Making the procurement process startup friendly

Complexities in the government procurement process can make it difficult for startups to work with governments, but a new program is working to change that.

Kate Cornick

CivVic Labs is led by LaunchVic in partnership with the Victorian Government’s Public Sector Innovation Fund. It was established to provide startups with access to government procurement opportunities.

LaunchVic helps develop the startup side of the program while the Department of Premier and Cabinet disseminates the program and products through the public service.

It effectively means that startups don’t need to go through the procurement process because the government is contracted with LaunchVic.

Launch Vic CEO Dr Kate Cornick says governments often don’t work with startups because of the risks involved.

“There’s a real opportunity for governments to support startups by procuring from them,” she told Government News.

“But rarely do startups have that opportunity because they don’t have the financial trading history, and they’re inherently high risk for government.”

Some of these risks include not having a proven track record, having little to no revenue and not enough capital.

“The startup environment is inherently high risk, but at the same time it’s also very high reward,” Dr Cornick said.

“And what we see is startups like Uber and Facebook, all of which we know and love and use every single day, are companies that have grown to create enormous economic benefit for the communities in which they operate.”

The CivVic Labs program begins once a challenge has been defined by a government department and startup companies have been selected.

Products are tested during a pre-accelerator stage and, if viable, they are developed in an accelerator program that provides participants with mentoring, office space and information sessions, with a graduation taking place at the conclusion of the program.

Startups can be awarded a contract of up to $150,000 upon graduation to further develop and deliver the product.

“CivVic Labs provided us with a very clear and good understanding of how government works, how it procures services, and the ways it engages with data or new technology to adopt into their systems.”

Bringing startup culture into the public sector

Startups can provide governments with cutting edge technology at a low cost, Dr Cornick says. Working with them also allows startup thinking to permeate into public sector thinking.

Benefits for start ups include gaining a better understanding of the procurement process, and the kudos of having a prestigious customer.

“Having a customer like the Victorian government as one of your earlier customers provides huge validation to that start up to then go and sell to other states and other governments around the world,” Dr Cornick says.

“But at the same time,you’re supporting that startup to create local jobs.”

Public servants also benefit, Dr Cornick says.

“We were expecting the benefits to be very heavily weighted towards the startups but in fact it’s been very clear that this program has got a very strong professional development element for public servants,” she said.

“And I think that’s really exciting that we’re supporting our public servants who do incredible work and work incredibly hard and are often the cutting edge of really big societal problems.”

Better understanding of Victoria’s public transport

Envision Systems is one of three graduates of the inaugural program, and currently in contract negotiations with the Department of Transport.

Kanav Batra

The challenge put forth by the department was to gain a better understanding of the utilisation of Victoria’s public transport.

Envision Systems developed a sensor to measure patronage and wait times. It uses a combination of artificial intelligence and the internet of things to record information such as the length of time passengers wait on a platform before a train arrives.

Kanav Batra, founder of Envision Systems, said CivVic Labs is a “phenomenal” program.

“CivVic Labs provided us with a very clear and good understanding of how government works, how it procures services, and the ways it engages with data or new technology to adopt into their systems,” he told Government News.

The program provided his team with constant support through weekly catch-ups, one-on-ones and meetings with the government to share their progress and learn about government procedures.

“It was really well structured. We had that ongoing support and ongoing tracking and measurability to measure our progress week by week and address blockers if there were any,” he said.

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One thought on “Making the procurement process startup friendly

  1. Well done Launch Vic!

    As a startup founder and consultant to many government organisations I couldn’t agree more. Traditional procurement virtually excludes startups from government contracts, and in the process many opportunities for radical improvements get missed. This is a great initiative to overcome these hurdles.

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