Making Government EZ
In addition to rethinking big data in government in an attempt to save billions of dollars through the Office of Management and Budget, OMB; I, along with two other Presidential Innovation Fellows, inherited “RFP-EZ”. This was a highly successful initiative from the round one fellows sponsored by the Small Business Administration, SBA, in partnership with a larger “White House Small Business Procurement Group” through OMB’s Office of Federal Procurement Policy, OFPP. A majority of our focus on the RFP-EZ project was IT procurement reform.
Many in and outside of government blame the true failure of HealthCare.gov on the IT procurement process; being on the inside, I certainly can’t argue that! There are huge issues with how government procures IT services; and, the more we looked into the problem, the larger that we realized the problem was. So large in fact that we started with renovating “RFP-EZ” and quickly evolved into institutionalizing a “Procurement as a Service” revolution throughout the federal government. This revolution is a big part of the President’s “Management Agenda for Government Innovation.”
Our “tour of duty” was only six-months long, that’s not a whole lot of time to revolutionize anything, but it’s long enough to “get shit done”. My understanding of the inter-workings of government was rather limited, to say the least. However, within the first few weeks I realized that there were two primary ways in which things like this get done, through policy and through loopholes. Policy change takes significantly longer than six-months and requires much more knowledge of “the system” than I could ever wish to obtain, so, the “loophole” became my best friend – find it, understand it, expose it, exploit it … make change.
There are three types of companies out there: those that win federal contracts, those that don’t and those that don’t even bid. The first lesson we learned was that the best person at winning almost always wins -- that kind of makes sense, right? It’s actually a really big problem. For example, if FEMA needs an iPad app developed for real-time disaster recovery efforts on the ground, who is going to win that contract? The company whose core-competency is making iPad apps or the company whose core-competency is winning federal procurements? You don’t have to work inside government to know the answer to that question; those best at winning always win. Not only does the best service provider who bid not win, the actual best service provider doesn’t even bid at all, because of the way the system functions … that is actually the largest problem of all.
There is an old-adage, “you can have it fast, cheap and good; but, you can only pick two”. That’s actually not true anymore, comparatively speaking. Today’s high-growth, typically small, technology companies operate at such efficiency that they now offer all three (compared to the larger competitive alternatives, dinosaurs). It’s the only way to function in an industry that moves at the speed of innovation. My first start-up was a perfect representation of this model; it’s how we ended up working with Apple, Google, Adobe, Oracle, Mashable, NASDAQ, Twitter and why we never worked with the federal government.
Jason Calacanis tweeted at the start of my fellowship something that became a constant reminder of this reality:
When I was young you wanted a 100-person company doing $20 million, today you want a 20-person company doing $100m. #efficiency
— jason (@Jason)
July 6, 2013
There is such inefficiency within government inherently that highly efficient technology companies actually can’t operate successfully; the model of efficiency breaks-down in an environment of inefficiency. The government is actually tremendously efficient, just at an incomprehensibly enormous scale that moves too slow for technology innovations, which contradicts its request and leads back to the original IT procurement issue at hand. Innovation and efficiency have become synonymous, if the government wants innovation but lacks the efficiency for it … something has to change, and it’s not going to be innovation.
In addition to meeting with just about every federal agency we could, I personally met with over one-hundred technology companies during my tenure. I met with everyone, from the one-man freelancer to the largest government contractors everywhere across the country from Atlanta to San Francisco. I got a deep understanding of how these organizations operate with their clients outside of government and how they operate with the government, if at all. The objective was to learn how the big guy wins, why the little guy thinks he loses and why the best guy never plays the game.
