Agencies Are Increasingly Reliant on Industry for Innovation

Report chronicles the need for better collaboration between government and the private sector.

Federal research and development funds have been slashed by 15 percent since 2010, particularly in defense, which leaves today’s agency acquisition professionals more dependent than ever on industry partners for innovation, says a report released on Tuesday.

“This creates a need for government to get creative, as it is no longer in the position to drive key innovations without help from other sectors,” including corporations, academia and nonprofits, says the report, “Innovation Is a Contact Sport,” based on interviews with dozens of federal officials by the nonprofit Partnership for Public Service and Booz Allen Hamilton.

Examples of successful collaboration include the Veterans Affairs Department’s applied physiologist at a New York hospital who tested a bionic walking-assistance system created by an Israeli company that will soon allow U.S. veterans with spinal cord injuries to wear a robotic exoskeleton.

Also cited is an Energy Department laboratory metallurgist in Oregon who invented a new coronary stent and teamed with a medical device manufacturer to bring to market in 2010. It has become the leading stent in the world.

“We learned how they have been successful by collaborating with nongovernmental partners, managing risk, allowing for failure and changing agency culture,” the authors wrote. “We take these lessons and identify ways they can be expanded across government.”

More than 70 percent of federal officials interviewed said agencies that “harness innovation view risk-taking and smart failure as necessary elements of their agencies' culture. There are ways to structure procurements that allow for risk-taking, innovation and cost savings,” the report said.

One cultural change mentioned is the open-office layout arrangement in use at an Energy agency that seats program directors, lawyers and acquisition experts near one another for easier collaboration.

Another promising trend in the government is called the “reverse industry day. Homeland Security Department staff, for example, in November, participated in private-sector discussions about how companies decide to bid (or not) for contracts and how access to information affects industry processes.

To spread collaborative innovation more widely across the government, the report recommends that agencies:

  • Involve partners as early as possible, as allowed by the Federal Acquisition Regulation;
  • Expand industry days to encourage agency staff to build partnership across sectors;
  • Expand the Office of Federal Procurement Policy’s Acquisition 360 feedback process to include iterative reviews and checkpoints through the entire acquisition process;
  • Seek ways to quickly pivot or move on building milestone reviews and sunset clauses throughout the contract lifecycle to identify underperforming contracts;
  • Work with Congress and the Office of Management and Budget to expand existing authorities in the FAR and elsewhere to specify a range of tools government can use for more modular, or staged, contracting;
  • Train acquisition professionals in partnership building and other skills that foster innovation, including critical thinking, business acumen, teamwork and leadership;
  • Prioritize filling the position of each agency’s chief procurement officer and hold that person accountable for establishing a culture of innovation.

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