During the fiscal year of 2016, Philadelphia executed over 2,100 contracts. From pencils to firetrucks to construction projects, the city spends more than $3 billion on goods and services annually.
Relying on paper has proved time-consuming, costly, and perhaps most of all, restrictive: For many years, every bid for every contract had to be opened in person, with hundreds of pages of supporting documents. A city official would then need to physically walk the contracts around to ensure they were signed by the proper parties. This dramatically limited the pool of applicants, and ultimately, the selection of businesses.
The city’s new Chief Administrative Officer, Rebecca Rhynhart, is taking action to change the problem. A former budget director, Rhynhart was appointed by Mayor Jim Kenney to rid the city of inefficiencies in spending. She is aiming to cut contract turnaround time from an average of 160 days to fewer than 90: “Our processes are cumbersome and businesses have complained, rightfully so,” she said. “It’s hard to do business with us, and we’re trying to change that.”
First to adopt DocuSign will be the Office of Information Technology, which has already been using the technology internally. The Department of Human Services will be next, followed by the Commerce Department. Rhynhart is aiming to have DocuSign implemented citywide by 2017.
Philadelphia has also recently launched their PHL Contracts System. The site will act as a hub, providing easily searchable business opportunities in one place. While the city had previously required a minimum of three paper contracts, proposals will now be submitted online. Businesses who have registered with the eProcurement hub will have the option to join in a “reverse auction.” While companies cannot see the bids of others, they will know where they rank and have the option to lower their bid.
1,400 Businesses that have already worked with the city were automatically registered, while any business who wishes to bid on a project may register.
“It’s like a reverse eBay auction,” said Christine Derenick-Lopez, first deputy chief administrative officer. By November, all new bids will go through PHL Contracts.
Currently, the average number of bids for supplies and equipment contracts under $500,000 was fewer than three. “It is like you have a 50 percent chance of getting a contract if you bid in those price points and obviously we don’t think that’s getting the best price for the city,” Derenick-Lopez said.
The City of Atlanta, which has an eProcurement system similar to Philadelphia’s already installed, told Rhynhart they receive between eight and ten bids per project. “It would be great to get 6 [bids],” she said. “It would be even greater to get eight or 10,” she said.
By receiving more bids, the city can carry out projects at a lower cost to taxpayers. In total, the city expects to save $1-2 million just from doing away with paper and implementing a digital system.
“We’re really looking at this great opportunity to move the city forward,” said Rhynhart. “We’re looking to truly change the business environment.”
Also inspired to make a change? If you’re looking to save time, increase efficiency, and cut costs for your business, you can start right here.