Is Innovative Procurement the Answer to Budgetary Constraints?

As agencies continue to feel pressure to modernize their aging infrastructure, and find other avenues for completing their respective missions with restrained funding, several areas of interesting solutions seem to be working their way across government.

As blogged by Steve Kelman on Federal Computer Week's The Lectern, several agencies are using competitive prototyping, and other innovations, as a step to encourage groundbreaking solutions by industry, combined with evaluating process over paper.

First up the Department of Homeland Security’s (DHS) Flexible Agile Support for the Homeland or FLASH, which was designed to be a small business contract for a variety of Agile development and other DevOp services. The source selection process focused on the use of tech demonstrations, and forgoing the typical Request for Proposal process which is usually daunting for small businesses, especially newer entrants into the market.

This was an excellent approach to acquiring software development services, but was regretfully plagued with management errors in the evaluation and selection process.

A teachable moment for sure, but DHS has made a commitment to innovative, and will continue to find ways to improve its procurement processes and find the best ways to bring in innovative firms and solutions to the agency as discussed on Government Matters.

These tech demos are an excellent way to see how firms behave, think, interact with users, and of course, verify the quality of the products and services being developed. These are tangible factors for evaluation, and can simply not be done with paper-based approaches to selecting vendors.

Besides DHS and 18F from the General Services Administration, the Department of Veterans Affairs, used a tech demo to select a vendor for a task order for software development to support benefit appeals processing modernization. The Center for Medicare and Medicaid Services has done tech demos, as has the Department of Health and Human Services, who have been pioneers in digital services through the Buyers Club, and the leadership of Mark Naggar.

This past week, the Office of Personnel Management issued a Request for Information on innovative solutions to modernize their infrastructure, and how best to pay for it. Perhaps a culture shift is underway across government, which is a good thing. A very, very good thing.

Let’s hope that these initiatives continue to spread across government, and that the days of reading through 100-page RFPs are at an end for both industry and the government.

Federal Procurement Innovation Through 'Micro-Consulting'

I was intrigued by an article written by Dr. Steve Kelman on FCW on how to improve opportunities for small businesses, and also allow for rapid acquisition processes for very targeted problems (i.e. innovative procurement methods).

This approach, known as "micro-consulting", focuses on targeted initiatives providing services at or below the micro-purchase threshold. As described in the article, this is the business model of Chris Cairns, one of the co-founders of 18F, and who started a firm called Skylight.

In announcing the creation of his firm, the post announced:

...Not every problem requires a full-blown consulting engagement. Often times, a short burst of work on a specific topic is all that's needed to help propel government managers and teams forward. That's why we're introducing digital consulting services priced within the federal micro-purchase thresholds... 

This model seems to make sense on many fronts, across the entire spectrum of federal government. Take requirements development for example, one of the most critical issues that often leads to program failures.

This was a recent focus by Gen. John Michael Loh (ret.), who recently lamented on the bureaucratic, non-value added defense procurement process.

Gen. Loh stated:

...We need to learn from the past and get back to basics in the acquisition system starting with the requirements process. From the start of the F-15 and F-16 programs in the early 70s through the F-22 start in the late 80s, concept development began with small, smart teams working together from the operating and developing commands; understanding the need; conducting trade-off analyses to assess risk and cost, in continuous dialogue, producing a requirements document unfettered by top-down micromanagement or wall-to-wall reviews and nitpicking...

What if these teams can have very targeted engagements from experts in the field on particular topics, such as cyber, cloud, logistics, etc? What if the process was able to be turned on its head, and instead of contracting out for a typical engagement of years, hundreds of thousands of dollars, and questionable results, you simply purchase exactly what you need, very quickly, cheaply, and with targeted results? 

This process could open the door to many entities, consultants, and start-ups that have what the government needs, but can not be at the table because of the barriers to entry, for starters. Small businesses would have expanded opportunities for introducing innovation, risks could be taken, and experimentation can be more readily conducted. 

Firms can build past performance, and perhaps even be rated on an Amazon-like scale. Engagements can be purchased with days, and provide input and value in a short-time frame, as needed. Raising the micro-purchase threshold to $10,000, or maybe even up to $100,000, would further expand the opportunities for these types of engagements. 

This is a very interesting way to expand innovation in federal buying, lower barriers to entry, expand the base of contractors, lower administrative costs dramatically, and also add value immediately. I too hope this initiative can have a disruptive effect on federal procurement. It can be a win-win for both parties. So why not give it a try?

