The DHS Procurement Innovation Lab is still busy

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Steve Kelman looks at how advisory downselects pioneered helped speed up a key FEMA acquisition – and how other agencies can benefit.

In 2020 I blogged about the Department of Homeland Security's Procurement Innovation Lab (PIL, pronounced slightly weirdly as "pill"), established in 2015 by DHS's legendary Chief Procurement Officer Soraya Correa, whose commitment to innovation I blogged about in 2021. One of the interesting features of the Lab was that they sent teams to procurement offices to work on procurements only after requests from the buying office, rather than the more common tiger team approach where people from headquarters descend unbidden on offices.

Being under the impression that there was perhaps less excitement in government these days than earlier about innovation in general and procurement innovation in particular, I decided recently to go back to the PIL to find out what they have been up to more recently. When I originally wrote about the PIL, it was headed by a woman named Polly Hall, who it turned out had moved early this year to a position as a special adviser to the chief procurement officer. Hall's acting successor is Sandra Schmidt, a contracting officer who came to the PIL in 2018 from the Federal Law Enforcement Training Center.

What I learned is that the PIL is very much alive and well – now having worked on over 140 projects since the Lab's inception. Many of these are bespoke assignments, but also, not surprisingly for an organization that has had the time to become institutionalized, they have also developed a few templates for innovations they promote.

A recent example of a DHS component coming to the PIL, which illustrates the Lab's innovation templates, was for a $3 billion FEMA buy for contract medical personnel spread throughout about 120 vaccination centers around the country to administer covid vaccines during 2020. (I will confess I was unaware such vaccination centers even existed – I got my jabs at my local CVS, and other friends went to their doctors.) Because vaccinations needed to be rolled out very quickly, a quick award was crucial.

The most-important PIL innovation FEMA used for this procurement was the advisory downselect. An advisory downselect is an alternative to the traditional procurement system where any vendor who wanted to bid had a right to do so and to have their proposal fully evaluated, something that – combined with the lengthy proposals, sometimes even delivered by forklift truck -- slowed the process down enormously. 

With an advisory downselect, the government can ask vendors to submit very brief proposals and then choose a much smaller group whom the government believed had a realistic chance for award and invite only this smaller group to bid.

The "advisory" part was that an agency could not preclude other vendors from bidding if they chose, but other vendors would be advised they were not well-placed for later award. This idea was introduced into the Federal Acquisition Regulation in connection with the rewrite of Part 15 of the FAR in the 1990s (with the proviso that those who had not made the cut were allowed to bid if they chose, a concession to the forces at the time that opposed the change at all). But, somewhat to my surprise (and disappointment) advisory downselects did not really start being used in the government until a few years ago, and are still used only by a few agencies, most commonly for digital services acquisitions. The technique is taught in the Digital IT Acquisition Professional (DITAP) training program for contracting officials buying digital services.

Fifty-four vendors expressed an interest in bidding on the DHS medical services buy. Each submitted a six-page proposal that discussed their corporate experience providing different kinds of medical personnel at dispersed locations. Based on those very short proposals, FEMA chose – after a 15-day evaluation – six vendors to proceed to the second stage, which involved a two-hour oral presentation, followed by another 12-page proposal. However, five vendors who did not make the cut decided to submit proposals anyway, meaning DHS got a total of eleven proposals. The second phase took a total of eight days to evaluate.

The original PIL innovation template, introduced in 2015 when the PIL was created, includes the use of what they call "on-the-spot consensus" and "confidence ratings" for proposal evaluations, and these techniques were used for this buy. Under the previous system, technical evaluation team members would evaluate proposals individually and write up individual evaluation reports. The chair would collate a technical consensus report. Then the contracting officer and chair would go back and forth over email for months to make the consensus report legally sufficient. Under the new system, individual evaluation reports were eliminated. Evaluators sit down together and together read the first proposal. They discuss and decide on what they call a confidence rating for the proposal, on a three-point scale (high, medium, or low confidence in the ability of the offeror to perform) instead of the old five-point adjectival evaluation. Once they have consensus, they then document the reasons supporting the confidence rating decision that was made, move on to Proposal #2, and repeat the process. 

People find confidence ratings more intuitive and easier to evaluate, because they center on one factor, the overall ability of a vendor to do the work. The new system for proposal scoring cut scoring time down from years to weeks.

At the end of the day, with these innovations FEMA made its award 79 days after the solicitation was issued, compared with a traditional process that could have taken several years.

The PIL has launched a new innovation template this year – a crowdsourcing system to solicit ideas for process improvements of any sort at the department. It's a sort of for DHS procurement. Employees can suggest innovations and arrange to prototype their ideas. DHS judges look at ideas that have been prototyped and award prizes (such as leave time, a cash award, or lunch with a senior DHS exec) for outstanding ones. DHS has also modernized their internal system for presenting and visualizing data for each PIL team working on an innovation, consolidating 20 apps for presenting the data into four.

The Departments of Agriculture and Commerce have consulted with the PIL and set up units themselves loosely modeled on it. NASA, the Environmental Protection Agency and the Department of Veterans Affairs are in the process of setting up similar units. I hope other agencies consider this.