Government Procurement Cycles Clashes With Speed of Technology

Technology product development and lifecycles are getting much shorter. Unfortunately, the current process for most government funding approvals and procurement cycles have been used for decades.

Combined, legislation funding approval, the proposal process, and then the final choice of a vendor can take between 18 to 36 months (the technology implementation has not even started). With some larger projects – delivery of the technology solution is yet another 2 to 5 year cycle. The end-to-end process before the business is using the new solution can take 3 to 8 years.

I believe one of the biggest factors preventing successful government IT projects is the lengthy procurement process.

For commercial software like Microsoft Windows, a new version is released every 24 months, most consumer technology products have new release cycles every 12 months, and now, many mobile apps have quarterly release cycles.

Restrictive rules

Regulatory rules can be so restrictive, that they choke off innovation, and end up imposing more risk onto government agencies. By the time they finish their project, the technology which was purchased has become either obsolete, or needs new funding for an upgrade.

In fact, The Standish Group, an IT research firm, found that 94 percent of large-scale federal IT projects have been unsuccessful during the last decade. Yet, the United States has had rigid procurement rules and a system of checks and balances in place, in order to prevent such scenarios. I believe one of the biggest factors preventing successful government IT projects is the lengthy procurement process.

Also, procurement rules result in poor communication. How much a contractor knows coming into a procurement, and how well that company understands the requirements, can make the difference between an agency making the right or wrong solution. Yet current procurement rules often prevent or restrict the types of communications that take place.

More frequent communication with the bidders during the RFP process would decreases the chances of an unpleasant surprise or people walking away if they find their expectations are off.

There must be some way to begin making incremental decisions during the selection process, which creates a better fit for what a government agency is trying to do. When you look at the projects which are not successful, I believe some of the seeds of failure are in the procurement process.

How can government modernize their business model?

When we go and buy a car, we do not tell GM, Ford, or Tesla how to make their vehicles with 120 pages of requirements and rules. We have memorized our outcome of needed features such as price, color, interior and exterior options. If our “outcome” requirements are met, we pay for a car and drive it home.

So how can “outcome” requirements be met?

  1. Think Business First and Technology Second – Spend time looking at the business problem that the technology needs to solve before issuing a bid. Make sure that the focus is on results, and not on a tech-only software product installation.
  2. Throw out the RFP – Write a short, concise outcome of business rules, business process, and business benefits, and how the agency is going to be using the system.
  3. Better communication and engagement of vendors – Once a RFP is issued – all communication stops. A vendor can only communicate with an agency via written questions, at the beginning of the RFP process.
  4. Buy an outcome. Force all of the risk onto the vendor.  Have the vendor make the choices as to the technology stack and process they want to take to achieve your outcome. The agency will pay nothing until the outcome is delivered.

It won’t be easy, but government must continue to push the envelope to encourage an approach that enables it to strike a balance to keep up with technology and innovation. Incremental communication and engagement of vendors is a step in the right direction.

Outcome-based procurement will prevent corruption and waste, because government entities will not pay any money to the vendor, unless the outcome is achieved. New models will help government to keep up with the speed of technology, and will help to achieve outcomes that matter.

Categories