In this time of tight budgets and potential loss of global technological superiority, the need for innovation is greater than ever. As Frank Kendall, Undersecretary of Defense for Acquisition, Technology and Logistics shared with an audience of defense industry leaders recently, “We have to focus more on innovation, and we have to get better capability in the hands of the warfighter.” That focus pervades Better Buying Power (BBP) 3.0, the latest iteration of a Pentagon initiative designed to achieve dominant capabilities through technical excellence and innovation.
These are needed across many areas, including acquisition, where it can improve the management of scarce resources. Indeed, the website facethefacts.usa.org reported last year the Government spends $74B on Information Technology, though 26% of major IT Investment Programs (which comprise 32% of IT Budget) are “mismanaged,” according to the Office of Management and Budget (OMB). Mismanaged is defined as duplication and cost overruns. Undoubtedly, many of these cost overruns are related to schedule overruns. In addition, many digital services have poor outcomes, such as unmet user expectations or unused or unusable features.
How do you acquire and deliver IT in more innovative ways that enable successful mission outcomes, dominant capabilities and maximum taxpayer ROI? In addition to the latest iteration of the well-known BBP series, a wave of recent tools are available offering new and stimulating alternatives to drive innovation. These evolving tools (in contrast with adding to an already bountiful set of policies and directives) include TechFAR, Digital Services Playbook, and Innovative Contracting Case Studies.
Here’s a thumbnail sketch of each of the tools, their importance, and a few of my observations.
Digital Services Playbook
OMB and the Federal Chief Information Officer (CIO) have issued the Digital Services Playbook, capturing 13 key “plays” drawn from private sector and government successful best practices. If implemented in an integrated and consistent way, these plays will increase the success rate of IT acquisitions and programs. Further, at the end of each play, are key questions or a checklist for application. Some of the key themes are cloud computing, harnessing data, open source, agile methodologies, and simple and intuitive design. I found the structure and interface with the document itself to be clear, intuitive, streamlined, and easily viewable on many devices. Play #5, titled “structure budgets and contracts to support delivery,” offered nine recommendations through a checklist. However, what I found surprising was that only one of the recommendations was for budget, while the rest were for contracting.
The TechFar Handbook features “flexibilities” within existing regulations, namely the Federal Acquisition Regulation (FAR), that can help federal organizations execute the “plays” in the Digital Services Playbook. For example, as agile software development method is recommended in the playbook, the TechFAR provides relevant FAR authorities, including potential language, provisions, and application tips for adapting acquisition discipline to an agile software development environment. Referring to Play #5 in the previous section, I found footnote #2 in the Executive Summary of the TechFAR interesting. It details that “while the FAR offers flexibility in contracting, agencies must adhere to longstanding legal restrictions imposed on the ways appropriated funds are used to pay for IT. That may be part of the reason for seeing many more recommendations in the playbook for structuring contracts versus budgets.
Innovative Contracting Case Studies
The Office of Science Technology Policy (OSTP) and OMB released Innovative Contracting Case Studies to describe how federal agencies are using various models to grow “more innovation per taxpayer dollar – all under existing laws and regulations.” Specifically, it confirms through proven results how the FAR did not need to be revamped or replaced. Current FAR authorities provided the means to reshape existing processes to reduce transaction costs while still operating within the current laws and regulation. The main focus areas were:
- Discovering novel solutions through “incentive prizes” and “milestone-based competitions”
- Proving innovative solutions through rapid technology prototyping and challenge-based acquisition
- Scaling proven solutions through “staged contracts”
Further, other methods used that were captured in the document include Other Transactions, FIRE/FIST, and Agile. I’ve witnessed improved results firsthand with two of these. For example, I supported a program that used Other Transactions to provide a rapid, effective means to help airports modify their facilities to provide enhanced security. Also, I’ve seen agile methods adopted within acquisition that translated into greater customer satisfaction, and time savings. For example, I led an integrated support team that practiced principles consistent with those found in the agile manifesto. This resulted in the client’s acquisition documentation meeting all acquisition and program planning requirements, which enabled better informed milestone decisions for the programs. These timely decisions resulted in faster delivery of capability to meet their respective missions.
Improving IT Acquisition One Byte at a Time
The Federal Government is the largest buying organization in the world. Therefore, driving continuous improvement through innovation in an enterprise that operates in a complex environment with multiple unique missions, rules, and requirements will take time. It’s akin to turning around a huge aircraft carrier. The tools or guides described above represent the latest offerings on how to innovatively acquire and deliver IT capabilities more efficiently and effectively. What do you think of them?