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7 Reasons why Government Procurement Reform needed for Smart Cities


May 11, 2017

I attended the second annual Smart Cities Summit in Toronto yesterday, hosted by the Toronto Region Board of Trade. As described in my “storify” of tweets from the event (below), trust is emerging as a major driver for smart cities investment. Consistent with the feedback from Public Investment Management (PIM) professionals, procurement reform is seen as necessary for cities to become smart. Proven techniques used by leading technology firms like lean, design-thinking, and agile are at odds with government procurement regulations and procedures.

Seven government procurement inhibitors were described by conference participants:

  1. Risk avoidance processes mean that procurement focuses on traditional technologies and large vendors, at the detriment of new small vendors who have innovative solutions
  2. Project certainty processes that prevent experimentation like agile development, especially in an environment where innovation is associated with increased risk
  3. Intellectual Property regulations where vendors are reluctant to describe innovative solutions because government can appropriate the idea
  4. Procurement vendor regulations that makes it difficult to partner with providers
  5. General regulatory and stakeholder constraints for procurement
  6. Focus on balanced budges and government financial regulations make it difficult to leverage innovations like cloud computing in operating budgets because operating budgets are reducing
  7. Antiquated back office technology makes integrated public investment management difficult


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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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