What if the federal government wanted to find new ways to recycle waste — in space? Where would the military turn if it wanted to completely rethink the design of the medical stretcher to quickly transport wounded troops out of combat zones?

Increasingly, agencies are using a new tool at their disposal. Instead of issuing RFPs, they’re issuing challenges.

And according to a new report from the White House Office of Science and Technology Policy, agencies that have jumped on the challenge bandwagon have begun to “reap the rewards of well-designed prizes integrated into a broader innovation strategy.”

The OSTP report focuses on how agencies have implemented challenges, contests and prizes since agencies were granted new prize-giving authority in the 2010 America COMPETES Reauthorization, which President Barack Obama signed into law in January 2011.

The law gave agencies new authorities to undertake competitions and — perhaps more important — to issue prizes to the winners.

The expansion of challenges followed March 2010 guidance from the Office of Management and Budget and the launch of Challenge.gov, an online portal to host agencies’ various contests. The online portal now hosts 150 prizes from 40 agencies.

More ambitious goals

The report lists a number of benefits of offering prizes. For example, agencies can create wide-reaching “ambitious” goals and seek a number of responses, without necessarily predicting which submission will be the most successful — a contrast to traditional contracting.

“Contracts and grants are awarded based on proposals for future work, forcing agencies to assess merit based on past performance and credentials,” the report noted. Prizes, if they’re well-designed, “empower new, untapped talent to deliver unexpected solutions to tough problems,” the report states.

Prizes also help the government reach beyond what the report called the “usual suspects” in typical procurements.

For example, the Air Force Research Laboratory issued a challenge seeking new ways to apprehend fleeing vehicles. Current methods, such as spike strips, must be pre-positioned, something that police officers or military security officers don’t always have time to do. The challenge garnered hundreds of responses, including one from a retired mechanical engineer in Lima, Peru, who submitted the winning idea: a super-fast remote-controlled vehicle able to slide under a fleeing vehicle and inflate an airbag which lifts the car.

The lab paid $25,000 for the rights to the wining idea and set about building a prototype.

Challenges not always the ‘right tool

The report singled out NASA and the Departments of Defense and Energy as early and successful adopters of challenges.

In August 2011, OMB issued a fact sheet to agencies laying out guidelines for optimizing the use of agency-led competitions.

Since then, the Health and Human Services Department “has been at the forefront of agency implementation efforts,” the report stated. HHS granted the authority to issue prizes to the heads of all of its operating and staff divisions and developed agencywide judging standards.

HHS is also home to the “most ambitious” project launched under the new prize authority — the $5 milllion Investing in Innovation Initiative, which aims to speed health IT breakthroughs.

The General Services Administration, for its part, launched a separate contract vehicle in July 2011 to help agencies develop new prize platforms.

But prizes are not necessarily “the right tool for every problem,” the report noted. David McClure, GSA associate administrator of Citizen Services and Innovative Technologies, told Federal News Radio in October he thinks of challenges as “another tool in agencies’ toolboxes,” rather than a wholesale replacement for traditional contracting.

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