For Tech Firms with City Contracts, Philly Fighting COVID is a Bad Omen for Innovation

2/7/21

By Michael Butler & Christopher Wink, 

Andrei Doroshin

City governments make commitments to their citizens to deliver services to improve their lives. Sometimes that work is best delivered by employees of that city government. Increasingly, governments with constrained budgets and rising expectations turn to third parties. Of these third parties, some are nonprofits and others are for-profits.

Usually the question of tax status hides in the background. Millions of dollars of municipal budgets around the country, including in Philadelphia, are spent on services rendered by outside entities. That changes quickly when the process breaks down.

In recent weeks, we’ve heard plenty about Philly Fighting COVID (PFC) — and that’s when we started hearing from and checking in with the entrepreneurs and technologists who have spent years developing relationships with the City of Philadelphia and and other local, state and national governments around the world. A common theme: Are we learning the wrong lesson from the failure of an untested startup? Put another way, among his many other alleged sins, did a 22-year-old student just set back a movement of more competitive deployment of city resources?

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