At the latest after Federal Chancellor Olaf Scholz’s speech on turning the corner, it’s no longer a secret that the public sector has a problem. Procedures in public procurement have blatant shortcomings, it is said again and again.
A prominent example is the digital pact for schools, under which 6.5 billion euros were made available for the digitization of educational institutions. According to a report by the German school portal, an online platform for teachers and school administrators, only a small part was accessed three years after the start.
Billions of taxpayers’ money are released, but then not used – Finance Minister Christian Lindner, who wrote a fire letter to Defense Minister Christine Lambrecht and Chancellor Olaf Scholz in mid-June of this year, as the “Spiegel” first reported, is afraid of this. In it he criticizes procurement procedures in the Bundeswehr and makes it clear that projects should no longer be procrastinated or delayed.
Sascha Soyk, a native of Hesse, a soldier, strategy consultant and founder, goes one better: “There is no European armaments authority that works so inefficiently.” He is referring to the Federal Office for Equipment, Information Technology and Use of the Bundeswehr (BAAINBw).
Its desolate structures and shocking backwardness are also discussed in an article in the “Tagesschau”. Among other things, one learns that apparently “tons of paper for examination” will still be carted to the headquarters of the BAAINBw in 2022.
In general, investments would too often get lost in the administrative swamp of the authorities – because they work too inefficiently, says Soyk. Because procedures are too lengthy and bureaucratic. According to Soyk, authorities play too much e-mail ping-pong, hardly anything is digitized.
“We have to make public procurement law easier to apply,” the 37-year-old concludes from the failures of the past few years. According to the founder, authorities therefore need a platform that would make it easier and faster to purchase backpacks, monitors and other material for the Bundeswehr – a kind of Check24 or an Amazon for authorities.
Instead of waiting for reforms from above, Soyk decided in 2020 to found the Munich-based start-up Govradar. The Govtech platform went live in October 2021. The first customers are already using the tool, including the city of Kaiserslautern, Hessen’s mobility service provider Hessen Mobil and other district administrations.
The platform of the govtech start-up should automate tender documents such as product and provider-neutral service descriptions for public clients and thus be able to create them at the push of a button.
What sounds like technical jargon is actually quite simple. Public authority employees enter what they need on the start-up’s platform, similar to Amazon. These can include cameras, laptops, chairs or printers.
They should be able to specify their own preferences using checkboxes. If a school needs new computers, for example, they can use the platform to specify the computing power or connections the devices should have. The Govradar program then selects offers that can then be forwarded to the responsible authorities for tendering in the next step.
All this is usually quick, clear and uncomplicated. To date, things have been different in public authorities: Soyk explains that one would often sink into voting chaos there. Masses of e-mails are sent back and forth in order to communicate with each other, i.e. between countries, municipalities and industry.
There is little digitization and no platform that can be used to quickly and easily describe what is actually needed and which providers are suitable. The consequence: procurement procedures are lengthened, funds are stuck in the authorities, schools remain without laptops and the armed forces without ammunition.
The first round of financing took place this May. The govtech start-up from Munich raised a six-figure sum as part of a seed financing round. The lead investors are business manager and chairman of the supervisory board of Continental AG, Wolfgang Reitzle, and Andreas Kupke, founder of the Finanzcheck portal.
With the money collected in May, Soyk wants to further develop the platform – and get into defense procurement. This means that Bundeswehr materials can then also be obtained from here.
Offers for tanks, jets or frigates should be left out, says Soyk. Such purchases require more planning than a few checkboxes. But ammunition, equipment such as helmets or glasses should also be able to be ordered via the platform in the future, if Soyk has his way.
As a soldier in the Bundeswehr reserve, the founder maintains a special closeness to the troops. The issue of safety is very important to him. “In view of the latest geopolitical developments and the terrible war in Ukraine, we want to help strengthen western nations and their allies,” says the founder, who himself swaps his shirt and jacket for a camouflage uniform every few weeks.
The 37-year-old leads a command reserve group of mountain troops. There the founder practices the struggle for survival, bivouacking in the wilderness and overcoming mountain peaks.
Soyk has been a reserve officer in the Bundeswehr since 2005. At the same time, he completed a business administration degree in Frankfurt/Main and in Mannheim. After his master’s degree, he started as a strategy consultant at Roland Berger, before moving to the Bundeswehr’s Cyber ??Innovation Hub as Director of Finance and Operations. After a stint at the US data company Palantir, he started his own business with Govradar.
For the foundation, Soyk brought the TU Munich graduate Daniel Faber on board as CTO. The two met through a tender that Soyk launched in 2020 and sent out via a mailing list from the Center for Digital Technology and Management (CTDM). Faber previously headed the software department at Attocube, a Bavarian nanotechnology company, for eight years.
The aim of the platform of the Munich Govtech is also to give start-ups a chance to participate in tendering processes in the public sector. Products and offers from start-ups should also be taken into account in the Govradar database – if the requirements of public clients match the offers of a start-up.
It is often the case, explains Soyk, that large, established corporations have better chances in tendering and award procedures because the responsible officials prefer to play it safe and do not want to experiment or take risks with young companies. The platform made it easier to overcome the bias, the preconceived notions that employees bring with them in manual selection in tendering and award procedures.
To date, it is unattractive for start-ups to work with the public sector – precisely because of the bureaucracy, the lengthy processes and the unwillingness of the authorities to take risks. With regard to the Bundeswehr, the Ministry of Defense has repeatedly expressed the desire in the past to work more closely with start-ups and small and medium-sized companies in the area of ??procurement in order to become more modern, innovative and digital.
The crux of the matter: The federal government does not document how many orders the Bundeswehr awards to start-ups, as emerged from a request from the FDP last year. The liberal party reacted with outrage: “This nips the funding of innovative start-ups in the bud,” commented Alexander Müller, spokesman on defense policy for the FDP parliamentary group.
Cooperation between the public sector and start-ups is particularly unattractive because it is expensive. The effort involved in participating in all the tenders costs money due to the long bridging phases, which in many cases only large companies can afford. However, that should not be an exclusion criterion, according to Soyk. “Because the real innovations come from the startup sector.”
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