Buying local, inclusive and green: How Iowa’s capital, Des Moines, is living its values through better procurement
Challenge: The City of Des Moines in Iowa wanted to leverage procurement to improve equity and sustainability, but knew its current procurement processes and tools were insufficient. Their process wasn’t friendly to new vendors, leading to low levels of competition and bidder diversity, and they didn’t have good data to inform further improvements.
Open contracting approach: The city implemented an ambitious, comprehensive reform project to digitize and open up procurement, and integrate its equity and sustainability values into processes. New strategies included implementing an electronic bidding platform, piloting approaches to vendor outreach for high-priority purchases, and incorporating bonus point questions for sustainability and equity in all their requests for proposals (RFPs).
Results: About a year after the launch of the new strategies, vendor registration has tripled, with local businesses representing 21% of their suppliers, with 9% women-owned, and 6% minority-owned businesses (from 373 to 1113 registered vendors, as of 20 June). Current, closed, and awarded bids can now be found online, increasing transparency throughout the process. City employees are now able to collaborate on procurement more efficiently, and better plan and track their aspirations around equity and sustainability. There have been some notable successes, such as updating the city’s fleet to reduce its greenhouse gas emissions by up to 95%.
Open for business?
Until recently, companies trying to do business with the City of Des Moines, Iowa, faced an outdated and opaque process. The city had no central online platform for identifying tendering opportunities. There was no regular process to receive relevant news about upcoming bids, and there was no way to meet government departments to understand what they actually needed.
Pa Goldbeck, Des Moines’ Strategic Performance Manager remembers: “It used to be that people had to mail in or physically bring their request-for-proposal packets to City Hall. What a barrier that was for so many people!”
Des Moines wanted to leverage procurement to achieve broader citywide aims around equity and sustainability, support a healthy local economy, and improve internal efficiency. But its procurement practices didn’t encourage new vendors – including local companies – to participate, leading to low levels of competition. Moreover, without appropriate tools to manage its whole procurement process, the city struggled with inefficiencies and couldn’t ensure its values of equity and sustainability were actually being incorporated into specific purchases.
“When we contract with businesses that align in values, we’re able to catalyze the movement towards a more equitable and sustainable city,” said Scott Sanders, Des Moines City Manager, “We are an agency actively looking for partners who share these goals.”
“When we contract with businesses that align in values, we’re able to catalyze the movement towards a more equitable and sustainable city.”
Open contracting approach
In 2021, a team from the City Manager’s office and Division of Finance-Procurement began investigating how they might better fold equity and inclusion into Des Moines’ purchasing practices. This effort soon grew into its ambitious reform that included digitizing its processes and tools, developing new vendor outreach strategies, and prioritizing equity and sustainability measures.
The team’s efforts were bolstered by participating in Lift, OCP’s selective, 18-month-long impact accelerator program, which included hands-on mentoring, as well as technical and financial assistance. They implemented three core strategies:
- Digitizing procurement
Des Moines understood that digitizing procurement would be an important part of improving the vendor experience and increasing internal efficiency. Implementing an e-bidding procurement system was core to this effort. After considering their options, the team selected a software tool used by other public agencies in Iowa, IonWave, to ensure a more seamless experience for vendors.
The transition from paper to digital created significant benefits for the city and vendors. Departments can now do segmented, specific outreach to potential vendors based on industry, and other demographic and geographic factors. Open dashboards mean that everyone can now assess who submits bids and who is awarded contracts, as well as track and run reports using historical data. This has created a better, less complicated experience for new and recurring vendors alike, and streamlined processes for vendors and staff.
Where previously bidding information was sent as PDF ‘packets’ to vendors whose contact information was stored in different Excel sheets, the new digital process has increased efficiency and opportunity for new vendors.
“It was challenging to track what we were doing and who we were working with. It required much manual work to be able to pull any of those numbers. Now that we’ve transitioned to online, we can pull our vendor lists and see what percentage of our registered vendors are women-owned, minority-owned, or whatever the status might be,” says Ms. Goldbeck.
For example, the city fleet was able to streamline and standardize their purchasing process.
The department’s first round of applications through IonWave doubled the bidding pool, increasing from two to four bids.
The city built on this success by passing an ordinance change in January 2023 to increase internal efficiency by allowing for the use of online bidding, removing a requirement for in-person bid openings, as well as granting procurement staff more authority to issue contracts without city council approval.
- Targeted vendor outreach
The Des Moines team knew that increasing vendor participation would require doing more to reach vendors where they are. As part of these efforts, the team implemented new targeted outreach strategies, creating opportunities to respond to vendors and answer their questions, as well as a big push to get more vendors, especially with minority-owned and smaller businesses, registered with the city.
