How a new bus could help Boston’s transit system

(This post was written as an assignment for MLD671M, a course at the Harvard Kennedy School of Government)

When asked for his theory of change, the Chief Technology Officer of the MBTA responded first with ‘go big’. Since taking over customer-facing tech at Boston’s transit agency, David Block-Shachter has certainly done that. Late last year, a $723 million RFP was awarded for the design and operation of a new fare collection system, making use of mobile phone and contactless card payments.

David emphasised that key to the success of a contract this size was tight and intelligence performance measures. When it comes to hardware, the contract sets out that responsibility lies on the vendor to ensure that fare collection is possible with whichever tech is popularly used at the time. This future-proofs the system in case of the decline of smartphones, ensuring that the city doesn’t introduce technology that quickly becomes defunct.

The ‘go big’ approach is clearly intended to drive improvements in an organisation with an enormous budget (operating revenue was $1.8 billion in 2016) and very long time horizons. Given the challenges of making incremental changes in these environments, it’s understandable to try and deliver symbolic projects at scale. David and his team have combined ‘go big’ with two other theories of change — ‘just fix it’ which uses a centralised team of experts to quickly address software problems that emerge without going through lengthy authorising procedures, and ‘extend-and-embrace’ which uses a group of internal consultants to identify and work through broader organisational challenges with a technology mindset.

One of the challenges of the ‘go big’ approach to procurement is that it can crowd out smaller, innovative providers. It’s true that no bedroom start-up could fully deliver a new electronic fare system for a major city, but there may well be elements (design, UX etc.) where they could add value. In order to harness benefits of smaller providers, whilst getting the organisational benefits of putting a stake in the ground with large contracts, MBTA could learn from San Francisco’s RFP Bus.

In SF, they made their procurement process more start-up friendly by grouping 17 different contracts into a single RFP Bus — an online document with 30 challenge statements. Individual providers could then look at the Bus and respond to whichever challenge statement they felt they had an innovative solution for. This saved time and money for the government, by greatly simplifying the work they needed to do to administer the RFP, and ensured smaller vendors could identify specific challenges that they had the tool to address. The innovation was developed by the city’s ‘startup in residence’ program, and has since been adopted by a number of other cities looking to leverage the impact of scale while harnessing the creativity of smaller vendors.

This approach can be more challenging if the item being procured is a service instead of a product. Where there needs to be ongoing delivery, it can be difficult to coordinate the activity of fragmented providers who are responsible for different aspects of a single public-facing service. But there are clear opportunities for MBTA to consider this approach in procuring public-facing tech solutions.

It may well be that there are specific accessibility issues with the new electronic fare system that a single large provider is not well placed to design solutions for. Here, smaller firms that specialise in this type of software could identify a way to apply their expertise, and bid to address that challenge statement. Further, the fact that solicitations are grouped means that vendors can see challenge statements for parallel problems and share the RFP Bus with other companies and entrepreneurs that they have worked with previously. This wide dissemination again increases the likelihood of procuring innovative solutions.

Whilst this approach may require further work by government purchasers to ensure challenge statements are both individually tight and collectively cohesive, this discipline could pay off by identifying the optimal solution for each aspect of the problem. When it comes to modernising the T, there are benefits to going big, but not if it crowds out the kind of innovation that can only start small.