Riding the Acquisition Innovation Avalanche

You know a transformation is afoot when the Navy chooses as its acquisition chief a man known as “Hondo,” who is famous for an Iron Man exoskeleton project and a “Thunderdrone” UAV tournament.

Assistant Secretary of the Navy for Research, Development and Acquisition James “Hondo” Geurts is the father of SOFWERX, the U.S. Special Forces Command’s technology incubator, where the super suit and the drone coliseum are housed. SOFWERX is dedicated to fomenting creative collisions among divergent thinkers, and Geurts is the personification of the most expansive explosion of innovative in federal acquisition in a quarter century.

As Geurts often says, we are in the Age of Surprise. Timelines are shorter. The technology gap between the United States and its adversaries is disappearing. The Armed Forces need to be able to respond as quickly to unforeseen problems as the ones they’ve trained for. They must bring multiple perspectives to bear on challenges mounting at an ever-increasing pace. Shaping government procurement for the Age of Surprise is a primary focus of the Trump administration. “To succeed in 21st century geopolitical competition, America must lead in research, technology, and innovation . . . We must harness innovative technologies that are being developed outside of the traditional defense industrial base,” said the National Defense Strategy released in January.

The current administration is building on the initiatives of the past decade to prevent the military and government from falling further behind the curve of technological and business model disruption. Government has responded with both management and legislative initiatives to buy technology faster and more in line with commercial practices. Feeling special pressure to spur military transformation, Congress has issued a spate of catch-up provisions in recent National Defense Authorization Acts.

For example, the 2016 NDAA created the Advisory Panel on Streamlining and Codifying Acquisition Regulations, better known as the Section 809 Panel for the location in the law where it appears. The 2016 law also made permanent the Pentagon’s authority to buy novel prototypes from nontraditional sellers using fast, streamlined agreements not covered by the Federal Acquisition Regulation. The 2018 NDAA further extended DOD’s ability to use these other transaction agreements (OTAs) by doubling the funding authorized for prototype projects and by permitting follow-on production contracts for successful prototypes without further competition.

The 2017 NDAA ordered the break-up of the Office of the Secretary of Defense's acquisition office—the Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L)—into one under secretariat for research and engineering focused on advancing technology and innovation, and a second one to manage the business of acquisition and sustainment. Leading the AT&L reorganization is Benjamin Fitzgerald, director of the Defense Secretary’s Office of Strategy and Design. He is a well-known defense strategist and advocate for adding an “additional acquisition pathway” to achieve U.S. defense technological superiority. In “Future Foundry,” a 2016 Center for a New American Security paper, Fitzgerald and his co-authors wrote: “The result of creating an additional acquisition pathway would be an acquisition system that supports the nation’s traditional military advantages, while also allowing the DoD to build on its military-technical superiority in new and innovative ways.”

Additional acquisition innovation pathways in DoD are being created by management initiatives. For example, the Defense Innovation Unit Experimental, “a fast-moving government entity that provides non-dilutive capital to companies to solve national defense problems,” opened in Silicon Valley just as SOFWERX emerged in Florida. Not to be outdone, the Air Force opened AFWERX two months ago in Las Vegas. It’s dedicated to “connecting innovators and accelerating results.”

Outside the Pentagon, a similar landslide of business re-invention has begun across government. The General Services Administration, under the new leadership of Administrator Emily Murphy, is implementing governmentwide acquisition innovations on behalf of the Office of Federal Procurement Policy and the Office of Management and Budget. Among these is the governmentwide category management initiative kicked off in December 2014, by then-OFPP Administrator Anne Rung to “shift from managing purchases and price individually across thousands of procurement units to managing entire categories of purchases across government collaboratively and in sync.” OFPP also chartered Acquisition Innovation Advocates to seed and share innovations across agencies. The December 2018 IT Modernization Report from the White House Office of American Innovation deepened the Trump administration’s commitment to category management, calling for its use in moving more applications more quickly to the cloud and strengthening IT network cybersecurity.

The Homeland Security Department stood up its Procurement Innovation Lab in 2015 to lower barriers for innovative, nontraditional contractors, speed contract awards and help vendors better understand DHS’s procurement goals. In 2015, the department opened its own California satellite, a Silicon Valley Office, “to tap into the innovation of the private sector in new ways” and open the door for non-traditional entities to work with government. DHS also is among government’s leaders in employing the “show-don’t-tell” contracting model, wherein competitors demonstrate their capabilities by building working models of the goods and services being sought so that the government can compare them.

The Program Support Center, the Health and Human Services Department’s shared-service provider, has begun using IBM’s Watson to apply artificial intelligence and machine learning to better understand procurement data. GSA also is testing blockchain distributed ledger technology to automate financial reviews for its FASt Lane program to speed vendors onto its schedule contracts. Another GSA pilot project uses robotic process automation “bots” to help review new contract offers for the Professional Services Schedule. Also in the works at GSA is a test of commercial online marketplaces to allow federal agencies to directly buy goods and services.

This torrent of experimentation may produce a dizzying g-force of accelerating business transformation among procurement professionals, program managers, senior executives, political leadership and frontline employees in every agency. That’s why we’re presenting every single person and project I’ve mentioned above, and more, at the 2018 Acquisition Excellence conference on March 27 in Washington. We are bringing together today’s innovators so they can explain how their ventures are being developed, tested and succeeding. Those who attend will learn how to ride the avalanche, not be buried by it.

Tim Cooke, the President and CEO of ASI Government LLC, is industry co-chair of the 2018 ACT-IAC Acquisition Excellence Conference.