In November 2022 Des Moines sponsored a vendor fair “Creating Opportunities: Agency Outreach to Minority and Small Businesses”. With over 75 people participating, it was also a first for multiple agencies working together, including agencies such as the Airport Authority, the Area Regional Transit Authority (DART), the Iowa Department of Transportation and Economic Development Authority, the Small Business Administration, and the Center for Industrial Research and Service (CIRAS). The fair allowed businesses to network and develop relationships with local government agencies and other businesses in the government contracting space. The feedback was positive and created momentum for organizations to continue to work together and plan for additional vendor fairs in the future.
“We want to make a concerted effort to collaborate and help smaller companies, disadvantaged companies, minority companies, or whomever, become more aware and understand that doing business with the city should not be an overwhelming task,” commented Tom Vlach, Deputy City Engineer. “There might be some requirements that businesses need to go through, but we’re here to help them.”
The team also tested new vendor outreach and market research strategies for an ambitious city-wide effort to repair and rehabilitate local houses and neighborhoods through their new Improving Our Neighborhoods (ION) initiative. The city had struggled with vendor diversity for similar categories of work in the past. This time, the team wanted to increase the number of bids, particularly from new vendors, local companies, and from companies that prioritize sustainability and equity. Together with Qwally, a software developer that simplifies government procurement processes, the city conducted market research and developed materials to promote this opportunity, such as a script and social media content for staff, and an ION Contractor Vendor Guide with clear step-by-step guidance for vendors. During their efforts, the city reached out to 500 potential vendors, half of which were new to the city.
The team’s efforts made a big difference: 32 new vendors registered in IonWave, and 20 companies attended pre-bid meetings. In comparison, according to the neighborhood services director, just five companies would attend similar pre-bid meetings in the past. This ultimately led to 16 bids, with each category of work receiving three bids. Moreover, of the 16 bidders, 82% were based in Des Moines, and 94% were local to Iowa. Each of the 16 bidders received a contract for a total of $105,000.
- Prioritizing equity and sustainability
Des Moines’ efforts to improve processes and vendor participation in procurement benefited the city’s wider equity and sustainability goals, too. For example, the city’s fleet manager Brian Bennett credited these reforms with helping the city be more strategic and cast a wider net with vendors, enabling the city to successfully purchase its electric vehicle fleet and B100 renewable fuel for all its diesel trucks. In total, the city estimates that this change will allow the city to reduce the fleet’s greenhouse gas emissions by 95%.
Des Moines also built equity and sustainability into their RFP process. Initially, the city piloted a bonus sustainability and equity question in all RFP documents, each worth one point. Based on this successful pilot, the city then increased the number of points for this question, and implemented a 10% (out of 100) minimum scoring for sustainability and equity as well as a bank of sample equity and sustainability questions to support procurement officers when they put together bid documents.
Emerging systemic results
Des Moines’ efforts have helped improve the procurement experience for vendors and city staff, resulting in higher vendor registration and participation, and better internal collaboration and efficiency.
About a year after the launch of the new tools, vendor registration has tripled (from 373 to 1113 registered vendors, as of 20 June), with 24% of suppliers being local, 11% women-owned, and 7% minority-owned. Now current, closed, and awarded bids can be looked up online, increasing transparency throughout the process.
The reforms also helped increase ownership of procurement by different city departments. Previously, the communications department was less involved in vendor outreach, but now vendor outreach is part of the city’s wider communications strategy. City buyers now also meet regularly with departments to discuss upcoming solicitations.
“OCP helped us to see the bigger picture, expanding where we do business and widened our geographic reach. We are receiving more bids and departments are strategizing differently, assessing what can be done,” says Bennett.
What’s next
The Des Moines team is eager to take its efforts with procurement reform to the next level and continue pushing for transformative change to benefit the city and its residents.
Manisha Paudel, Des Moines’ Chief Equity Officer, highlights that “at a time when we’ve continued to be comfortable with the way we’ve always done things, OCP identified areas of improvement. We’re doing things better now, and the improvement is not just to make things easier for our vendors, and for our community, but it’s also making things easier for us as an organization.”
Looking ahead, the city is eager to apply the principles and resources from their market research and outreach pilot project to new projects, such as the RFP to revamp their city plans, PlanDSM, a vision for Des Moines development up to 2040. The team aims to set up contract document templates for buyers with pre-vetted language from the central procurement office in IonWave, as well as expand their use of data by sharing forecasting information on future city purchases. The city also plans to use information from their sustainability and equity question bank to help inform city plans and city purchases.
Des Moines bought its first electric garbage truck. The city’s 35 trash trucks are less than 4% of its vehicle fleet but consume about half of its annual diesel usage. Screenshot via a City of Des Moines video.
Public procurement can be a powerful lever for achieving broader aims like equity and sustainability. Ms. Goldbeck summarizes the potential for this city to lead by example and work with businesses that have the same values:
“We want to send a signaling message that these values are important, and also hopefully influence those businesses to think about how to green their supply chain, or create opportunities for historically marginalized communities. We want to build and influence these practices through our own contracting power.”
