Storefront of a local business in Los Angeles. Credit: KCET Departures.

A 2019 study reported the City of Los Angeles as one of the top 25 most diverse cities in the United States. A  city of entrepreneurial spirit, Los Angeles is home to a dynamic business community, the strength of which rests on the many women-, minority-, and veteran-owned businesses working in everything from construction to leadership development.

Soon, the City of Los Angeles will host the 2028 Olympic Games, an event that attracts hundreds of thousands of spectators from around the world and requires the investments of millions of dollars into infrastructure. In a city that already spends billions of dollars on public contracts every year, the government of Los Angeles will hire contractors for a tremendous amount of infrastructure work ahead of the Olympics. With this important economic opportunity on the horizon, the City of Los Angeles saw an opportunity to empower the local community by working to ensure smaller, local, and underrepresented businesses had the tools to compete for contracts.

The City had previously expressed a clear priority to do more business with small, local, and underrepresented businesses. But an early hurdle of the work was the lack of complete data on City vendors. Recognizing the importance of understanding how vendors navigate through the City’s contracting system compelled the City to partner with the Sunlight Foundation and Open Contracting Partnership (OCP). In collaboration, the team sought to understand and improve how underrepresented businesses compete for contracting opportunities.

“We haven’t been able to engage with the City in dialogue – we want to do business but we don’t know how to navigate the landscape.”

Sunlight and OCP interviewed  a number of City residents to gather community input on the City’s current and forthcoming procurement reforms and open data work. Small businesses expressed an excitement and desire to work with the City, but felt unable to compete with the larger vendors with preexisting relationships in government. Some businesses interested in participating as subcontractors found it difficult to connect with prime partners. As the owner of a small business explained, “We haven’t been able to engage with the City in dialogue – we want to do business but we don’t know how to navigate the City landscape.”

After the City was apprised of this feedback, they met with Sunlight and OCP to workshop a solution. Early on, project teams acknowledged that although the City could take first steps to share data on business inclusion, addressing structural inefficiencies in City procurement was a more urgent need to reduce barriers to entry for disadvantaged vendors. Recognizing the clear desire from small and local vendors to fairly compete for bids, the City took Sunlight and OCP’s joint recommendation to pursue two projects to improve the environment for underrepresented vendors looking to do business with the City:

• Centralize procurement data. The City has a good amount of quality procurement data vendors would find useful, but it’s spread out across departments with very few linkages that would allow internal decision-makers to analyze performance or trends. The City will explore internal performance dashboards to help individual departments track their procurement and inclusion performance. A more centralized data system built on this prototype could minimize the reporting burden for internal City departments, allow for valuable contracting data to be created and shared across silos, and allow for the publication of public performance data on City procurement. 
• Using data to track business inclusion. Vendors are not tracked uniformly across the City’s procurement data systems, but data on vendor roles emerged as a significant data point through conversations with local vendors. They noted that most opportunities to work with the City are too large for their business, and that they often pursue subcontracts in addition to appropriately sized prime contracts. However, the City doesn’t collect any digital data on subcontractor relationships. Re-structuring data systems to collect newly digitized data on subcontracting will allow City decision-makers to have a previously hidden view of how the City’s certified vendors are winning business from City contracts when they aren’t large enough to win prime contracts. 

Both of these solutions will lead to more open, equitable, and accessible contracting practice. The City will need to undertake significant data governance reforms before it is able to tackle business inclusion more directly and share quality data in line with the Open Contracting Data Standard. We’ve ensured that these reforms have clear paths toward more transparent and accessible advertisement of opportunities to begin working with the City and better open data to track business inclusion in the long-run.

 “We know that having consistent, quality open data is an important part of ensuring that all businesses can compete for City contracts touchstone of inclusive procurement. The City of Los Angeles is dedicated to improving our data collection and governance to ensure underrepresented businesses have the information they need to compete for contracts.”

These preliminary pilots will help the City of Los Angeles build a procurement practice that ensures that local and underrepresented businesses are given a fair shot at competing for contracts with the City. Over the long-term, the City will continue to explore opportunities to prioritize local, and women-, minority-, and veteran-owned business inclusion in their procurement practices, sharing the wealth with businesses reflective of the Los Angeles community. “We know that having consistent, quality open data is an important part of ensuring that all businesses can compete for City contracts touchstone of inclusive procurement.” said Miguel Sangalang, Deputy Mayor for Budget and Innovation, “The City of Los Angeles is dedicated to improving our data collection and governance to ensure underrepresented businesses have the information they need to compete for contracts.”

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