Making best-in-class contracts better for innovation

In recent years, federal acquisition policy and practice has been a competition between two different priorities: Efficiency and innovation. Instead of balancing these priorities, innovation has taken the backseat, denying agencies access to companies that can deliver transformational solutions.

The Office of Management and Budget and the General Services Administration have an opportunity to implement several straightforward changes that can address these competing priorities.

A recent report from the Government Accountability Office provided several recommendations for OMB and GSA to improve their category management initiative, which oversees efforts such as the best-in-class contracts (BIC). While most of the GAO recommendations focused on improving guidance around category management, better defining requirements, acquisition workforce training and cost savings, what was left unaddressed was how OMB and GSA can improve the most important outcomes — delivering the best and most innovative product and service solutions to agency customers and citizens.

Category management has pushed government agencies to buy more like a single enterprise. This focus has prioritized driving savings and efficiency by eliminating redundancy by developing more useful governmentwide acquisition contracts (GWACs), such as BICs. However, having a too narrow focus on streamlining and scale sacrifices the more important priority of attracting more innovative, non-traditional companies to the federal market. That focus — long championed by organizations like the Alliance for Digital Innovation — has pushed the government to leverage inventive acquisition authorities, prioritize commercial capabilities over onerous and restrictive requirements, and encourage speed in both the pilot and production phases of IT acquisition.

Now is the time for OMB and GSA to use the scale of the BIC solutions as an accelerant and preferred pathway to continuous innovation and improved mission delivery through commercial tech. Doing so is vital to ensure that the vendor pool involved in these contracts are constantly producing and providing the actual best-in-class solutions that customers deserve. The pace of change of solutions delivery mirrors that of technology — imagine selecting a technology today from a group that was pre-approved five years ago. No 5G, no blockchain, no edge computing, no artificial intelligence. Too often, vendor pools get set at the rollout of a BIC solution (or, surely, in other GWACs) based on the initial assessment and evaluation. And, absent any compelling circumstances or rules defined by the contract manager, the initial vendors remain on the contract for its useful life, even if they rarely bid on or win work against that vehicle.

For those vendors that did not make the initial cut, or for innovative companies new to the federal market, it can be incredibly difficult to move on to these GWACs and compete for work. Therefore, the current administration and use of these GWACs provide few incentives or opportunities for driving fresh capabilities into these large scale procurements.

Going forward, there are several steps OMB and GSA can take to “build BICs better” by updating their operations and shifting the focus of those vehicles to support small businesses, increase competition and enable greater innovation in the vendor base.

  • Size: Cut down the size of the initial applicant pool, but simultaneously tighten up the requirements to stay on the contract or else be off-boarded. Make the off-boarding criteria strict and apply it consistently and on a regular basis (i.e. clear out those not leveraging or actively engaging with the contract using transparent metrics and on a frequent basis).
  • Readiness: Create a training program for small businesses (possibly hosted in partnership with the Small Business Administration and BIC leaders) to make them “on board ready” for these GWACs and, potentially, update guidance to make this training a requirement for a company to be considered for an onboarding opportunity.
  • On-ramps: Decrease the time between on-ramps to ensure that a constant stream of smaller, innovative companies are challenging the incumbents to continue to deliver transformative solutions. Also, make it easier for companies that grow and transition out of the initial size designation at contract entry to migrate to an unrestricted contract, so that competition is actually happening among true small and mid-size businesses throughout the life of the BIC.
  • Debriefs: Expand the ability of those companies wishing to on-board by expanding the debriefing process for those failing to make the initial cut to identify those specific deficiencies that, if corrected, would increase the chance of being selected for an on boarding opportunity.

These new “build BICs better” recommendations will improve these GWACs through easier access to new and innovative commercial solutions for their customer base. As we move into a new administration and new budget environment, agencies can continue to benefit from the scale, cost savings, and uniform requirements these government-wide vehicles offer. At the same time, updating outdated policies and shifting acquisition priorities to focus on constant onboarding and access to new solutions will support small businesses, spur faster IT modernization, and ultimately drive smarter and more effective outcomes for federal agencies and citizens.

Matthew T. Cornelius is the executive director of the Alliance for Digital Innovation (ADI).

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