The gap between administration and startups has already been bridged. Its called GovTech

Acquiring innovative solutions in rigid public procurement procedures sounds like a contradiction. The GovTech Poland programme uses the Act to enable start-ups to solve administrative problems. Instead of lengthy public procurement documentation, the key is a competition whose only criterion is the quality of the prototype. We talk about the GovTech Poland programme with its director, Justyna Orłowska.

What is the GovTech programme?

We do not form a programme that comes with a bag of money, but we teach administration how to use the tools it has. We use the so-called competition mode, a kind of flexible public procurement, to create unique technological solutions responding to the needs of the administration. GovTech can be seen as an attempt to integrate start-up agility into public procurement.

It sounds good, but won’t you become just another bureaucratic institution?

We are actually a consulting team, a bridge between the administration and start-ups, small and medium enterprises, or anyone who has an idea how to improve operation of the public sector. First of all, we provide support for the administration so that it is not afraid to use the competition mode and to use it successfully. We want to use public money for procurement in an effective way. Also in such a way that Polish small and medium-sized enterprises can benefit from them. Let us remember that EU money will run out one day, so the 200 billion zlotys that go to public procurement every year can act as a large venture capital fund for domestic companies and start-ups. Of course provided we can use it in this manner, but GovTech shows that it is achievable.

I have a feeling that your uniqueness will become clearer if we go through the competition process step by step. Where do you start?

The first step is for the administration to report the needs it wants to be met.

So the administration describes its problem?

Yes, exactly. Then we verify the application. Not all orders and problems qualify for our mode of work. We want the challenges posed by GovTech to have a creative element. Sometimes requests can be completed easily, with the use of existing tools. Then we simply inform them that they will find a ready-made solution in a given programme or system.

So you’re a kind of consulting company for technology issues and Google usage.

No, we do not answer questions on how to use Google. Let’s not insult the officials! However, we do help in the circulation of information on existing and sometimes even available solutions in administration.

You look for applications where the problem is unique and there are no ready-made solutions?

Yes, we are looking for problems that need tailor-made solutions. So if any institution has a problem to which the answer is a solution available on the market, we advise them to organize a public procurement.

And so there’s a specific issue. What are the next steps?

If we say that it is worth a try, we direct the challenge to be verified on the market, even before we announce a competition. In other words, the business also verifies whether a given problem is suitable for GovTech. In order to be really agile, you need to focus on consultation and dialogue from the start. That is why we organize so-called technical dialogues, you can see them announced on our website – competitions.govtech.gov.pl.

What’s the purpose of dialogue with business?

Dialogue serves to verify what a start-up can do within the amount of about PLN 600 thousand and whether there are any creative elements in the order at all. Finally, to assess whether we can identify clear criteria on the basis of which companies can compete.

The financial limitation results from the information from the start-ups themselves, with which we consulted as early as July and August 2018. We were told at the time: „Look, these orders must be small. We’re starting out, we’re not gonna take on a million-dollar job. It would be too complicated, we don’t have enough people. We don’t want to devote ourselves to just one customer, that’s too much of a risk.

Besides, we are limited by the Polish and EU law. That is why we limit ourselves to a national public procurement, that is to say, to EUR 144 000 or around EUR 600 000. This amount is sufficient to carry out interesting solutions.

Why did you want to conduct competitions in accordance with the procedure provided for in the Act on Public Procurement?

Because the administration is accustomed to the fact that if something is done according to the law, it is to be taken seriously. Then it’s not just 'some competition’. It can’t be neglected or ignored. The law obliges you to fulfil your dutiesand meet deadlines. On the other hand, acting according to the law gives the participants a number of guarantees, e.g. equal treatment.

To choose a winner, you need measurable, qualitative differences. What are your criteria?

This is an interesting topic. After all, the entire start-up industry is based on presentations, the so-called pitches. The companies and programmers told us directly that they do not want it at all. They want to focus on creating a solution, tackling the problem, proving in practice that they can find a solution and not on polishing a beautiful presentation. Therefore, our criteria are based on the effectiveness of the solutions. For example, if you are building an image recognition system, you will be judged by the percentage of correctly recognized cases.

Let’s move on. What happens after the technical dialogue?

After the dialogue, we recommend some of the projects to be carried out under a regular public procurement procedure, for example. Some of the orders in their final stages are handled internally by the administration.