Is Procurement Reform Possible Or Illusory?

This article originally appeared on the Public Spend Forum.

There has been much talk about procurement reform over the last few decades, and has been a hot topic for the last several years. Many initiatives are ongoing, most notably the Section 809 Panel for the Department of Defense. In its initial report, new policies are not being proposed, no new laws or regulations. There is actually a focus on elimination of what bogs down the ability for the desired; speed, agility, and a renewed sense of mission.

However, much talk of “acquisition reform” revolves around a discussion of what is wrong with federal procurement. This discussion is about what needs to happen if we are going to keep up with modern technology, secure our aged technological platforms, and overall improve the performance of government.

An excellent example of this type of thinking comes from Orion Hindawi, CEO and co-founder of Tanium, in a recent piece on Federal News Radio. Although I completely agree with his positions, the talk of “acquisition reform” never centers on the root cause of the issues, and why we are seemingly going in circles when it comes to federal buying.

If one wants to get at the heart of the matter, then required reading should be the guest blog of Steve Kelman’s The Lectern on Federal Computer Week.  David Eaves, Lecturer in Public Policy at the Harvard Kennedy School and Director, discusses why reform efforts may prove to be fruitless, and even dangerous.

 Mr. Eaves writes:

…Procurement is often cited as the big bad bogeyman holding us back. If only we fixed procurement, there would be more choice, better vendors and less failure among government IT projects.

I don't buy it.

We can get better choice, better vendors and less failure without reform. I'm not saying procurement is perfect. But the benefits of reforming procurement are not needed and the dangers are significant…

So what is the issue then?

…My observations have been that learning to navigate procurement is one of the key elements that differentiates successful from unsuccessful companies in the government space. Sadly, it can sometimes become the core skill of success, more relevant than even the ability to deliver an effective product or service…

Here is where we start to narrow our focus about what the real issues are, since we are talking about culture, and why this culture has created a system that is complex, slow, and does not normally satisfy needs.

Part of this situation needs to start looking beyond simply blaming contracting officers for poor performance. I never understood how this strategy would be effective. How can one possibility be expected to be “innovative” when you are not provided any resources our support for doing so? Performance metrics are misaligned with objectives, all actions are focused on simple compliance and not taking any unnecessary risks, and servicing the customer as a business advisor is often seen as less than ideal.

Leadership is a major issue. There needs to be more knowledge transfer to demonstrate to acquisition leaders that the reason things are so bad might be the reflection in the mirror. Cultivating a culture for people to really think outside the box is a good thing. The current procurement rules allow for innovation, and more commercial practices, as discussed in the Office of Science Technology Policy and the Office of Management and Budget Innovative Contracting Case Studies, a document that describes several ways federal agencies are getting more innovation per taxpayer dollar – all under existing laws and regulations.

A major shift in collaborating with industry is also in order. As Mr. Eaves points out, government personnel who can identify good technology and practices from bad ones is limited. It really is asking a lot of public servants who rarely buy technology, or who are not experts, to be able to work on this ever-changing landscape without specialization. Therefore, industry must be able to step in and help government understand the technology and practices that provide a mutually satisfactory outcome.
Win-win is always at the top of industry’s mind, regardless of the unfortunate stigmas associated with the industry-government relationship.

Finally, back to Mr. Eaves:

…The reality is procurement law allows for a fair degree of flexibility. Procurement lore does not…

…This culture change that USDS engaged in is not easy, but changing lore is probably easier and more effective than changing law…

The U.S. Digital Service TechFar handbook, is an excellent guide on procuring IT in a flexible and innovative manner, and a culture-hacking tool. It can be done, all within the existing framework, if there is a will to be better buyers, and the desire to change the status quo.

Many in industry believe that acquisition reform efforts will have a net positive outcome, that will lower barriers to entry, and allow them more opportunities. Mr. Eaves believes this to be fantasy, and I agree.

Improving Transparency in Federal Government May Improve Innovation

A while back, Nick Wakeman, of Washington Technology, went on a self-described “rant” about the lack of transparency in awarding task orders on certain contract vehicles. 

Allow me to continue the rant.

One only needs to do a cursory review of the Interagency Contract Directory (contractdirectory.gov) to see the enormous amount of contract vehicles across government. By applying a layer of data analysis on top of it, a frustrating pattern emerges at the lack of information available on awards off of these vehicles, or information on the vehicles to begin with.

