Using Products

What approach should Dublin City Council Beta Projects adopt when a physical item is required for a trial?procurement

The Bike Hangar Beta Project threw up a new question for us. Often an item would be too complex to make, and so the easiest option is to use a product developed by a commercial company…ie a proprietary product, a specific brand. But that can kick up a whole bunch of complication around public procurement and transparency which may actually help no-one.

So here’s some very initial thoughts, and we’d love to hear your suggestions or experiences in the comments below. As always, none of this is set in stone and it’ll evolve as it goes! This is simply a discussion piece to start a debate.

Reduce Risk

Only use the minimum amount required for your initial trial. For example to trial residents bicycle parking, 1 bike hangar is probably sufficient for an initial trial (and debate about what street space can be used for) – 5 or 10 hangars would be surplus, but would likely be perfect for a second – and expanded – iteration of the project.

This is the steps which should be considered when a physical prototype or product is needed:

  1. Borrow
    • There may be some circumstances in which borrowing an item for free – eg from another organisation or perhaps a supportive citizen – would be acceptable.
  2. Rent
  3. Make
  4. Buy
    • Consider whether a low-spec product is sufficient for the purposes of the trial. (Eg a domestic bicycle foot pump might be sufficient for a 2-4 week trial, whereas usually the Council might expect to buy a pump with a 10 year lifespan and associated cost. The domestic pump might cost €40, the commercial one something like €800. That cost would need to be weighted against length of trial, expected number of trial iterations, whether it would be useful to have a ‘DCC-owned one’ for possible future use, etc.)
    • Generally agree a return+refund policy in advance. (Eg 50% cash-back if return a product in reasonable nick.)

Examples:

What to do when a product which is no longer needed

If an item is no longer required after a trial, these steps in this order should be useful:

  1. Consider whether the item could (and importantly should) be used somewhere else.
    • Eg at a DCC office, or in a Dublin neighbourhood.
  2. Use the pre-agreed return+refund policy. (For example, we agreed a 50% refund policy with Cyclehoop for that Bike Hangar Beta Project.)
  3. Sell the item.
  4. Donate the item to a charity or ‘civic organisation’.

Ethics

  1. Pay for, rather than getting a ‘free trial’ from commercial companies.
    • To ensure that Dublin City Council never feel ‘beholden’ at any stage to any company.
  2. Be transparent about how much was paid for an item.
    • Though perhaps not initially…it would depend on whether revealing what something cost would affect people’s perception of a trial. People generally are very surprised by how much items cost – because the Council generally needs to buy high-spec, very robust, items – and these tend to have very different prices to what people have generally experienced in their daily lives. (See the above example of the €40 versus €800 bicycle foot pump…the domestic version might cost €40 per month, the commercial one €6 per month over its 10 year lifespan…even before factoring in maintenance costs to the Council or downtime for citizens.)
  3. Choices between products – eg between bicycle hangar X and bicycle hangar Y – will be based on personal ‘expert opinions’ or ‘expert hunches’.
    • Dublin City Council staff will be making that decision based on their personal opinions (which are usually then tested) as to what assumptions need to be tested and what debate Dublin needs to have…and which is the better product solely for those purposes (ie for learning). It will be based on instinct, and hopefully citizens will trust us to make that choice.
    • Sometimes…often…this may simply be “they suggested it first and we’ve been talking to them for a few months”. It’ll be as simple as that. As always, the trial doesn’t have any implications for what is done afterwards – formal and ‘standard’ process will kick in.
    • Once the debate has moved on from policy (“should people be allowed to have bike hangars on the street?”) to product (“which bike hangar would be best for Dublin?”) then perhaps a whole series of trials would be the solution (eg hangars X, Y and Z from 3 companies are all trialled in parallel and both DCC staff and citizens give their feedback…which in turn generates the brief for a public tender)…or perhaps we’ll know enough to simply go to tender if required.
  4. Public procurement rules apply (for example under €X only one written quote is required, above €Y a public tender is required, etc), but whenever required they should be stretched to the maximum in the interest of expediency. (Note we’re only talking Beta Projects here!)
    • They don’t make huge sense for Beta Projects…It would be nonsense to spend lots of DCC time tendering for something when you don’t know if it’s even a good idea for the city. A tender implies that you know what you’re asking for…so that you can ask suppliers to provide that. In trials you don’t know that. So formal tenders are really for the next stage…once something has been formalised and is being scaled.
    • It often is not in the interest of companies to spend lots of time preparing multi-party tenders…in particular for the very small amounts that Beta Projects will require (eg 1 of a particular item).
    • Dublin City Council beta runs on a shoestring of a budget and practically a skeleton crew. It’s aim is to create a better Dublin and wasted time spent on tenders will mean fewer Beta Projects being run overall. There’s a need to very much prioritise what staff time is used for.
    • When buying a very low number of an item (often 1!), any small savings gained from going out to tender (assuming you know what you’re looking for as noted above) will probably be outweighed by the cost of the staff time required to manage the tender.

