If there are two areas in government that would make the biggest splash in terms of innovation, you could make a strong argument for federal acquisitions and human resources. Recognizing this fact, the Office of Federal Procurement Policy (OFPP) released a memorandum today that encourages agencies across the federal government to pursue innovative approaches to acquiring goods and services. Given the growing importance of digital acquisitions, OFPP is also launching a Digital Acquisitions Pilot along with the memo.

This pilot will test the following hypothesis: if each agency had its own cadre of highly-trained, cross-functional digital experts, the value, quality, cost, and timeliness of digital and technology acquisitions would improve. True to lean startup principles, we will test this hypothesis with seven volunteer agencies to learn what works best (and what does not). These learnings will inform the development of more definitive guidance for the benefit of staff at all agencies. For those participating in the pilot, it’s designed to accelerate team’s learning about and execution of digital acquisitions. As a result, the pilot will smooth the digital acquisition process while contributing to learning cultures within the agencies’ procurement teams.

Digital Acquisitions Pilot rationale

The federal government spends about $80 billion on information technology (IT) contracts but doesn’t receive $80 billion worth of value. The way the government uses and buys technology has changed, but the workforce, policies, and procedures have not fully caught up with the speed of technology. There are four areas that have room for improvement:

  • Information gaps: Information siloes amongst acquisitions and IT teams exist at every agency. Teams don’t share knowledge and information seamlessly.

  • Acquisition workforce lacks the appropriate training to succeed: Many teams are not equipped with modern-day approaches and requires help articulating needs, gaps, and problems.

  • IT status quo needs reform: Large multi-year contracts fail to move at the speed of technology with limited user input, which takes longer, costs more, and delivers poor results.

  • Desire for innovative partners: Companies with innovative approaches to solving government’s problems (for example startups, small businesses) find it difficult to navigate federal acquisition regulations, and as a result avoid engaging agencies.

Noticing these gaps, a team of 18F, Presidential Innovation Fellows, and United States Digital Services (USDS) team members are launching the Digital Acquisitions Pilot aimed at solving the deficiencies in acquisitions involving digital services and products. Using federal acquisitions as the backdrop, this pilot program has been designed to increase skills, change processes and policies, and increase collaboration with innovative partners.

This pilot was jointly announced with an OFPP memorandum that establishes Acquisition Innovation Labs (AILs) at 24 agencies as a mechanism for achieving better acquisition outcomes for taxpayers. The memo places special emphasis on the development of digital acquisition capabilities within the AILs based on successful models found at other agencies. While the pilot will focus solely on digital or technology innovations, AILs are not limited to just those kinds of acquisitions.

How it works

Using human-centered design, lean startup and agile principles, the pilot will engage two digital acquisitions at each of seven volunteer agencies, for a total of 14 acquisition projects. The joint 18F, PIF, and USDS team will deploy in-house talent and train a cross-functional team of experts from each of those agencies to complete a discovery/design sprint, planning, and implementation. Team skills will span the following domains: Acquisition/Procurement; Policy/Law; Product Strategy; Agile Project Management; Architecture/Engineering; User Research/Experience Design; Data Management; and Cybersecurity/Operations. When entering each agency, the team will tailor the approach and training to meet the specific needs of the organization.

Like the proverb “give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime,” the purpose of these pilots is not just to disrupt a few acquisition and procurement processes and leave. Instead, they’re meant to build capacity in these agencies to incite change within the organization. The joint group will coach the agency teams throughout the acquisitions, helping participants to become more confident in their ability to modify acquisition processes to fit modern-day practices. With each new phase and acquisition, the teams will become more competent and will improve their skills.

Each agency that participates in the pilot program will opt into sharing stories, successes, and lessons learned from the process in the Acquisition Gateway. Ultimately, these Pilots will seed a community of digital acquisition innovation experts that will grow and flourish across the government.

Building upon past successes

Innovation in digital and technology acquisition is not a new phenomenon. In August 2014 on the heels of the announcement of the launch of the USDS, the White House Office of Science Technology Policy and OMB released Innovative Contracting Case Studies, an iterative, evolving document that describes ways federal agencies are getting more innovation per taxpayer dollar — all under existing laws and regulations.

In 2015, the USDS authored the TechFAR Handbook, which “highlights the flexibilities in the Federal Acquisition Regulation (FAR) that can help agencies implement ‘plays’ from the Digital Service Playbook with a particular focus on how to use contractors to support an iterative, customer-driven, software development process.” USDS team members have also advised a number of agencies on how to conduct acquisitions using modern practices.

Additionally, 18F has delivered nearly one dozen consulting engagements that has potentially contributed to the savings or avoidance of tens, if not hundreds, of millions of dollars in costs through activities such as RFP Ghostwriting. (We’re currently in the process of formally analyzing and quantifying the financial impact.) 18F has also introduced innovative procurement approaches through its Micro-markets and Micro-purchase Marketplace.

The Department of Health and Human Services has also created a “Buyers Club” within their Idea Lab, aimed at spreading the adoption of acquisition practices that has resulted in a number of wins. The Department of Homeland Security recently created the Procurement Innovation Lab, focusing on inspiring fresh thinking and creating a community of specialized procurement specialists within their agency.

Building upon these past successes, the assembled 18F, PIF, and USDS team will use these lessons and continue to push the boundaries of what is possible within government acquisitions and procurement. For more information about the Digital Acquisitions Pilot, feel free to email Chris Cairns or Amy Wilson.