Challenge-Based Procurement ‘Just Makes Sense,’ Solution Providers Say

The method gives solution providers a chance show creative deployments in their proposals and can provide the government with more than one way to solve a problem, Marlon Paulo, executive vice president of professional services at City Innovate, says in a panel discussion at XChange March 2023.


Rather than asking a solution provider for a specific technology to fix a problem, in challenge-based procurement the state describes the problem and then asks technologists for several ways to fix it.

“We shift the discussion,” Marlon Paulo, executive vice president of professional services at City Innovate, said Monday during a breakout panel at XChange March 2023, being held in Orlando, Fla., and hosted by CRN parent The Channel Company.

“‘We have a problem. I need a community to address it to help me solve it,” Paulo said.

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City Innovate is a private company that pushes for faster adoption of technology by state, county and city agencies by promoting challenge-based procurements.

Paulo spearheaded the inititative as the chief technology procurement officer for the state of California from 2017 to 2021, an initiative he adapted from U.S. Department of Defense methods. The system is growing among state and local government buyers, he said.

The method gives solution providers a chance show creative deployments in their proposal, and it can give the government more than one way to solve a problem, Paulo said. Critically, during the proposal, there is a proof-of-concept period during which the state can sandbox an idea to see if it works.

Harvey Green III, president and CEO of XenTegra Gov, a solution provider based in Charlotte, N.C., said his company sees more and larger opportunities in government headed toward this type of proposal.

“The fact that he has done it before, the fact that he’s done it at the state level and at the city level—he knows what he’s talking about,” Green said of Paulo. “Also, California is always on the front end of these things. It’s going to go to other states. It was good to see what we need to do in order to prepare ourselves to take on a lot of those. We don’t see a lot today, but we are very much trying to get into bigger and bigger opportunities.”

Paulo highlighted examples of what the process looks like in the real world, using the emergency call dispatch in San Francisco as an example. Paulo said rather than tell solution providers what they needed and how to install it and where, the state challenged technologists to create a solution that could identify the language a caller was speaking and route the call to a translator in 30 seconds.

“A lot of innovators came out of the woodwork to say, ‘We can do better.’ Think about how efficient that is,” said Paulo.

Charles Goldberg, partner with Data Safe Group, a solution provider based Rockaway, N.J., said this will likely become the preferred standard of governments to buy technology.

“It just makes sense to have people prove what they are going to deliver,” he said. ‘It seemed from what he was saying they want to speed up the time frame from when we need this to when it’s actually time for adoption. Now they’re relying on the market to tell them, ‘Here is your problem. This is how we’re going to solve it for you.’ It’s giving them more options for things they have not seen before.”