An acquisition wish list for Santa
Keith Trippie, a former Senior Executive Service member executive director for the Enterprise System Development Office at DHS, pens an acquisition wish list for...
By Keith Trippie
Commentary
Dear Santa,
I am writing to you early this year, as I know you are busy getting Rudolph and crew in shape for the big night. And since kids in Halloween costumes aren’t roaming the streets in my neighborhood, I hope I am early enough to get your ear on something. 
The General Services Administration is doing some creative programs through its 18F program, but more work remains. Technology is changing every six months and the Federal Acquisition Regulations (FAR) has not been updated to take advantage of these innovative, high-value business solutions. Cloud, agile, mobility, Internet of things, data consumerization and analytics are just a few of the customer-centric IT trends shaping the global economy.
Customers at home or outside of work are reaping the benefits of these new technologies. Today, bootstrapping entrepreneurs and folks going through incubation labs don’t have to build infrastructure and can get new capabilities to minimal viable product in months, at a fraction of the cost compared to just 10 years ago. Consumers can buy almost anything they want within minutes via a user friendly website or mobile app. Patients can receive hospital quality care on a plate of glass, cars will soon be driving without a human in the driver seat, etc.
And I want the same for the federal government — an at-home user experience with IT.
So for my wish list this year, Santa, I would like a new Red Rider and a sweet new computer suit. I almost forgot … I would like to ask for the following, and we can start with the easy ones first:
- Government buys services rather than assets: IT today has matured to the level where services for complete stacks of offerings are now common place in the commercial space. I think the latest numbers for cloud spending is more than $150 billion annually and only growing. Feds buy services for labor, janitorial services among others, but the model has not caught on for IT computing services.
There are several reasons for this limited adoption, including the cyber posture of those services, there is no easy contract vehicle, the ever-challenging culture change and more. The changes in the current and future budget climate are challenging those cultural norms. FedRAMP, continuous monitoring and continuous assurance are changing cyber paradigms.
- Use social media to streamline the process: Instead of only releasing the request for information to select companies across GSA Schedule 70, open it up and send it out to the world — you know, crowdsource the request.
Use some of the best-of-breed social media tools to manage the transaction so it reduces the review cycle time, provides analytics and provides some great new ideas on how to solve the problem. Then take those ideas, update the statement of work and get it out to competition.
Another quick idea for how to leverage social media is to take some of the current challenges to the people: buying agile based development and cloud/service based contracts. Why not issue a challenge via social media (being used today to discover other solutions) and ask people of earth to provide helpful, if not prescriptive guidance that could be added to FAR.
- No-cost contracts: share-in-revenue/share-in-savings. This is an interesting concept and a few companies across town are wading into this space. How does it work? I thought you would never ask.
- Mandatory reuse of all new contracts worth more than $5 million in total contract value: Reuse across contracts is only a fraction of total contracts awarded. Today, organizations wanting a capability and want to have a vehicle that can be used by more than themselves or their organization typically have to work it through strategic sourcing. Good idea, but the time it takes to get consensus defeats the purpose.
As a result, folks avoid setting up agency or federal wide contracts. What does this mean? Every year billions of dollars are spent buying the same things, federal buying power is diminished and citizens don’t receive the maximum return on investment. Others in that agency or other agencies can reuse that vehicle if the scope of work is similar AND the agency that manages the contract is OK as the new order will not cause the contract to hit the ceiling too soon. No muss, no fuss.
The government should publish all existing sharable contracts in an easy to find service catalog — think of a simple eCommerce type site. Any fed who wants to do a contract that only includes them as the scope of work has to gain approval from senior management at their parent agency. And if it’s above, say $50 million during the entire lifecycle, the agency has to receive approval from Office of Management and Budget.
OMB and agencies could incentivize support for this approach by publically recognizing any employee and/or agency who creates sharable contracts and any person or agency who re-uses those contracts rather than creating new ones.
- Top 10 software vendors based on federal sales get awarded a five-year contract for all you can eat with 5 percent uplift over current total. Yep that’s right, not a typo. The money federal staff and industry spend on administrating existing or awarding new contracts is very high, with nominal value. Not to mention the impact on schedules hunting down what license keys an agency owns or getting caught at the end of the year with a true-up. This approach benefits the government because it eliminates administrative overhead, leverages the full portfolio of offerings by the vendor and let’s face it, those costs will be paid either way. Benefits to industry also are clear: Those large software providers get revenue over the next five years, reduce their administrative overhead and plenty of runway to figure out the pricing and revenue projection models (think shareholders) for a service based, consumption model that will be fully in vogue in five years.
