Buy vs. build debate for software heats back up with letter to White House

More than three dozen technology companies told the Office of Management and Budget it’s time to end the buy versus build debate for software. Three industry groups and 44 technology companies wrote a May 26 letter pressing the White House to make clear to agencies that they should follow this long-held requirement of buying commercial software first so they can take more advantage of private sector innovations.

Retired Rep. Mac Thornberry (R-Texas), the former chairman of Armed Services Committee and now a member of the Silicon Valley Defense Group advisory board, which signed onto the letter, said the letter is an extra push that agencies need to give preference to commercial software.

“For a long time, you would have specific software connected to a specific piece of hardware, and you just had to keep that up. But certainly technology and our dependence upon software has changed,” Thornberry said in an interview with Federal News Network. “What also has really developed is the innovation in the private sector, where in so many areas the private sector is ahead of the government. My big fear is that if we don’t take advantage of this private sector innovation, we are losing our fundamental key advantage in great power competition — the innovation of the private sector.”

The Silicon Valley Defense Group, the Alliance for Digital Innovation and the Alliance for Commercial Technology in Government, along with major government contractors like Salesforce, Splunk, Palantir Technologies, DataRobot and dozens of others, are asking for OMB to issue a memo to “make certain that the existing statutory requirements for commercial preference are followed. We also encourage the administration require any software or technology acquisition include the opportunity for the private sector to participate in live technology demonstrations alongside any custom-built options. Ultimately, the best solution should always win.”

The requirement and push for using commercial software is not new by any means. The Federal Acquisition Streamlining Act (FASA) of 1994 is widely considered the law establishing this concept of a strong preference for commercial products and services. Over the years, federal government use of commercial products has been mixed. There are agencies like the Air Force or the U.S. Citizenship and Immigration Service who have embraced commercial software through DevSecOps and agile processes.

At the same time, other agencies, such as the IRS or the Social Security Administration, who maintain mission-critical legacy systems tend to hire more software developers.

OMB memo would create urgency

The companies called OMB to ensure agencies are doing “appropriate market research” ahead of any solicitation to compare the potential cost and other benefits of commercial and custom-built applications.

Thornberry said the Biden administration must establish a sense of urgency among agencies to do more to take advantage of commercial software.

“I’m informed by Eric Schmidt [founding member of the Defense Innovation Board and former CEO of Google] and the work that he’s done in various commissions and boards, where he’s really argued that government needs to improve its software expertise. I’m sure he’s right about that because there is limited expertise in the government,” he said. “There’s a reluctance to take that leap and take something that’s commercial if it doesn’t have all the bells and whistles that somebody thinks it needs. The way I see this letter is really twofold. It says this is the requirement, implement it. And secondly, do it now. I don’t get a sense of resistance from Biden administration as a matter of policy. For example, I think the Deputy Secretary of Defense Katherine Hicks understands this very well. But still agencies need to take the authorities and actually implement them. That requires a little extra push.”

Thornberry said an OMB memo is just the first step. He said, similar to Congress, the administration would need to apply oversight through the budget process or through other approaches like the President’s Management Council, so the requirement isn’t just receiving lip service.

Thornberry recognized overtness of the letter coming from industry software providers asking for agencies to buy more commercial software.

Reducing the burden on new companies

He said the issue, however, is bigger than just companies wanting to make more money.

“When [former Sen. John] McCain (R-Ariz.) and I became chairmen of the House and Senate Armed Services committees, he’s the one that really suggested this Silicon Valley Defense Group be developed. It’s a nonprofit and it tries to bring together government, the technology sector and the investment folks. If you don’t get the money, these companies can’t stay in business. So I started dealing with them right at the beginning when they were formed because I believe that if we can’t take advantage of private sector innovation then we can’t compete as well as we should in the great power competition,” he said. “Often what happens with small companies, with companies that aren’t used to dealing with DoD, that they’ll just go do other things. So that’s really the impetus. It goes back to what I mentioned, if we don’t take advantage in government of this private sector innovation, we are never going to be able to compete with China, or much less have an IRS or the CDC that we need to deal with the country’s problems. So I really think it’s the missions of these agencies that is paramount and we can’t make it too hard to do business with the government.”

Congress and agencies, through tools like Other Transaction Agreements (OTA) and Commercial Solutions Openings (CSO), have aggressively tried to reduce the burden of working with the government. A recent Defense Department inspector general report on DoD’s use of OTAs found it’s not clear whether the Pentagon is getting the access to these “innovative” companies as initially proposed for the reason to use these acquisition tools.

Despite the lack of transparency around OTAs and similar approaches, Thornberry leaned back on the old adage, don’t let perfect be the enemy of good enough.

He said agencies must realize that the 80% or 90% solution from a commercial provider will impact their mission more quickly than waiting for the 100% solution, which in many cases rarely comes.

“For too long, the government has prioritized building its own technology solutions over procuring commercial products,” the letter stated. “These solutions, whether developed directly by a federal agency or with a government contractor, have an incredibly high failure rate – more than 90% in some cases. They are almost always more expensive on the front end, difficult and costly to maintain, and quickly become obsolete. That redundancy is an immense cost to the taxpayer and fails to empower civil servants who want to improve and to best serve their agency’s mission.”

Thornberry said he’d like Congress to get involved too with hearings or other oversight.

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