does that help them find products and services of the best value? My firm often receives random solicitations for services that have no connection to the types of work that my firm does. Are these a result of erroneous algorithms and bad AI or inexperienced purchasing agents? A recent request from the Dept. of Health was looking for a contractor to provide disease control services. Three minutes on my website would tell you that we are not at all qualified. And yet the request came from a human being sending personal emails. I’d much prefer that City agencies publish their needs through the City Record Online where I can search for more business opportunities and am free to compete with other MWBEs.