- IT staffing: OK, we have addressed administrative overhead, time to market and cost to market for new compute services and maximizing our buying power, now how about the labor. IT staffing in the 21st century could provide a unique model to solve this problem.
This is a little out there, so bear with me: Imagine, if you will, a platform where federal staff would go and provide a short summary of the business need required including performance objectives, timelines and cost estimates-exact science on this is not required in this model. The point of contact would also choose the types of resources and amount of estimated hours to achieve the result — the platform would have a list of best practices, other recent bids of like needs, to help the federal employee get their scope right. Within the platform talent from across IT Schedule 70 providers would bid on the work required.
The talent, if you will, will have ratings (stars or “likes/dislikes”) based on previous work, types of work accomplished, upcoming availability and a short overview of their skill sets. Talent would bid their approach to solving the business problem, hours and labor rate to accomplish the task(s). The bidding process and transactions would be transparent to all. The federal employee would review the bids from talent, be able to speak with the talent that more closely meets their needs and then make a decision on the best person for the work, based on talent, ratings, labor rate and other factors, and the federal employee would then be able to rate the performance of the talent on their work; just like you would rate a plumber or air conditioning service at home.
Recommendation: Have a forward leaning agency kick the tires on this approach via a small pilot. And if it works, add more cowbells and other agencies can build off that pioneering federal agency.
- Finally, I would allow all Senior Executive Service (SES) members to order off a credit card up to $500,000 and GS-15s up to $250,000, their call on who they chose to perform the work. Have them take training to ensure rules are followed, and hold them accountable. This will significantly help programs get started while funding and larger contract actions get established.
This is about a business model change, rather than technology that is harder to implement. But the government has implemented similar versions of this model with office supplies, telecoms and enterprise license agreements for software and hardware; as well as for how government buys commodities. Moreover, this approach has been working successfully for over a decade with millions of consumers, every day, who are taking advantage of eCommerce in the retail, travel and financial marketplaces, to name just a few.
The simplest way to think about this model is “eBay” for compute services, including infrastructure-, platform- and software-as-a-service.
This approach would reduce time to market and cost to market for new services, maximize federal buying power, provide an innovation on-ramp for new services not envisioned when the contract was established, ensure competition each day vice typical 12-to-18 month procurement cycle, eliminating administrative burden on federal and industry staff and increase computing choices.
Several agencies are looking at this model, and nothing in FAR prohibits this from being implemented.
Recommendation, a federal agency just issue the first award and take a chance. Even though it won’t be perfect, we will all learn from it. Others will follow, trust me on this. I would expect all federal agencies to have some version of a cloud broker contract in place by 2020.
The government high levels the business objectives and technical objectives in a very short statement of objectives-anything over five pages is probably too much prescription. Industry proposes a solution that meets the needs articulated by the government. So what’s new about that? Well in this model the government does not pay $1 for stand up of the service and doesn’t pay traditional operations and maintenance. Well how then does industry get paid?
Industry gets paid based on a share of revenues collected by the government for services to citizens. Whether it is fees charged for use of recreational land at a state park, a boating license fee or naturalization fees; a percentage off the incoming accounts receivable line sounds pretty fair. Another way this model can work is based on the amount of money government saves.
Examples that come to mind are fraud in citizen benefit services or savings on a new IT solution that replaces a legacy solution. The concept is simple for every dollar saved, industry gets a cut. Some companies are doing this today and a few agencies have used this model. It can work.
Recommendation: 30 percent of all contracts that collect fees, adopt this shared in revenue model by 2020. I’d have an aggressive posture on any contracts that are deployed to identify and eliminate fraud/waste. That target should be at least 50 percent by 2020. No time like the present and with fiscal 2015 just getting started, it’s good time to get started and try this new approach.
I know I am asking a lot here Santa. No doubt these are not easy to deliver on because if they were, they would already be solved. But, anyone that can make it around the globe, on a sleigh pulled by flying reindeer in one night, certainly can lend a hand on this humble request.
OK, so maybe I haven’t been in the “good” side of the ledger all year long.
But, let’s not hold that against our friends in government and industry. There are a whole lot of talented folks within both industry and government who deeply care about the mission of the federal government and are working very hard on our behalf.
They just need a little help along the way.
Thank you Santa and I promise to be better next year … and no, my fingers are not crossed.
Keith Trippie, a former Senior Executive Service member, left the Homeland Security Department in March after spending 11 years in government. The last position he held at DHS was as the executive director for the Enterprise System Development Office within Office of the Chief Information Officer. He’s now the CEO of The Trippie Group.
Other columns by Keith Trippie:
Information to strategy: The future transformation of CIOs
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