Despite funding many of the most significant scientific and technological breakthroughs, the U.S. government is not widely recognized for its swift adoption of new technology.
Take government contracts and procurement, for example. While many agencies now post requests for proposals (RFPs) online—inviting private contractors to submit applications—the evaluation process remains largely manual. This includes assessing contractors' suitability for various projects.
However, one company, Procurated, launched in 2019 to revolutionize this process. Its online platform acts as a “Yelp” for government agencies, enabling them to search for vendors and view their reviews and ratings.
With the introduction of an AI-powered tool called Canary, Procurated has enhanced agencies' ability to aggregate hundreds of vendor reviews and instantly receive alerts if any issues arise with a supplier.
Addressing Procurement Challenges
Procurated's founder and CEO, David Yarkin, has firsthand experience with the challenges of government procurement, having previously served as the Deputy Secretary for Procurement in Pennsylvania, overseeing a $4 billion budget.
Yarkin recalled a crucial issue he faced: effectively vetting suppliers. Traditionally, this process involved asking for three references, a method that often led to biased selections. “We want to know not just about praise but how suppliers resolve issues when they arise,” Yarkin explained.
Ultimately, this gap in supplier evaluation and a lack of effective online review technology inspired Yarkin to create Procurated. “If I can read 4,300 reviews about a cheesesteak place, I should certainly be able to find reviews on a supplier I’m awarding a multimillion-dollar contract to," he noted.
Enhancing Supplier Evaluation with AI
Procurated's Canary addresses these gaps through a web app that aggregates reviews and performance insights from over 15,000 suppliers, offering a 1-5 star rating system. Each supplier receives both a national and a localized score, recognizing that a vendor's performance can vary by location.
For instance, a supplier might hold a national rating of 4.5 but only a 3.2 rating in Massachusetts, indicating a potential issue for local contract managers.
To ensure authenticity, all reviews are verified through government employee email addresses. At present, Procurated boasts a community of over 106,000 unique government employees, with around 17,000 contributing reviews.
Key Features of Canary
Canary offers several robust features, including:
- Performance Review Dashboards: Visual insights into supplier performance trends over time.
- Instant Risk Alerts: Prompt notifications for contract managers regarding reported supplier issues.
- Asynchronous Business Reviews: Efficiently manage performance feedback and improve time management for procurement teams.
- Competitive Analysis: Data-driven comparisons of supplier performance on similar contracts.
Utilizing OpenAI’s GPT-3.5 and GPT-4, Procurated has implemented safeguards against AI hallucinations, ensuring reliable insights enhance supplier evaluations.
In the coming months, Procurated plans to introduce a retrieval-augmented generation (RAG) system to further optimize the platform’s processing capabilities.
A Vital Resource for Taxpayer Value
Given that state governments oversee vast annual expenditures nearing $2.2 trillion, effective supplier performance management is crucial for maximizing taxpayer value. Procurated aims to enable agencies to track this spending efficiently with Canary.
Benefits for Suppliers
Procurated does not only benefit government agencies; it also offers a version of Canary for contractors. This platform allows suppliers to view their own scores and gauge their performance against competitors, while maintaining privacy through anonymized data.
Yarkin mentioned, “We’re gathering substantial data from government reviews, which we can analyze and share with suppliers to highlight improvement areas.” Suppliers can also compare their scores across various dimensions, such as inventory and customer service.
Procurated operates on a subscription-based model for suppliers, with fees varying based on the volume of data accessed. Annual charges range from a few thousand dollars for smaller suppliers to as much as $100,000 for larger enterprises.
By providing timely, AI-driven insights into supplier performance, Canary empowers both government agencies and suppliers. If successfully implemented, this innovative approach promises significant benefits for all parties involved: governments, suppliers, and Procurated alike.
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