According to the website:

…The main purpose of ICD is to help agencies take advantage of interagency contracts by supporting market research and the identification of suitable contracts that can facilitate the efficient and effective placement of orders, including with small and disadvantaged businesses. The new ICD will strengthen both of these goals by making the tool more intuitive and easier to use… 

As Nick mentioned is his blog:

…This task order is worth $224.4 million. That’s nearly a quarter of a billion dollars. This is a big deal. Why keep it hidden?...

Why indeed. 

I agree wholeheartedly with Nick that transparency into larger awards should be mandatory, as there simply is too much secrecy with the amount of money flowing through all the contract vehicles across government. Perhaps the $10 million threshold Nick mentions might be a good start. I know many small businesses spend countless hours trying to find out information about these activities, with little success unless you have some insider knowledge. 

As Nick mentions, disclosure would not only bring more transparency to the process, but valuable data can be another component to offer small businesses an important pathway to opportunities which are currently closed. 

However, I also want to take transparency a step further in the pre-solicitation phase, by finally allowing some transparency to shine on responses to sources sought notices across government. 

One of the main issues here is that procurement personnel often complain about the poor responses, or lack of responses, by small businesses. Granted there is very little review of why this might be occurring, but perhaps another data point on Fedbizopps.gov might be something to explore.

Currently, firms can list themselves as an “interested party”, and appear under the tab labeled Interested Vendors List. What if we took this a step further, eliminated the Interested Vendors List, and actually created a way to show firms that have actually responded, and create a tab with this data called “Respondents”?

This would eliminate many of the firms that are simply fishing or unqualified, unscrupulous legal firms who are “experts in protests” advertising on these notices, scammers and spammers, and provide real data on who is responding and their capabilities. 

I know I always wonder: 

• Whatever happened to my response?
• Was it received?
• Is there any opportunity for follow up?
• Who I might team with?
• What were the results?

Perhaps with this data, small businesses can find more opportunities to find teaming partners, and for firms to find complementary solutions to improve service delivery and performance. 

Of course this would all need to be automated, as the last thing we want, or need to do, is put further burdens on the acquisition workforce. 

Transparency is always a good thing to improve competition, opportunities for small businesses, and procurement outcomes. Let’s open the curtains and see what is possible.

Is Acquisition Reform at the Pentagon a Lost Cause?

wired.co.uk

One of the clearest signs that the Pentagon, or at least the Air Force, has seemingly thrown in the towel on any reasonable approaches to “acquisition reform” is the news that the Air Force has turned to IBM’s Jeopardy-winning cognitive computer, Watson, to tame the beast that is defense procurement.

…The idea is to create a “bureaucracy buster, or let’s call it a decoder,” said Camron Gorguinpour, a senior official in the Air Force’s acquisitions office…

…The Pentagon’s procurement system is the “perfect application for Watson,” Gorguinpour said. “While our acquisition system is very complex, it is document based. . .It’s unreasonable to expect that a single individual or even a group of individuals to be able to fully understand all of the relevant documents to answer a specific question.”…

This initiative is not intended to replace the acquisition workforce, but to help enhance making more efficient procurement decisions.

…The system will not only help government procurement officials do their jobs—by being able to query the system to find out, for example, whether a contract can be awarded on a sole-source basis…

This is nothing short of textbook treating the systems of a disease, and expecting a silver bullet approach to taming a monster that has many cooks in the kitchen. Decades of neglect and cutting the acquisition workforce has made the proverbial chicken come home to roost. Not only is training insufficient, it is not preparing the workforce for the types of challenges they currently face. Further, the hiring process is just not getting the type of talent in the contracting, project management, engineering, and IT fields that are necessary to execute the mission.

Nonetheless, Congress needs a hard look in the mirror as to why the system is so complex, and in many regards, broken. The years of “fixing” issues with more and more legislation, more and more broken policy, and more and more oversight has created a bureaucratic mess.

One lonely voice in the crowd is Dan Ward, a retired Air Force Lieutenant Colonel, who has written several books on real world examples of rapid technological innovation, despite the defense procurement system. His work should be must-reading for all involved in acquiring goods and services at the Pentagon, and hopefully help those realize there is a better way.

 I just find it disheartening the sheer frustration at the inability to make real change happen at Defense, to the point that Watson has to be brought in for relief. Mr. Ward demonstrates that there is a better way, but when no one is listening, I suppose the approach is akin to surgery using a chainsaw, and not a scalpel.

I wonder if Watson will find fault with it’s own contract?