Agencies now have a how-to guide to use agile or modular contracting for IT projects.

The document details eight key principles of modular contracting, highlights possible risks or challenges and offers checklists, templates and other tools to make the move to this smaller, more outcome-based approach easier for agencies.

Federal Chief Information Officer Steve VanRoekel and Office of Federal Procurement Policy Administrator Joe Jordan released the guidance Thursday as part of the 18-month anniversary of the 25-point IT reform plan.

Shift from ‘bloated, multi-year projects’

In a blog post, VanRoekel and Jordan said the guidance “encourages agencies to shift away from the bloated, multi-year projects so common in the past to a more nimble approach. The guidance provides our IT, acquisition, finance and program officials practices for how they can, working together as part of an integrated program management team, break investments into more manageable chunks; eliminate the costly lag between when the government defines its requirements and delivers solutions; and begin delivering workable solutions shortly after contract award.”

The modular approach requires agencies to complete sections of the program frequently — every three-to-six months. VanRoekel and Jordan say this also will hold contractors more accountable for keeping projects on track.

“[B]y breaking investments into smaller chunks, agencies may be able to drive more competition — including small businesses that might not have been equipped to compete for the massive, multi-year projects of the past,” they wrote.

The Office of Management and Budget has talked for several years about moving toward agile development. For instance, the OMB paused 23 financial management projects in July 2010 to ensure they were meeting their development milestones. OMB ended up moving several of them to a modular approach.

Touting TechStat

The administration’s TechStat sessions also focused on changing the way agencies develop IT projects.

“Our goal is to see many examples of success across the government and we are asking all agencies to assess and adjust their capital planning and investment control and acquisition process to more explicitly incorporate modular approaches,” VanRoekel and Jordan wrote. “Over the coming weeks, we will work with the agencies that already have had success to meet with other agencies and share their insight. We will also review agency progress as part of OMB Portfolio investment reviews (PortfolioStat) and acquisition reviews of systemic strengthens and weaknesses (AcqStats).”

The modular guidance outlines the key principles of this approach such as the concept of share-first, the communication between IT, contracting and the end users, and the need to define performance measures and outcomes early on in the acquisition development process.

Agencies also have a list of four broad risk areas: integration, communication, outdated risk-management processes, and the acquisition and workload schedule.

The document includes a checklist for aligning contracting practices with modular strategies, a sample template for modular service-level agreements and tips for using performance work statements in agile acquisitions.

Easier to innovate

“From an IT perspective, modular development allows agencies to test the probability of the successful implementation of solutions in shorter time periods, which better positions agencies to adopt new innovative technologies,” the document stated. “Successful organizations use modular approaches to define high-level requirements, and then continue to refine their needs through an iterative process that includes continual engagement and collection of feedback from stakeholders, particularly from customers, until work is completed. To minimize risk and maximize the success of the deployment, major investment enhancements or capabilities are completed incrementally. This includes a prioritization of critical requirements and functionality that will deliver features for customers.”

From an acquisition perspective, the guidance says modular contracting balances the need for quick access to new technologies and the risk of implementation.

“This approach provides for the incremental delivery, implementation and testing of an investment,” the document stated. “A modular approach is one of many methods that may be used by federal agencies to acquire major IT investments. The acquisition may be achieved through a single procurement, or multiple procurements, but should balance the government’s need for fast access to rapidly changing technology and incentivized contractor performance with stability in program management, contract performance and risk management.”

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