Corporate execs tell White House about benefits of contests

Federal officials sat through an eight-hour workshop on Friday and discussed how to play games -- sort of.

The White House brought in corporate executives to teach government policymakers how to solve the nation's problems by offering prizes to people and philanthropic projects with the best ideas.

The session expands recent efforts to galvanize the federal workforce through online competitions and to release federal statistics so developers can vie to build applications that, for example, are more useful than traditional federal budget documents.

Case in point: The Sunlight Foundation, a government transparency group, will award a $5,000 prize to the programmer who can produce the most informative graphic using figures in the federal budget or off the USASpending.gov website, a searchable database that tracks federal contracts.

"This is not the government building these apps from scratch," federal Chief Information Officer Vivek Kundra said in an interview. "It's third-parties building [what] we couldn't even imagine."

One panel at the summit focused on so-called open grantmaking, which is typically an online campaign that taps the wisdom of the general public to decide who should receive grant money. The public-private forum was held in an auditorium at the Housing and Urban Development Department, where participants sat at intimate round tables decorated with balloons and bouncy balls. The setup fostered informal conversations among the attendees, who were invited by the White House and the Case Foundation, a philanthropy that donates to projects aimed at spurring civic action and connecting people through technology.

"It is scary. It will have you and your agencies staying awake at night," said Claire Lyons, manager of global grant portfolios for PepsiCo Foundation, the philanthropic arm of the giant food and beverage company. "But today's success is not about having control of everything but about how you share it."

The foundation's Pepsi Refresh Project will award more than $20 million in grants in 2010 to initiatives that receive the most online votes for being likely to improve communities.

"We would not do this unless the numbers -- the data -- told us that this is what has to happen," Lyons said. "We did not know exactly how to do it. It's OK. You don't have to be experts."

In 2009, President Obama announced a national innovation agenda and called on agencies to harness the insights of people inside and outside government by using tools such as online contests. This year, a presidential directive that laid out steps for agencies on engaging the public more formally ordered officials to determine how to legally coordinate prizes. A policy framework has been developed and was issued to agencies on March 3, providing guidelines on using federal funds to organize and award prizes.

Grants and cooperative agreements are among the acceptable financial instruments for awarding prizes. Either tool potentially could be used as a cash prize for a competition.

General Services Administration officials said on Friday they are acquiring at no cost an app agencies can use to run contests. Web services firm ChallengePost will provide the tool, which will be available in July. The December directive required the government to offer departments a Web-based template to coordinate challenges and prizes quickly and easily. First lady Michelle Obama and the Agriculture Department are using ChallengePost's platform for the online nutrition campaign Appsforhealthykids.com.

The Education Department is testing an online tool it might use for conferring prizes. The Open Innovation Web Portal asks entrepreneurs, the education community and funding sources to brainstorm solutions for boosting academic achievement. Registered users, including teachers and other members of the public, post ideas, comment on submissions and rate solutions. Spencer Trask/VenCorps, one of the firms that bid on the GSA contract, donated the portal to the Education Department. The purpose of the online forum is to identify the most promising programs for future implementation, officials said.

Separately, the department soon will request applications for funding to support the development of other innovative approaches to education. "People are really nervous and I think they're scared about putting their ideas up [on the portal] before they have to submit their applications," Jim Shelton, assistant deputy secretary for innovation and improvement at the Education Department, said at Friday's event. He added he is interested in observing how behavior changes in the online community after applications are in.

Agencies are permitted to support activities that benefit the public with grants as long as the arrangement does not buy goods or services for the government. For example, agencies cannot run their own contests with grant money, but they can give the funds to be used as prize money to a nonprofit organization that is sponsoring a contest. In particular, the laws governing discretionary, competitive grants give agencies some wiggle room by not specifying how the money must be distributed.

The Energy Department recently disbursed stimulus grant money to support the nonprofit X Prize Foundation, which is coordinating a contest that will award $10 million to teams that develop vehicles which can travel on more than 100 miles per gallon.

At Friday's event, Kundra said government prizes will be a success, not simply a neat idea, when they are funded through annual budget line items, in addition to the creative use of grantmaking and contracting.

The Obama administration has begun experimenting with competitions. Nancy Fichtner, fiscal program support clerk at the Veterans Affairs Department's Medical Center in Grand Junction, Colo., submitted a deficit-reduction proposal during a governmentwide contest last year. Her idea to cut health care costs in the fiscal 2011 budget won, and she met with Obama in person.

The president called on federal employees in 2009 to submit ideas to a secure website for trimming federal spending. The winning submission would be included in the fiscal 2011 budget. Fichtner suggested VA allow patients at medical facilities to take their prescription drugs home after they are discharged instead of throwing the medicine away, a move that would save the department $3.8 million in fiscal 2011.

"We're very encouraged by how the federal workforce has responded to the contests that we've done," federal Chief Performance Officer Jeff Zients, who authored the prize memo, said in an interview with Nextgov.

Zients said he expects agencies to replicate some of the competitions described on Friday. In particular, pharmaceutical company Eli Lilli has successfully used incentive mechanisms to drive product development, he noted.

This is not the first time the White House has requested the assistance of corporate America in modernizing the business of government. In January, Obama hosted a conference attended by the chief executive officers of Staples, Microsoft, T. Rowe Price and other companies, and senior federal managers picked their brains for tips on how to use information technology to deliver citizen services better.

"There's been a productivity boom in the private sector. Now the government is behind," said Zients, who gave opening remarks at the event. The January forum focused "on the key role that technology has played on productivity in the private sector and what can we learn from large-scale IT about customer service . . . so we can begin to close the gap," he told Nextgov.

"This is an effort that's focused specifically on the prizes," with the goal of accelerating innovation, "but both of them are about reaching beyond Washington, D.C., to bring the best ideas in," he said.