Read the full article on Forbes here.
While it’s not something your average American pays much attention to, government procurement is an overlooked industry that affects virtually all citizens, yet it remains largely offline. While most US consumers are accustomed to making purchases, hiring contractors, or working with a service provider in minutes or hours, this is not the case for government officials and public servants.
Until my conversation with Mariel Reed, the CEO, and co-founder of Pavilion, I was generally unaware of the difficulties faced by local government leaders in equipping public servants with the tools needed to perform their duties effectively and move important initiatives forward. We recently sat down to discuss where improvements to the system can be made and how her company Pavilion is tackling the space head-on.
Gary Drenik: Tell me about your background in government and what made you switch to technology. The two spaces are clearly quite different.
Mariel Reed: My career has been about finding ways to have a positive impact at scale. Government and technology feel like vastly different spaces, but they’re the two most important platforms for improving lives at scale, so when they come together, they can do a lot of good.
I left a career in tech to join local government because I wanted to make a greater contribution to my local community. During my time in the San Francisco Mayor’s Office, I saw an opportunity to leverage technology to shift a $2 trillion-a-year industry that affects all Americans: public procurement.
As a public servant, I obsessed about how procurement determines the speed and quality of public services. On one project, it was taking the Health and Human Services (HHS) agency over 300 days to get potential foster care parents through the application process. Our team paired a startup, Binti, which had a product for the private adoption space, with HHS to co-develop new technology that dramatically shortened the processing time, enabled social workers to work more efficiently and increased the number of applications. The match-making of public needs with private-sector solutions is the essential function of procurement. When it works well, as it did with Binti and HHS, procurement empowers public servants to work more effectively, rewards businesses for problem-solving on behalf of the public, and ultimately delivers fast, high-quality public services to taxpayers.
But procurement isn’t working as well as it should, because public servants are relying on technology that hasn’t changed since the 90s. Across the country, state and local governments have similar needs and must comply with similar regulations. Those regulations require that governments purchase from suppliers that have been qualified through competition. Governments can streamline the purchasing process by working with suppliers that have been pre-qualified by other governments through shareable contracts. Today, public servants looking for qualified suppliers must rely on email, phone calls, or visiting one-off government websites.
I started Pavilion because it shouldn’t take hours to find information about a government contract or supplier. According to a recent Prosper Insights & Analytics Survey, 54% of adults use their phones to browse through services – we think it should be just as easy for government purchases.
We help public servants instantly discover and reuse contracts that have been competitively solicited by peer public entities. By making it easy for governments to share contracts, we help governments deliver better, faster public services and reduce the costs of selling for suppliers.
Drenik: Recognizing you chose to get into tech because you saw it as a way to drive bigger change that wouldn’t be possible within the government, how do you think the government's slow pace of adopting new tech is impacting Americans in their everyday lives?
Reed: It’s not just technology — today, it’s incredibly challenging to bring new innovations to market in the public sector. One challenge is that public entities are understandably risk-averse. While “move fast, break things” works in tech, because public services affect hundreds of millions of Americans, governments must prevent those services from breaking since lives hang in the balance. But the bigger challenge is: once an innovation has been de-risked, the time it takes to scale that improvement across state and local governments is prohibitive.
Procurement is often the obstacle because slow procurement timelines delay the ability to rapidly scale out improvements across state and local governments. But there’s an opportunity to leverage procurement as the conduit to deliver better public services, faster — and that’s the opportunity we’re going after.
If we are successful, we can help strengthen everyday Americans’ relationships with the government as taxpayers, consumers of public services, public sector employees, and businesses that sell — or should be selling — to the government as a customer. As taxpayers, we’re shareholders in government. Stories of waste, or our direct experience of poor-quality public services, erode our trust in government and desire to fund public services. We are also consumers of public services. Vulnerable members of our community especially depend on public health and human services programs, which help more than 100 million Americans. When those services don’t work, or work poorly, their lives are directly impacted. In addition, over 15 percent of the workforce is directly employed by the public sector in our federal, state, and local governments and military organizations. For these individuals, government working is about being effective and safe in their jobs. And finally, Americans own and work for businesses that sell to, or should be selling to, the public sector, since at the state and local levels alone, governments spend $2 trillion purchasing goods and services each year.