What remains on the agenda is a group of problems that have a creative element, that fit into the order up to PLN 600 thousand and, of course, which can make use of modern technologies.

Can you give us an example of a potential project you rejected?

We had a challenging project that was about sound recognition. When you call 112, you are connected to the dispatcher after a maximum of 12 seconds. The challenge was to make the most urgent phones connect faster, since sometimes a few seconds matter. For example, if you hear shots in the background, you can give your call a higher priority and immediately refer it to the appropriate service instead of calling the dispatcher. After the dialogue we found that the benefit of these few seconds is too high a risk in the case of misclassification. We decided that this was too much responsibility.

Too much responsibility that would be transferred to an automated system that can potentially determine human life?

Exactly. That’s why we quit. On the other hand, looking at the challenges that we have taken up, I can mention the one in which the National Treasury Administration turned to us with an idea to automate the analysis of the image from X-ray scanners at the borders of our country, which scan several hundred million vehicles and containers annually. They came forward rather hesitatingly, saying that such systems on the market would cost at least a dozen or so million zlotys. In technical dialogue, we posed a different question for the market: how much can we achieve with a limit of EUR 140 000?

It turned out that a pilot implementation could be done in one location in Poland, which would be the basis for doing so in the whole of Poland. Today, a Polish start-up is implementing this solution in a new terminal in the port of Gdańsk. I am especially glad that start-ups take part in competitions and win, even with big companies. They win because we have minimized bureaucracy and evaluate them using simple indicators. There is no need for large legal departments within the company to analyze dozens of pages of public procurement documentation. It’s enough to just enter the competition and submit an idea for a solution or create a prototype.

Yeah, let’s get to the competition itself. What is it like?

That depends on the challenge. There are almost always two stages. The first stage is used to verify the ideas presented by start-ups. They can present a very preliminary prototype of the solution or simply a presentation of the method of approaching the problem. We want this stage to take about 24 hours of work for the applicants, not more.

After the first stage you have a short list?

We select five finalists. They get a small cash prize after the first stage. The aim of the second stage is to create a working prototype, in the language of the technology called minimum viable product. The second stage begins with workshops, i.e. a conversation with the administration. That’s not typical for public procurement procedures either.

In the fashionable way of managing innovation or start-ups – the lean methodology – it is essential to keep in touch with the future user, collect feedback, as well as quickly and frequently improve one’s prototype. Is this a step in that direction?

Yes, but of course companies don’t talk to the people who have to evaluate the projects afterwards. At this stage, the five participants in the second stage have the opportunity to simply ask and specify the information they lacked in the first stage.

We are, of course, applying the principle of equality, of equal chances in competition, which means that everyone receives the same response. However, if one company asks the officials about something, then all the participants of the competition receive an e-mail response in the form of a summary. The dialogue also serves the purpose of not favouring any company, regardless of experience in working with administration or facilities.

The winner of the second stage gets the money and starts working with the administration at the same time? They fine-tune it so that it works?

Yes, the winner starts to implement their solution. Although there are small prizes for the first stage, and in the second stage we recommend the institutions to reimburse the participants, the main prize is the contract for implementation.

For a long time your website contained information in the language characteristic of the software industry, so to speak… That you’re in beta phase. You’ve already done the pilots. What are their results?

The interest of companies has certainly exceeded my expectations. On average, about 50 participants take part in our competitions. For the sake of comparison, as many as 43% of traditional purchase procedures are reported by a maximum of one entity, and on average it seems to be about 2.2 entities per contract.

We also verified our assumptions in discussions with the market. We dreamed of making an equivalent of a start-up accelerator, with all those presentations and pitches, while the market needed something else. It’s great that we’ve managed to understand that attitude.

You mentioned that the mode you use had been in the Public Procurement Law since 2004, but few have decided to use it. Are there still concerns on the side of the administration?

Everyone has their own internal procedures for this competition and we must do away with some of the myths. We have to educate all the time. This, in turn, confirms our conviction that an institution such as ours is needed. Helping to cope with the requirements of the law, collecting the necessary information about organizing such orders in one place.

Do you harmonize rules of conduct between different administrative units?

Yes, and this harmonisation helps to increase the participation of SMEs in public procurement. Companies, as well as individuals, can take part in our competitions. You just need to confirm that you’re not a criminal. A harmonized way makes it easier to take part in competitions.

