2 DHS procurements show how innovation is happening in government

The federal community often talks about the need for more innovation. Acquisition professionals are encouraged at conferences and on Capitol Hill to take “smart risks” as they figure out how best to meet agency mission needs.

The reality is there is a lot of talk and not enough action. That’s no surprise. This risk adverse nature of federal contracting has led the Defense Department and now several other civilian agencies to go outside the normal Federal Acquisition Regulations procedures and use Other Transactional Authority — See this notebook item about why you should be paying close attention to OTAs.

The one way innovation does break through the federal acquisition morass is through leadership. I know it sounds trite to say that, but the evidence at places like the Homeland Security Department, the General Services Administration and even the IRS is striking.

DHS’ Procurement Innovation Lab (PIL) may be the most well-known and revolutionary acquisition approach.

Eric Cho, the Acquisition Innovation Advocate in the PIL within the Office of the Chief Procurement Officer at DHS, said the first step was to address the risk-adverse culture. The PIL conducted a survey and found 70 percent of the people said they aren’t innovating because of fear and culture resistance within their own offices.

“We intentionally chose to take these lower, more grassroot approach to empower these local teams and people and then support them and give them protection so they can make good procurement decisions, so that their lessons learned can be shared across the community. That was our intentional decision,” Cho said at the ACT-IAC Reverse Industry day event on Feb. 21 in Washington, D.C. “We need to find ways to overcome that barrier and slowly, but profoundly change the culture within the procurement community so it can become long-lasting changes.”

The data seems to show innovation evolution is occurring through DHS.

First off, the PIL has awarded 18 procurement projects and currently has 21 more underway.

Polly Hall, the strategy and planning lead for the PIL, said the goal with all of these initiatives is to reduce the time to award so they can deliver mission capabilities sooner.

Hall pointed to two recent examples that show how DHS is trying to meet these goals.

The first is a procurement for a new service management tool, which handles workflow requests such as those that go to an IT helpdesk. DHS wanted to migrate multiple instances from its data center to one software tool in the cloud.

DHS awarded a $58 million contract to Deloitte last summer using a two-phased approach in 42 days. Hall said the agency estimates it saved $13 million as compared to the government’s internal cost analysis.

Hall said phase 1 was a self-certification based on technical evaluation factors, and then phase 2 was interactive oral presentations that lasted 30 minutes.

The second example is for services to modernize DHS’ financial systems.

Hall said the PIL used the Eagle 2 contract. Again, the PIL used a two-phased acquisition that included the self-evaluation and on-the-spot oral presentation model.

She said the entire process from RFP to award took 57 days. DHS hired IBM under an $82 million deal. Again, the PIL helped cut tens of millions off of the government estimate with IBM’s bid coming in $45 million less than expected.

“What was really important here is that they took the evaluation process, streamlined it and required a very collaborative team based approach. They met daily in person,” Hall said. “The contracting officer said the streamlined process was tremendously valuable. She was able to learn from that, it gave her insight for how to accomplish this for future procurements.”

Hall added the contracting officer said the team-based engagement, consensus documentation done in real time with the contracting officer, legal and technical evaluators in the same room “was secret sauce for this procurement.”

Moreover, the PIL’s efforts, which includes 36 webinars over the last two years including one recently that had 700 attendees, aren’t just happening in a silo.

Cho said the PIL created an internal to DHS Acquisition Innovation Advocate (AIA) council to further train the trainers. The council includes acquisition advocates from all the components, who then can bring back best practices or lessons learned, and maybe most importantly, drive innovative concepts down to the contracting levels.

“We measure our progress quantitatively and qualitatively,” Cho said. “Quantitatively, we are measuring time to award and whether we decrease the time while also getting better competition. Qualitatively, it’s more nuanced. We are looking at customer satisfaction, particularly after the award is made so is the solution meeting the mission a year or more later.”

The federal AIA Council, run by the Office of Federal Procurement Policy, also is driving these concepts on a broader scale.

Cho said it’s a forum for agencies to come together, share best practices and solutions as well as case studies.

Matt Blum, the associate administrator for OFPP, said more details about the role the AIA Council can play to promote innovation will come from the administration’s management agenda, which it expects to release more details about in March.

OFPP encouraged agencies to name an AIA in March 2016 as part of its effort to generate more innovations in the acquisition community.

“It was critically important to have support structure for the AIAs and a way for them to interface with OFPP,” he said. “The council meets usually monthly.”

Blum said OFPP also wants to reinvigorate the Acquisition 360 reviews. In the semi-annual regulatory agenda published Jan. 12, the FAR Council said it will issue an advanced notice of proposed rulemaking in April.

OFPP published a memo in March 2015 encouraging agencies to seek customer feedback from contractors and internal stakeholders on how well the contracting process went for specific procurements.

Blum also said OFPP, GSA and the Office of Personnel Management are reinvigorating an initiative called Open Opportunities. The site, first developed by GSA for digital services expertise and now is housed by OPM, lets agencies ask for help from acquisition experts for a short period of time.

“Instead of these experts going on a detail for six months, maybe they can coach a team for a few days,” he said. “The goal is to build the bandwidth by developing talent in the agencies.”

As DHS is experiencing, the only way to change the culture is to start small and prove its value, and then build the talent. Let’s hope OFPP’s actions match its words.

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