Analysis: Three IT Procurement Problems Worth Solving


If agencies want to tap the expertise of innovative tech startups, they have to fix the process for doing business with them.

The arduous process that small technology vendors must go through in order to contract with government agencies is preventing government innovation when we need it most. As the CEO of 12-person tech firm that recently went through the process, I have experienced this first hand.

While a partnership with the federal government is unusual for a company of our size, we got lucky. We were introduced early on to an internal advocate who saw the value of our solution to transform paper backlogs into digital data at the Food and Drug Administration -- performing weeks of manual entry in hours to update a critical drug safety database. As we learned, even with a strong advocate, the procurement hurdles were significant. After getting proof of concept in two short weeks, it took two more months to prepare the paperwork for a security authorization to operate (ATO) and five months for a stop-gap contract. Even after clearing the original paper jam, we are without a contract to handle the additional demand that is now flooding our way.

So where should government begin when thinking about how to streamline the process? Here are three observations:

  1. Security review is confusing and cumbersome: Our journey began with security.  We never questioned the value of a thorough review and jumped on the opportunity by crafting a 500+ page security plan according to the FedRAMP template -- getting in line behind other cloud-based companies hoping to complete their clearance by June 2014. After a process that required us to use significant resources from our small team, we discovered that we didn't need to be in that line, but in another one. Even now, no one can really tell us what line we are supposed to be in, creating ongoing confusion.
  2. Complex contracting offers no simple path for a relatively small project: Because of the relative urgency of the paper-jam (reducing the backlog was needed to more quickly identify adverse drug interactions), speed was of the essence in the contracting phase. The best available option was to subcontract with the existing prime contractor, a business process outsourcer we had competed against to win the business and whose services Captricity was in part replacing. While this option was suboptimal for all parties involved, under the current contracting practices, this was the only available path forward. The contracting process continues to be a challenge for us, even after the delivery of a project hailed as a significant innovation for the FDA.
  3. Existing procurement models don’t work for new technologies: Despite our success, and despite many other groups within the agency wanting to use our services, we remain challenged by the lack of a contracting vehicle that can procure software-as-a-service (SaaS) as a subscription. The fact that our solution lives on top of Amazon Web Services, an approved vendor familiar to federal agencies, helps validate us and move the conversation forward. But even with that boost, we are aware we fall outside of the mainstream of government procurement processes. We look forward to a time when the government will be able to easily procure cost-effective, innovative and scalable solutions on demand.

We are proud to be able to count the U.S. government as a customer and we hope that our experience can help ignite a wider conversation about technology procurement reform for the federal government.

Kuang Chen is the CEO and Founder of Captricity, the data capture firm that works with government agencies, commercial businesses and NGOs to reduce the number of hours spent on manual data entry by converting handwritten paperwork into usable digital data.

(Image via Singkham/