The biggest risk in federal acquisition today is not taking enough risks.
Not reckless risks, but deliberate risks consistent with Federal Acquisition Regulation Part 1 guidance.
The largest chunk of U.S. research and development spending, the most significant technological innovation, and its fastest evolution all reside in the private sector. And the private sector has little interest in slogging through the rule-burdened, prescriptive, intellectual-property-devouring federal procurement process. These facts are driving a tidal wave of change in government buying, especially in Defense organizations. Here’s the January 2018 National Defense Strategy:
“We must not accept cumbersome approval chains, wasteful applications of resources in uncompetitive space, or overly risk-averse thinking that impedes change. Delivering performance means we will shed outdated management practices and structures while integrating insights from business innovation.”
Not only is the Pentagon challenged in attracting the most innovative companies in America’s most vibrant business sectors, but our adversaries—like Russia and China—have little acquisition oversight or regulation so they are beating us to the cutting edge. To serve the nation, government needs to buy better and faster. The pressure’s on to shrink lead times, shorten delivery cycles, and flex to innovators’ needs.
Agencies need to buy tomorrow’s solutions and today’s innovations using streamlined and expanded procurement authorities. The urgency of mission needs demands creatively compliant, responsive acquisitions. Taking risks, not just doing business as usual, while focusing on mission outcomes.
For example, government is creating ways to attract and engage new suppliers with new business models. Commercial solutions openings (CSOs) and other transaction authority (OTA), for example, let program and procurement professionals solicit and evaluate bids and negotiate intellectual property rights and contracts much as companies do in commercial markets. The Federal Acquisition Regulation doesn’t apply. Prototyping lets buyers test on a small scale and iterate and collaborate as they go, to more rapidly identify the best solutions to send to full-scale production.
The government workforce is building new skills in buying digital technology, working alongside ‘bots, employing artificial intelligence, and protecting supply chain integrity. They are learning to hack the process, disassembling it and rearranging the parts to make better decisions, embrace and manage risks, solve hard problems, and apply new strategies. Agencies are studying and adopting the cultures of organizations that nurture innovation.
Leading program and procurement professionals are building deep market and supplier intelligence in specific categories of spending, communicating continuously and collaboratively with industry, reducing the total cost of owning and maintaining what they purchase, and brokering new kinds of relationships with nontraditional suppliers. They are learning how to buy agile software services and development in the cloud to replace legacy systems, make services digital and amp up security across the board. Delivery times are now being measured in weeks and months, not years or even decades
At the Pentagon, Under Secretary of Defense Ellen Lord plans to pare the Defense Department’s master acquisition regulations (5000.2) back to the bare minimum—"a couple page outline,” she has said. General Services Administration Administrator Emily Murphy is leading a host of innovations, such as consolidating the acquisition schedules, using robotic process automation and creating a governmentwide e-commerce platform pilot this year.
James Smith, who heads acquisition for the Special Operations Command, recently goaded an industry audience to keep up with him. “If I’m going to move faster, I need you to move faster as well,” he said. “This next generation of acquisition is going to be all about speed.” And Air Force General Cameron Holt has all but hit a $2 billion savings goal by driving category management adoption across his service.
This is acquisition innovation in action. It also is the theme of the 2019 Acquisition Excellence Conference on March 12 in Washington. We are bringing together every project and person I’ve mentioned above—17 sessions in all—to help explain, demonstrate and spread the use of acquisition innovations.
The agenda includes more than 50 innovators from the Homeland Security and Health and Human Services departments, NASA, the National Geospatial-Intelligence Agency, Challenge.gov, the U.S. Digital Service, along with acquisition innovation accelerators such as the Defense Innovation Unit, AFWERX, the National Security Technology Accelerator, National Technical Information Service Joint Venture Program FedTech Startup Studio, Acquisition Innovation Roadshow and more. They will be telling stories of acquisition innovation successes—what works and what we have learned about improving the business of government to meet the needs of government missions.
Ironically, all of this speed, experimentation, rule-changing and pushing the envelope is aimed at reducing risk. When technology is evolving at warp speed, when the most advanced gear is commercially available for anyone to purchase, when our citizens and adversaries are capitalizing on our nation’s leading technologies, standing still or buying yesterday’s solutions are the biggest risks of all.
Tim Cooke, the President and CEO of ASI Government LLC, is industry chairman of the 2019 ACT-IAC Acquisition Excellence Conference.