After a year and a half of development, the Department of Health and Human Services is ready to move its Buy Smarter Initiative into the production phase. Renamed “Reimagined — Buy Smarter,” it uses artificial intelligence to analyze large amounts of data to help with price comparisons and other money saving ideas.
“Buy Smarter is an innovative opportunity for HHS to look at our category management, break down some stove pipes, and consolidate our requirements across the department,” Lori Ruderman, senior advisor and co-lead for Buy Smarter, said on Federal Monthly Insights — Artificial Intelligence/Machine Learning. “We’ve learned that within HHS, all of our different operational divisions and staff divisions, buy many of the same exact items, but they’re buying them on separate contracts, they’re duplicating effort, and missing out on tremendous economies of scale.”
In response, she said the department is leveraging new and emerging technologies such as artificial intelligence, robotics process automation and natural language processing. HHS spends $24 billion in goods and services every year to give its acquisition workforce “real-time, departmentwide data to consolidate requirements, get economies of scale and eliminate a lot of redundant contracts,” she said.
This year HHS will introduce 18 steps of technology for purchasers. The program has a $49 million multi-award Indefinite Delivery, Indefinite Quantity contract for a catalog of new and emerging technologies.
“And that contract was led out by the Program Support Center within Health and Human Services,” Ruderman said on Federal Drive with Tom Temin. “And we are hoping to get a very large number of vendors who can provide these catalog services not just for reimagined Buy Smarter, but the contract is designed so that it can be scaled and shared across HHS and potentially across the federal space.”
She said the idea is that the Program Support Center us a shared service provider specializing in assisted acquisitions governmentwide. HHS decided to create a new contract vehicle instead of modifying an existing one, because the Program Support Center was getting a lot of demand from customers seeking new technologies. Contracts have a tendency to become outdated even before being awarded, she said.
When it comes to AI, HHS is expecting combination of components such as machine learning, natural language processing and predictive analytics, all working together.
“We know that in the acquisition environment, everything is come out of the paper system. There’s a lot of copying and pasting from I think I’ve heard anywhere from 36 to 48 different systems,” she said. “And so we’re looking to take advantage of [robotic process automation] to pre-populate a lot of that so that our contracting officers can use their brains to do what we’re paying them to do and not spend all their time copying and pasting.”
Ruderman said different operational and staff divisions within HHS, including the National Institutes of Health and the Food and Drug Administration, are buying some of the same items. It means the department is losing out on economies of scale and getting disparate pricing.
“And so about a year ago, we fed in 18 months-worth of HHS-wide contract data — 97,400 contracts — into an article intelligence solution, built some algorithms, did a proof of concept of 10 product categories,” she told Federal News Network Executive Editor Jason Miller. “And what we found was prices varied across the board and all 10 categories; copy paper — [a] price difference of $27 a case to $59 a case.”
For 2019 and 2020, the initiative’s leadership are recommending pursuing three categories of spending: medical and lab supplies, software licenses and professional services. Ruderman said her office is breaking up some work groups that will pay attention to these areas and work on consolidated contracts to create shared opportunities, economies of scale and to eliminate redundant contracts.