Supply Side
Public Spend Forum Podcast – The Mystery of the $1 Contract

We told you recently about our relaunch as Public Spend Forum Europe and our relationship with the PSF organisation in the US.

Our colleagues there have started a new series of procurement podcasts. That’s something we have considered doing here, and may well do in time. And of course our friend Pedro Telles of Swansea University has his own excellent series of public procurement podcasts which we have featured here extensively (and there are more to come).

The first of the US series is available below. It’s around 20 minutes long, very professionally put together, and features Public Spend Forum’s Director of Learning & Content Development Frank McNally interviewing Dave Zvenyach, the acquisition management director at the General Services Administration’s (GSA) digital services division, 18F.  Zvenyach is an interesting character, being a lawyer by training, a qualified software developed and now an acquisition expert.

The GSA is a central procurement body that puts in place frameworks and contracts for wider use around a wide range of US government organisations, and 18F has the goal to help “federal agencies build, buy, and share efficient and easy-to-use digital service”. (There is a parallel here to the Government Digital Service in the UK).

So, you may say, what interest might there be in this interview for public procurement people in Europe? Well, the greater part of the discussion is taken up looking at a recent initiative that could easily have a read-across to other countries that might want to try out the idea. Dave talks about the 18F approach to innovation, the need to be unafraid of failure as you try new things, but the idea that got us most interested is the (in)famous “$1 procurement” that got the US government exactly what it needed, while raising eyebrows around the country.

18F is looking to move away from the traditional model of buying huge software projects from huge suppliers, and has introduced their “micro-purchase” programme.  So projects of less than $3500 can now be sourced with payment via a purchasing card, and opportunities are put out to the market with an invitation for anyone to respond via an auction type process.

The controversy came when Brendan Sudol*, a software engineer at a start-up, bid just $1 to perform a particular piece of software development work. Other providers cried foul, but the contract award went ahead, and the software was developed successfully and met the requirement. The developer himself explained why he was prepared to do the work for nothing – “I figured it would be cool to be a part of this first micro-purchase experiment and demonstrate that there are people — at least one but I think a lot more — willing and excited to help out on meaningful, civic-minded initiatives”. Whilst it is not a model that could or should be used for most public sector opportunities, it certainly makes you think.

What it certainly demonstrates is the power of opening up contract opportunities to a wider potential supply market, including small firms, start-ups and so on. In the podcast, Zvenyach also says that buying software should be “joyful, easy and fun” and then makes the comparison that it should be “like shopping”. We have real problems with this to be honest – organisational buying is NOT the same as shopping for your own purposes! However, we will forgive Zvenyach this small indiscretion, as the rest of his thinking is very interesting. You can hear the whole podcast here, and look out for more from Public Spend Forum soon.

* Our googling in preparing this article came across this, which suggests that Sudol now works for 18F – so his investment in doing the work had another benefit!