On DoD: Navy launches ‘Innovation Cell’ to speed IT acquisition

It’s almost accepted as a truism in the modern era that the federal acquisition system simply isn’t up to the challenge of buying information technology. But IT leaders in the Navy suspect the problem isn’t so much the regulatory scheme itself, but the way it’s historically been applied to technology purchases.

To test that premise, on Thursday, the Navy’s program executive office for enterprise information systems will formally launch what it terms its Innovation Cell, a nascent effort to begin rapidly inserting relevant commercial technologies into Navy networks without a single change to the Federal Acquisition Regulation. PEO- EIS will begin by presenting industry with three “enterprise challenge statements” at an industry day in Tysons Corner, Virginia, one focused on big data analytics, another on enhanced virtual desktops and one seeking an end-user productivity suite.

“There are too many products that you can go down to Best Buy and purchase today, but we don’t have in our enterprise,” Capt. Paul Ghyzel, the deputy program executive officer, said in an interview with Federal News Radio previewing the innovation cell. “It’s for various reasons. Some of them, like security, are valid, but in other cases, it’s just that the model we use to acquire them today doesn’t lend itself to taking advantage to what’s already in the marketplace. When we build the next generation of aircraft carrier, we have to make the investment. In IT, the commercial companies are already making the investment, and we need to leverage that.”

The “cell” is more a framework than a physical place, and will serve several functions in the Navy’s acquisition ecosystem, officials said.

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For starters, it aims to significantly streamline the Navy’s requirements developments process by presenting industry with a clear, prioritized explanation of Navy-wide IT demands from across the service. That distillation will begin with one-by-one conversations with mission users from across the service, said Dan DelGrosso, the technical director for PEO-EIS.

“Part of our challenge today is telling industry what we need,” he said. “The challenge statement is a standard template that we work on with whoever the advocate of that requirement is, whether it’s a program manager, an echelon two commander or somebody else in the fleet that needs a particular capability. They come to the innovation cell, we have that conversation and we start building out that enterprise challenge statement. And we can then consider who else that impacts throughout the enterprise. So if someone wants to do data analytics in their human resources environment, if they want to use those analytics on [the Navy-Marine Corps Intranet], for example, we need to bring in the NMCI program office and the vendor. We’ll bring those technical domains in up front and make sure everybody’s on the same page before we present industry with a fine-tuned requirement.”

From there, the innovation cell will help individual requirements owners carry their needs through the acquisition system — not necessarily through the traditional and rigid step-by-step process of multiple requests for information, a draft RFP and a final solicitation — but through what DelGrosso said would be an early and continuous two-way dialogue with industry designed to help the Navy understand “the art of the possible.”

“The first thing we do after issuing an enterprise challenge statement is the discovery phase,” he said. “That’s where we take the requirement we wrote with the program, and then based on industry’s experience, they can come back and advise, counsel and discuss, and say, ‘OK, I understand what you want here in your initial requirement, but maybe what you’re really asking is X, Y and Z.’ So they help shape and finalize the challenge statement because they’re the subject matter experts, and we need to rely on them to help us close that technology gap. If you ask any acquisition expert about the biggest challenges in delivering IT capabilities, it always comes back to how we articulated our requirement at the very beginning. What we’re finding is that today, we go through the system and then find out midstream that we didn’t realize the potential. We’re trying to get the hard stuff out of the way up front so that we’re not having to retrace our steps over and over again.”

At the deckplate level of the Navy’s acquisition workforce, the innovation cell will also attempt to prevent program managers from having to repeat each other’s market research each time they need to address a common IT requirement. Ghyzel said the cell would try to act as a sort of “Consumer Reports” that managers can quickly turn to in order to determine the best ways to address the capability gaps they’re trying to fill.

“If you’re buying a microwave oven, Consumer Reports has already gone and assessed 20 microwave ovens, looked at the evenness of heating, how easy the keypad is to use, and puts that all on one sheet,” he said. “If you’re a program manager that wants to buy IT, you can take that kind of information and say, ‘OK, a lot of the work for me is already done, I know where to focus my efforts.’ That kind of process helps streamline, because the program manager’s not starting from scratch every time.”

The Navy innovation cell process and a handful of other rapid IT acquisition experiments across the military are being watched closely by both the Defense Department’s top IT and acquisition leadership, said Terry Halvorsen, the DoD CIO.

“When you look at the acquisition process, we have and divorce them from timelines. I think the processes we have are actually pretty good,” he told reporters on a conference call last week. “The execution of that process and maybe the way we sometimes lockstep ourselves instead of executing parts of the process simultaneously is what I think we have to look at. I do think PEO-EIS is doing a really good job, and we’re looking at some other experimental processes. But more importantly than me looking at them, I think [Undersecretary for Acquisition, Logistics and Technology] Frank Kendall is looking at those and is being encouraging.”

Navy officials said they were limiting the first phases of the innovation cell to just three topics as a deliberate effort to start small so that both industry and government could get comfortable with the new process and continue to refine it before it becomes a primary mechanism for technology insertion.

The Navy, in the end, will need a process that is both rapid and feasible, because throughout government, there are already plenty of theoretical concepts for innovating more quickly within the current acquisition system, said Jeff Frailey, the lead for the Navy’s innovation cell effort.

“There’s no shortage of efforts in this space, including the U.S. Digital Service’s playbook,” he said. “But you need the practice field too. You need to be able to get the teams together, they have to be able to collaborate, and that’s really what we’re codifying here in an engagement model with industry. I think that’s ultimately what brings together these approaches and puts speed on things.”