We’re building Pavilion because we see an opportunity to use technology to help governments bring improvements to public services to market faster. When one public entity has de-risked something new, whether that’s a new supplier, or an entirely new category of product or service, other public entities should be able to quickly get access to that innovation. While sharing contracts provides an expedited legal mechanism to quickly purchase the new innovation, to date, dissemination of innovations has been slow. With Pavilion, public entities can better access what other public entities are doing, and adopt new solutions more quickly, while also managing compliance requirements.
Drenik: How does Pavilion specifically aim to solve this issue? Where do you fit into the larger solution? If you accomplish your mission, how should this impact everyday Americans?
Reed: According to a recent Prosper Insights & Analytics survey, 38% of U.S. adults are using their smartphones to compare vendors and prices, but it’s been impossible to do this in the public sector.
Our mission is to improve lives at scale by making government purchasing work better. In service of this mission, Pavilion helps public buyers save time and money buying from suppliers that have been pre-qualified by other public entities. We’re building the de facto marketplace for shareable contracts as their role within the public procurement space expands.
Already, $190B in transactions flows through shareable contracts—but we expect this amount to increase significantly in the years ahead. The recent infrastructure bill under President Biden will increase spending power for state and local governments. Additionally, the shift towards digital natives in leadership positions in government agencies, coupled with the impact of Covid-19, has led to increased adoption of technology and utilization of shareable contracts for procuring essential goods and services.
In other markets, technology has lowered costs, increased speed, and widened participation; our aspiration is that Pavilion will help public servants deliver better, faster public services from a wider and more diverse group of businesses. Already, we are pushing the envelope when it comes to making government procurement more accessible. Just last month, we announced a new way for public entities to bring diversity and equality to the forefront of their procurement efforts through “diversity filters." Now, public buyers don’t have to choose between the ease and speed of using a shareable contract and meeting their goals around supporting local or diverse businesses.
Drenik: Talk about how the tech specifically works – do you leverage AI or ML? What cutting-edge technical features do you have on your roadmap?
Reed: When I started Pavilion, I vastly underestimated the complexity of delivering an excellent search experience. While there is an opportunity to learn from sophisticated search technology from other sectors, we face unique challenges building a product that is purpose-built for a unique user group: public servants. We will continue to improve our product’s understanding of buyer intent, ability to display results that are tailored to the user’s compliance requirements and preferences, and capacity to make recommendations based on previous behavior and the actions of other public buyers on the platform.
Even as we deliver the most relevant, cutting-edge technology to our users, the most innovative and radical thing about our business is not the technology on its own, but rather its unique application to serving a space and set of users that is large and underserved.
Drenik: Outside of procurement, what other areas of gov-tech do you think are ripe for innovation and disruption in the next five years?
Reed: I’m excited to be building Pavilion because improving government procurement will be a force multiplier, ushering in a new wave of innovative solutions and companies focused on the public sector. Today, so many innovative companies don’t even consider selling to the public sector; if they do, their innovations take decades to scale in the market. Procurement can help public entities take smarter bets on new solutions, and a more connected public sector procurement ecosystem can help those innovations come to market much faster.
I follow two themes around the application of technology to government: how technology can improve the citizen experience, and technology that supports governments in tackling our biggest existential challenges as a country: climate change and cybersecurity.
In the next five years, we’ll see governments replace expensive, hard-to-maintain legacy systems with more applications that are purpose-built to deliver an excellent citizen experience around more specific workflows, and are much more interoperable. The gulf between the experience of consumer technology and public sector technology will shrink as public sector services will be more user-friendly, connected, and technologically sophisticated.
We’ll also see governments make greater investments in technology solutions that reduce carbon emissions; improve energy efficiency; promote renewable energy; and predict, prevent, and respond to climate-related weather and disasters.
Drenik: Thanks, Mariel, for your insights on where gov-tech is headed and why public procurement matters. I look forward to keeping an eye on how Pavilion increases the speed and efficiency of government procurement.