Silicon Valley and the Government Market: How Can the Government Modernize Faster?

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The red tape and hassle associated with doing business with the government are legendary. Government buys at the speed of glaciers; in the meantime, technology evolves at the speed of Moore’s Law (that is, really fast).

This creates a huge problem. While nobody expects the government to be agile or innovative, we at least expect the government to have down the technology basics–rudimentary cybersecurity, basic response times, and some form of understandable citizen interfaces.

Unfortunately, none of this is happening. Government lags years behind the private sector with its IT infrastructure. Innovation is desperately needed to leapfrog the government from COBOL-based mainframes.

Agencies have taken note of this innovation gap. Several are addressing it head-on with new outreach efforts and agile procurement techniques. In terms of innovation outreach, DOD, DHS, and others are opening liaison offices in Silicon Valley, Austin, Boston, and Research Triangle.

These DOD offices are intended to make DOD a more transparent and attractive potential market for emerging technology companies.

These outreach efforts may or may not pay off. The DiUX initiatives had the direct personal visibility of former Defense Secretary Ash Carter, a scientist by training and avocation. Whether Secretary James Mattis assigns a similar focus upon these programs is unclear.

Other recent developments directly target the cumbersome process of procurement. These efforts focus on speeding up contracting and making monies available to innovative companies using streamlined procurement procedures. Here I must get a bit nerdy.

Two new sections in the National Defense Authorization Act promote a new fast-track process for innovators to highlight their capabilities within the Federal marketplace.

These provisions, called Section 880 of FY2017 NDAA, and Section 897 of this year’s NDAA, establish new and streamlined program authorities. Section 880 establishes pilot programs at DHS and GSA to acquire innovative technology up to a cap of $10 million using general solicitation competition procedures. What that means is that agencies are now empowered to carry out a pilot program (called a “commercial solutions opening pilot program”) that is acquired through a competitive selection of proposals resulting from a general solicitation and the peer review of such proposals. Think of this as an agency “shark tank” with a same-day funding decision.

Acquisitions can occur using streamlined procedures (think contract award within 30 days of agency “shark tank”). Using these streamlined procedures, the agencies would be able to accelerate the transition of new technological solutions into operational use by the agency users. These are perfectly legal, and are competitive procedures under the Competition in Contracting Act. Guidance on the use of these procedures is in process now at GSA and DHS.

This year, the NDAA took this innovative approach a step further. In Section 896 of this year’s NDAA, this programs’ use of merit-based selection procedures was expanded to encompass all pilot programs, as well as the Small Business Innovative Research Program and the Small Business Technology Transfer Program.

Deeming the use of this form of accelerated review and approval for innovative proposals to meet the requirements of competitive procedures under CICA and the FAR is huge. It legally authorizes agencies to step back from the usual, cumbersome forms of open market procurements and greatly streamline both the time and effort required to get under contract.

Industry should support these innovative approaches for innovative companies. And innovative companies should be aware of these fast-track developments as a back-door channel into the Federal market. How else will the innovations of Silicon Valley become an integral part of government?


Richard Beutel
About Richard Beutel
Richard Beutel is currently the Principal of Cyrrus Analytics, one of Washington’s premier boutique government market strategy and legislative advisory firms. He is the former lead acquisition and procurement policy counsel for former Chairman Darrell Issa of the House Oversight and Government Reform Committee. Rich wrote and managed the Federal IT Acquisition Reform Act – FITARA – which was signed into law as part of the FY2015 National Defense Authorization Act.