As always, your thoughts or suggestions below would be fantastic!

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Dublin City Council are trying a new method called DCC Beta Projects...your input, then quick trials 'on the street', then your feedback! We'd LOVE your help!
This entry was posted in 1. Identity, Communication & Ownership, General Thoughts & Future Betas, Shane, Strategy and tagged . Bookmark the permalink.

2 Responses to Using Products

  1. I think your guiding principle should be to get the best value for the taxpayer. That doesn’t always mean the cheapest and it doesn’t necessarily mean that you should spend a lot of resources on procurement.

    Re section 1: I don’t really see a problem with a free trial, per se. It is not in and of itself unethical. Free is just another price. It isn’t the full cost of an option. As long as you don’t lock the Council in, or otherwise compromise the council, it isn’t a problem.

    Re section 2: you really have to be transparent. For one thing, a function of doing the trial might be to see if it results in any suggestions for better or less expensive suppliers of something that would solve the same problem. For another, you ‘close down’ on the price of an item, you will open yourself to all sorts of issues later on. Anyway, you are spending public money and you are just not entitled to do this. As a local authority you are also required to disclose purchases larger than a certain threshold. (I am not saying you should put up a sign with the costs, just that if someone asks, you have to tell them.)

    In practice, a lot of the cost for the council must be installation rather than purchasing an actual item. Sending a surveyor out to pinpoint a spot, sending a crew out for half-a-day to do the installation and have a project manager overseeing the whole thing must be a very large part of the cost. This should be disclosed too. (I think by the way, you are putting a lot of emphasis on ‘product’ whilst in reality, ‘service’ is where most of the cost ends up coming from, especially for small one-off projects.)

    Re section 3 point 1: I think that this is not a good way to go, and I would have my doubts as to whether as a matter of law, you could adopt this policy, at least in the format you have stated it. You have to have criteria when you spend public money, although some criteria may have a degree of subjectivity for sure. Points 2 and 3 are good, and point 2 is elaborated upon in the reference below)

    Re section 4: I would suggest you not make a purchase of a non-stock item over a hundred euros without receiving at least three costed options, or if you cannot find three options being able to show you have sought at least five options. I would say that this is generally a good rule for the public service. (Evaluating options does not necessarily entail going to tender. An ‘option’ doesn’t have to be fancy and could well be just a printout from a website price list and a calculation of shipping costs. Some of the options could be internal, like asking somebody to fabricate something.) It isn’t just to reduce the expenditure or to comply (you’re not going to end up in the ECJ over a bike rack). You do it to make sure you’ve reasonably well explored the possible solutions (as you clearly did in the case of the .

    Getting options is the best way to go, but there are also ways to validate options for value for money, if you really do have to work with one vendor (and sometimes it happens). From your own experience, for instance, you will have an idea what the input costs are to make something or fit something, and from this you can consider whether a quote or quotes represent good value.

    In this regard, you should give consideration to the suggested procedure for small purchases at section 5.1 of the procurement guidelines (http://www.environ.ie/en/Publications/LocalGovernment/ProcurementModernisation/FileDownLoad,15592,en.pdf)

    You should not go out for tender unless your project is over 50,000 euros. If the project is not that big the cost of operating the procedure will certainly be far more expensive than the economic benefit to be had from getting a slightly lower price. If you are ever going to tender, it is a big undertaking and you should try to tender for a ‘solution’ not for ‘parts’. This is a complicated principle, and I don’t think it’s altogether the DCC ‘way’ but it is essential in the context of budgetary and headcount restrictions that public bodies face. Incidentally, there is now a tender procedure called the ‘competitive dialogue’ which takes account of pathfinding and alternative solutions to the same problem. This is really for much bigger projects, but it is worth knowing about. As a taxpayer, I would suggest you avoid the famous ‘negotiated’ procedure at all costs. It is just not a good way to procure. It doesn’t have sufficient guarantees of fairness.

    It is also important to be aware of section 3.4 of the procurement guidelines in relation to pilot projects. You have to aim for these kinds of projects to open up procurement possibilities for the future, not close them down.

    Some people I work with have good public sector procurement experience and would have interesting ideas on the topic, and I’m sure they’d be happy to give some input in case it is ever helpful.

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