Is it so that you have to persuade the administration to decide on this path or do you receive a lot of applications that you are not able to process?

In February we completed another 'recruitment’ of ideas. We received more than 60 applications, out of which about half qualified for further proceedings. It will probably end up in a dozen or so competitions. This is more than we expected to achieve in this stage. We assumed that we would carry out twice as many competitions as the first time, around ten.

Isn’t it still a very small scale?

It is, but it should be remembered that it’s a pilot activity, so to speak. All the time we work only with our team. However, we are already talking about cooperation with other entities. We join forces with the PARP or government agencies, which also have the resources to actually serve the wide range of needs of administration.

What did you discover to be the greatest barriers to scaling, increasing the number of competitions after piloting?

Persons in our team who advise on the creation of competitions must have a very good knowledge of the administration. They need to knowdifferent barriers and responsibilities. This is public money. We need to address only actual, resolvable needs. If we mess something up, we’ll end up on the front page of the newspapers, and in a rather negative context.

It’s difficult to build such knowledge and skills that would result in a growing trust from the administration. It is also difficult to quickly scale the process in this case. We’re not gonna hire dozens of people all of a sudden. That’s why we create the right IT tools, but it takes time.

Do you find it difficult to live with – let’s say – mental barriers of the officials or the internal rules of the institution? 

As usual, the most important thing is whether someone from a given department actually cares. Then we learn about barriers faster, we overcome them together, the process runs fast. If someone doesn’t care, the process is at a standstill. However, this is the case everywhere and with everything, I think it is not unusual. I think that a real corporation (I used to work in a large company) is no different from an administrative unit. Such complexities are common to large organisations and complex structures.

We try to find innovators in public administration and help them. I like the term used by our associates in Scotland: intrapreneur, which is an internal innovator in a company or, in our case, an institution. There are many such people in our administration. Thanks to GovTech, they are able to operate.

In addition to hackathons and competitions, you have now launched public debate workshops. Meetings were held concerning the railway, the next one will concern the water problems.

We have to solve the challenges of state importance in a systemic way, although I may sound conceited. How do we plan what needs to be changed? Perhaps the issue of water problems requires legislative changes, perhaps educational programmes, or perhaps someone else has another original idea that is worth finding out about.

What was the result of the first meeting in the series, the one concerning the railway? 

The idea of sending text notifications of delays and alternative connections to passengers won the competition. After all, competitive bus lines in Poland are already doing it. The railway has promised to implement such a system.

Let’s sum up. The meaning of your activity is the search for a non-standard, better method of creating and implementing technologies in the administration.

GovTech is primarily an innovation of the administration itself. What do we want to achieve? An efficient state with an efficient administration gives, in effect, satisfied citizens. We are simply looking for tools that will help us to achieve this goal. We want the administration not to be afraid of citizens or smaller companies and to use cooperation with them more often.

The quality of an idea does not necessarily go hand in hand with the ability to get your foot in the door, so to speak.

Yes, exactly. The KPRM building may be a deterrent, it is not easy to get inside, and so GovTech is a bridge between talents and administration.

Thanks to our programme, both parties also feel safe. One does not spend too much money and slowly builds trust for its start-up. The second, in turn, breaks the stereotypes about administration. Companies see that this is the administration that you can talk to, cooperate with, and ultimately make money. They have also understood some of the constraints faced by the administration.

You are in a close partnership with your counterparts in other countries, especially in Europe. How do your efforts compare to theirs?

They particularly praise us for the fact that we are doing this within the framework imposed by the relevant public procurement law. We are unique in this and it brings positive results. Everyone complains that such competitions very often do not result in implementation in other countries. Our process includes a public promise. This is a commitment for both parties.

The British think-tank technology Public.io has published a report titled „Buying into the Future” on the process of gaining innovation through public procurement. In it, our programme is quoted as a positive case study, especially appreciated for the technical consultancy mode. They wrote that our programme is a great step in the development of govtech and it should inspire the British Government. I know that this is not yet talked about in Poland, but Poland is becoming an example in this sector.

From the editorial office: the interview was conducted before the announcement of the next call for competitions for the GovTech program, which started on September 12, 2019 and will last until October 28, 2019.

Polish version is available here.