Rewiring the system
We all know the game is wired, but, once we started to understand how it was wired, we started to change everything. It’s no secret that many IT procurements are pre-wired; heck, even many government jobs are pre-wired … the winning candidate pre-determined and the public bidding process just an illusion of being “fair and open”. If many contracts are wired, that means there is probably commonalities among how they are wired … so, we started to create an algorithm to identify those commonalities. We, almost instantly, went through all of the data and found ten key metrics for flagging an opportunity as “wired” (there’s likely many more) – like completely omitting the title, description or scope of work; you’d have no possible way of knowing what to bid on unless you already knew exactly what to bid on. My personal favorite was using a term that didn’t exist to describe that same term. Several procurements actually copy-and-paste the services requested from specific vendor websites, letting them know “in-code” that they are the pre-determined vendor or service requested and thus alienating others. Identifying potential wired opportunities and the contracting officers that wire them was a huge first step forward.
However, the biggest thing wired of all, was the process itself … unintentionally so. Ensuring that all opportunities are fair and open isn’t helpful when the process to bid can feel overwhelmingly unfair and closed. For example, to get paid by the federal government, you must be in a system called SAM; it’s so bloated, broken and complicated that even most people working in the Office of Federal Procurement Policy have themselves struggled to sign-up for the system, many in government fail to even try. And because of this common knowledge of a flawed system, most contracting officers won’t even review a bid from a vendor not already in the SAM system, despite that being a big no-no. So, we had to develop a solution … it was basic “on boarding” strategy; remove all barriers to entry!
We started to develop a system called “SAM Helper”; a guide built on top of SAM to help make the process more intuitive. We couldn’t just fix SAM, because it was so broken, it’s code-base has been locked-down … a “don’t spend money working on what’s broken” mentality. SAM Helper was the “sign here” sticky-tabs of the real estate industry. For anyone that’s ever purchased a home before, the paper-work is overwhelming and daunting, but, a good agent puts little stickies to tell you what’s most important (because everything is technically important) and where the major call-to-actions are – where to sign and how to quickly and effectively get through the process. The goal was to get more companies through the system. And while quantity wasn’t the objective, it was a by-product of helping quality through the door.
Accelerating government
However, it wasn’t just unwiring a system, getting through a complicated process and removing restricted barriers. It was about getting the right companies, providing the right services, to bid and to win; and, most importantly, to want to do so. The solution, one of many, was acceleration. We started to develop the federal government’s first Start-up Accelerator (a.k.a “accelerate.gov” and “AccelerateUSA”).
This accelerator program isn’t your traditional accelerator program; there’s no equity given up, there’s no communal office space offered and there’s no pitch deck required. It’s also not for your traditional “tech start-up”; the program is designed for any company looking to do more business, or do business for the first time, with the federal government … and to accelerate the growth of that business through those opportunities. There is over 74 billion dollars in IT spend every year within the federal government, that’s a plethora of opportunity!
The program was designed to address three core areas of need: education/training, guidance/mentorship and outreach/networking. The strategy was to leverage pre-existing communities that have mutually beneficial incentives for local economic growth/stimulation to host, support, and lead pre-developed programs throughout the country.
Programs such as “Meet SAM” that would guide companies together through the SAM process – through hands-on and digital walk-tru experiences. Programs such as “GovConnect” that allowed larger and more experienced companies working with the federal government to connect with those new to government – you might ask why the big guy would help the little guy, but, consider sub-contracting and recruitment and it becomes synergistically obvious. Programs such as “N.I.TR.O” (just an internal name – New Innovation Technology on-Ramp Opportunity; love me a good acronym) that provide a new purchasing vehicle for new companies to quickly and more efficiently get into the system and win contracts on an accelerated schedule – this was primarily a way to work against the use of the pre-existing GSA Schedule 70 to circumvent the more traditional (open) procurement process. And, programs such as “MarketPlace” that allowed for easier discovery of opportunities to work within the federal government, making every opportunity an accessible one – even bringing forward opportunities from grants, challenges and research funding.
The more barriers we can remove for the best in technology, the more opportunities the government has to access that technology. The fact that there are $74 billion dollars in opportunities shouldn’t be something we praise … it’s the issue, because the government excessively overpays for IT services, in the tens-of-billions collectively. We can have better services, we can have them more efficiently and we can have them at a lower cost!