California Center for Innovative Transportation
Authors: Ikhlaq Sidhu, J.D. Margulici, David Jacobowitz, Carleton Wong, Rosemary DiPietrantonio

Existing procurement rules for the State of California are designed to use a fair, competitive bidding process to acquire the lowest priced goods and services. While this process is effective to purchase commodities or hire contractor for well‐defined jobs, it poses some challenges when an agency is attempting to obtain very innovative products. Almost by definition, innovative solutions are typically carried to market by a single firm, which may prevent further entries with intellectual property (IP) protection. In this situation, unless the innovation brings down the cost of an existing product, agencies may not be able to obtain multiple bids in a way that favors the innovator. Further, new product types may impose that specifications be written to facilitate procurement, a stretch of resources for public agencies.

With sponsorship from the California Department of Transportation (Caltrans), the California Center for Innovative Transportation (CCIT) and the Center for Entrepreneurship and Technology (CET), both at the University of California, Berkeley, investigated those challenges through selected case studies, and formulated recommendations accordingly. Those recommendations are divided into three categories. The first group can be implemented at the process level by Caltrans practitioners and research and development (R&D) project managers. The second set of recommendations addresses organizational challenges that may require coordination across multiple functional units. The third category is more speculative. It suggests changes that could be enacted at the legislative level to alleviate some of the pain involved in procuring innovative products and services.

Read more