To cut costs and shave time off tech projects, the feds are about to test a new contracting method.
On Tuesday, Oct. 13, the digital service team at 18F announced an experiment to essentially freelance out coding work to companies and individual contractors through “micro-purchases.” The buying method is nothing new to federal agencies that are allowed to make micro-purchases for goods and services below $3,500. What is unique in this case, however, is that the purchasing method will be used to buy code, according to an 18F blog post.
“Our hypothesis is that vendors can ship great code under the micro-purchase threshold, and we see opportunity to use procurement authority in new and productive ways,” wrote 18F Acquisition Management Director V. David Zvenyach.
The initial experiment begins on Oct. 26, when 18F plans to advertise on GitHub the opportunity for "freelancers" to bid on its calc project, a tool for agencies to estimate hourly rates of professional services contracts. Applicants must register in a free government contracting database, and the initial project bid will start at $3,499, Zvenyach said, noting that applicants can bid that price down.
Zvenyach said 18F is in the first stages of experimenting with the bite-size procurement technique, even going so far as to say it “might be a terrible idea.” Despite uncertainties, however, he argued it had to be at least attempted to gauge its impact. For example, if micro-purchases proved successful, the practice could serve as a positive disruptor of the government’s unwieldy IT procurement system, estimated with a purchasing power of about $80 billion per year.
“If it works, that would be fantastic,” Zvenyach wrote. “If it doesn’t, it'll be an inexpensive experiment and we will have learned some new things.”
Looking at the larger picture, 18F has, since its inception, sought to show fellow agencies that open source code can translate into affordable and efficient contracting — and this could be a way to do it.
Hypothetically, larger projects could be broken down into modular parts and piecemealed for affordability. And this method could potentially assist and incentivize IT vendors that aren’t meeting deadlines or expectations — a common occurrence at the federal level. Similarly, officials might salvage time by cutting unnecessary red tape for smaller tasks. Then there are the outside economic benefits for small businesses and startups that would likely be eager for the jobs, not only from a financial perspective, but also to seed relationships with agencies — a must-do for larger federal contracts.
"One thing we are hoping to get from the experiment, particularly over time if it is repeated, is better data surrounding cost for incremental software development for the government," Zvenyach said in a follow-up interview with Government Technology.
Of course, there likely will be a few dissenters; some traditional government IT contractors may see that this approach means they'll have less work and greater competition. And there is the question of how the practice might affect internal IT hiring if it becomes a sustainable source for expertise. All are unknowns at present, and something 18F will have to investigate as it tests the new method.
"It's likely premature to think about scale," Zvenyach said. "If it works, we'd want to try again, keep experimenting, and see if we can key in on repeatable wins at scale."