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Think Agile in Modular Acquisition for IT

Think small bites when thinking Agile in modular acquisitionGovernment agencies need the most innovative IT solutions, but they also need to “innovate with less.”  That’s where Modular Acquisition comes in, taking a “small bites” approach to IT investment, which gives government fast access to the latest technology while lowering the risk of upfront spending on systems.

The Agile approach is the most appropriate way to accomplish modular acquisition.  In my two-part primer on Agile I’ll look at why it works and what it takes to implement.

OMB Takes New Approach

The Office of Management and Budget (OMB) released its new framework for an Agile approach in last June’s “Contracting Guidance to Support Modular Development.” This guidance is further required by Information Technology (IT) Reform Action 15: Issue Contracting Guidance and Templates to Support Modular Development, 25 Point Implementation Plan to Reform Federal Information Technology Management. The guidance references using Agile approaches to accomplish this type of acquisition for purchasing and implementing IT programs.

OMB: Benefits of Agile

Speed: Allows for delivery of usable capabilities more rapidly as agency missions and priorities mature and evolve. Replaces the “waterfall” approach which is a classically linear and sequential approach to software design and systems development.

Increased Flexibility: to adopt emerging technologies incrementally, reducing the risk of technological obsolescence. Results in a low overhead method emphasizing values and principles rather than processes through cycles completed each week or month. Project priorities are re-evaluated at the end of each cycle.

Decreased  Risk: Agencies plan for smaller projects and increments versus the grand design or “Big Bang Theory.” Smaller Bites are easier to successfully execute because each project has a greater overall likelihood of achieving cost, schedule, and performance goals than a larger, all-inclusive development effort.

Small Business Opportunities: Small businesses can compete more easily for the work, which aligns with recent legislation signed by the President to help small firms compete for more federal contracts and ensure that agencies take their annual small business contracting goals more seriously.

Better Contractor Performance: Ties the award of contracts for subsequent Task Orders to the acceptable delivery of prior projects, allowing agencies to better monitor contractor performance and take corrective actions without affecting the overall budgeted funds.

Greater Investment Control: An investment can be terminated with fewer sunk costs, capping the risk exposure to the agency when priorities change, a technology decision doesn’t work or the contractor’s performance doesn’t deliver results.

How Does Agile Work?

The “Big Bang” theory in acquisitions does not work well when purchasing IT products and, coupled with current fiscal restraints, it is becoming increasingly difficult to deliver product on time and within budget. By using the modular development method, and an Agile approach, the program manager can focus on an investment, project, or activity with progressive expansion of capabilities. This concept further allows for smaller investments, applied to discrete projects or increments, to develop and implement products and capabilities which will build into the much larger final product or capability.

Traditional Approach

Modular Approach

 Award large long-term contracts Award small orders for short time periods
 Lengthy procurement cycle Shorter acquisition cycle leverages streamlined processes
 Awarding option years is rule, not exception Options dependent on vendor success
 Project success dependent on a single vendor Multiple vendors provide a variety of services


New Paradigm – Think Agile

The classic acquisition approach is inefficient when procuring IT systems and further is cumbersome for a program that wants to build in a modular fashion.  IT is ever-changing, and when embarking on an enterprise level solution, the development and deployment process simply doesn’t work in today’s era of fiscal restraints and highly technical solutions.

Buying capabilities in an initial incremental format and then planning for the follow on roll out of product is much more manageable, allowing for tighter control of the program budget and adjustments due to changing priorities.

I’ve made the case for why Agile is a top acquisition approach for IT.  Next time, I’ll look at how to implement it.  This concept is new to most programs and businesses and takes a dedicated approach and team to make it work.