Small Changes Could Make a Big Impact in Federal Acquisition

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Thinking differently, especially about how to pick procurement professionals, could lead to greater innovation.

Dan Helfrich is a principal at Deloitte Consulting and leads its federal government practice. Follow him on Twitter @dhelfrich21.

A study in the New England Journal of Medicine revealed how a set of small changes a group of hospitals made—such as everyone in the operating room introducing themselves and their role in the surgery—dramatically improved patient care. These study results made me think of what small changes the federal government could make in how it buys goods and services that could bring greater innovation and boost mission outcomes.

Here are three small changes to federal procurement that could lead to big impacts for the government:

Procurement Toward People Not Resumes

Some contracts continue to have the same experience and education requirements year over year. But some of the talent you need may be younger, more skilled at digital or mobile tech. These long-standing, narrow evaluation methods requirement may mean your agency is missing out on innovative, critical talent.

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Take Facebook Chairman and CEO Mark Zuckerberg, for example. He has less than 13 years of formal work experience and no college degree. He has, however, been doing computer programming for more than 20 years, developing programs and using machine learning since high school.

Obviously, Zuckerberg is a bit of an extreme example, but my point is there are a lot of young, digitally savvy people—like the 17-year-old who won the most bounties at the recent Hack the Air Force event—who have the tech chops but maybe not the formal career history or education. But that doesn’t mean they aren’t what you may need.

How can you tweak those requirements to get the talent and skills your agency needs? Are there specific skills needed to achieve the project’s objective? Is experience at a tech company or a private sector cyber firm that could be of equal or greater value?

Don’t lose out to top talent who have the chops to solve your problems, but don’t have a traditional background. Your future contract professionals may be at Teach for America or at the Peace Corps right now or coding the next big app in their high school computer class—value those experiences and start thinking differently.

Embrace Outcome-based Contracts

The world of professional services is rapidly changing—starting with how contracts are set up. More than 50 percent of the work we do with private-sector clients has some sort of a value-based or share-in-savings component to it. For example, we agree to only get paid “x” if “y” goal is met. Industry then has skin in the game. The risk is on us to deliver on the outcome.

For the government agency, the key aspect to value-based contracting is having decent baseline measurements. Classic incentives are also another way to encourage greater outcomes. If your agency has that decent baseline data, contracts can be structured so that you are not paying out as much to your contractor but instead your contractor earns a percentage of the savings.

One recent government procurement that includes some share-in-savings language is the Human Capital and Training Solutions (HCaTS) program that is partnership between Office of Personnel Management and General Services Administration. HCaTs is looking for the “best value customized solutions for human capital management and training requirements.” Including a share-in-savings approach will help them get there.

The kinds of people you want to take on your most complicated problems are going to be willing to put skin in the game. One way to find those kinds of people is before your next procurement, ask industry participants to give you some ideas on what types of share-in-savings arrangements they’d be willing to do. See who is willing to put some skin in the game and is here to make great outcomes happen for you.

Allow Agencies to Earn Small Business Credits for All Contract Types

Small companies do work for the government regularly. Sometimes as the prime, sometimes as the sub. In many cases, the work small businesses do as a subcontractor is just as important as a prime. However, agencies only get credit when the small business is the prime.

If we want more collaboration, more innovation, the government can encourage industry to bring in small businesses more often. One change would be to allow agencies to take small business credit, toward their 23 percent goals, for at least their first-tier subcontractors.

For many small businesses, their ability to scale is highly dependent on working with a partner with deep domain and customer knowledge and expertise. Large and small businesses should consider coming together to deliver the work in the best way that serves the client and brings value—and not focus on forcing percentages to meet a set requirement.

There are more ways for service providers—large, medium and small—to work together based on the agency’s desired outcomes and the corresponding deliverables and innovation needed. For example, Medallia is a customer experience software platform that many leading brands use. We’re working closely with them on their first government project. Yet, our client doesn’t get any “credit” for working with them.

More can be done to encourage this type of company—innovative, new-to-government market—to do business with the federal government. One option is to incent the current industry base to bring new and innovative companies into the mix through a type of a protégé program, which could bring greater innovation into government.

What small changes could your agency make in the way it considers the people it hires or contracts with? How could it better incent innovation in industry? There’s a lot of opportunity for small changes that can make a big impact for your agency’s mission.

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