Does innovation exist in federal procurement? OFPP is on the look out

Innovation has become one of those words that has lost its meaning, particularly in the federal market.

Think about what is considered “innovative” these days. Reverse industry days? Vendors and agencies are supposed to talk.

Other transaction authority? The Defense Department, NASA and other agencies have had access to OTAs for 25-plus years.

Cloud computing? Ever heard of managed services or alternative service provider (ASP), these were the cloud before “the cloud.”

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So does that mean innovation in the federal sector is unattainable? Is it just, in the words of Mark Forman, the former administrator of e-government and IT at the Office of Management and Budget under the President George W. Bush administration, “putting lipstick on the pig?”

“There is more discussion around innovation both inside and outside of the government, but there is not as many solid use cases and stories that break things down in practical sense that will help people,” said one federal procurement expert, who requested anonymity because they didn’t get permission to talk to the press. “The biggest challenge that I see is with innovation in general is people are throwing out the word and do not know how to apply it, how to problem solve. They are just saying, ‘We are doing something innovative,’ but it may not be innovative.”

This question of what is innovation and how to measure is at the center of new effort by the Office of Federal Procurement Policy (OFPP). It has asked the industry association ACT-IAC’s Institute for Innovation for help in identifying and detailing federal acquisition innovation across government.

Tim Cooke, CEO of ASIGovernment and a member of the institute, said a team of 40-to-50 volunteers are starting to work on a project to figure out what’s working in government and develop a series of use cases for others to follow.

“I’ve heard from lawmakers that they feel like they’ve got to find a way to reduce the burden and get some of the red tape out of the acquisition process for agencies,” Cooke said. “A lot of the concerns are real because there is a perception that there is a lot of red tape and a lot of barriers to entry to the federal market.”

Cooke said OFPP asked the ACT-IAC working group to focus on four specific areas:

  • Problem focused – What is the problem such as getting email to the cloud, and how to get late adopters to look at what early adopters have done? This area is focused on the President’s Management Agenda, specifically around the IT modernization goal.
  • Process focused – This is focused on the work of places like the Homeland Security Department’s Procurement Innovation Lab. Who is looking at the acquisition process and innovating, testing and expanding it? “They’ve gone to FAR Part 1 and set the stage by doing what makes sense for government. They are using business judgement and making the rules do what they need them to do,” Cooke said.
  • Build a catalog of learning by innovative organizations – What have agencies learned over the last 3-to-5 years about how to use “new” authorities such as OTAs, commercial solutions opening (CSO) or challenges? GSA launched a pilot program around CSOs in early August. “GSA’s CSO procedure offers fast-track vendor selection timelines, simplified contract terms, and a preference for allowing the vendor to retain core intellectual property, when appropriate. CSO is designed to attract start-up companies and those new to the federal market and should benefit both government and taxpayers with reduced costs and improved performance,” writes Chris Hamm, the director of FEDSIM in a 8 blog post.
  • Identify innovative organizations that don’t get a lot of attention – Cooke said there are more than 3,000 buying organization across the government, and while places like GSA’s FEDSIM or the National Institutes of Health are well known, what are the other organizations that have successes they can share with the rest of government and industry?

Cooke said ACT-IAC hopes to deliver initial findings at the Executive Leadership Conference (ELC) in October.

Survey says agencies desire innovation

And it looks like the sharing of information can’t come fast enough. A recent survey by the Professional Services Council and Grant Thornton found in their 9th annual biennial survey of federal acquisition leaders that the use of innovative practices is a major priority over the next 2-to-3 years.

The survey found 82 percent of the respondents expect the use of innovative practices to increase by 2021, while more than half rated the use of and access to innovation a 2 on a scale of 1-to-4.

“This was an area I was a little disappointed in. It was clear that the term innovation is being talked about a lot in government, but it’s not well understood. I don’t think senior leaders are defining the issue well and I don’t think the acquisition community understands what is expected of them in terms of innovation,” said Alan Chvotkin, senior vice president and counsel at PSC. “The acquisition respondents we talked to really didn’t believe they were doing a good job in either using innovative acquisition techniques or gaining access to innovative capabilities in industry.”

Chvotkin said there clearly are pockets of innovation with the labs and the rise in the use of OTAs are two examples of where change is happening.

But he said agencies should refine where they really need innovation, in the acquisition process, in the technology and services they buy or both.

The federal procurement expert said the results of the survey were not surprising.

The expert said too often agencies are satisfied to continue with the status quo because being innovative requires more work and more risk.

“The larger piece to all of this is you can’t turn the Titanic easily, and the government is not set up whether around acquisition or finance or human resources or IT to ‘innovate’ quickly,” the expert said. “The resources just aren’t there. If you had a project and wanted to pitch your executive with options, folks may want to do it, but to actually do it right, you will have to devote resources that aren’t there. Other offices will not give up their resources for something that is potentially experimental. They are more willing to go the traditional way of doing the work.”

But experts say hope is far from lost. DHS’ Procurement Innovation Lab (PIL), GSA’s Federal Acquisition Service, the Department of Health and Human Services’ Buyer’s Club and several other examples prove that the combination of leadership and desire can create the right environment for change.

Now whether it’s innovation or just bringing existing tools to the front and center, well that’s a different discussion.

Read more of the Reporter’s Notebook