Handling government IT projects has never been an easy process. And it’s hard to tell which side — the public or private sector — most loathes the process, with its red tape and high costs.
But a new startup intends to remedy the often lengthy procurement and RFP process with an Amazon.com-style solution. In November, Nitin Pradhan, the former CIO of the U.S. Department of Transportation, and Ty Gabriel, an entrepreneur from Silicon Valley, launched GOVonomy, a company that brands itself as the next one-stop shop for government agencies seeking affordable commercial off-the-shelf tech solutions.
Pradhan said that during his time as a federal CIO, the idea for the company was generated after watching federal administrators and employees struggle to produce custom IT projects that were incredibly expensive, inundated in procedural holdups and that, at times, never materialized.
“The problem with this process is that obviously it’s extremely costly to build anything," Pradhan said. "In addition to that, assuming you actually build it out, then regular maintenance is a problem because you have a one-of-a-kind product."
He estimated the average time for most enterprise-level federal projects just for requirements to be drafted and agreed upon was one year. To get the project budget approved through Congress typically required a year or two. Next, to have an official RFP drafted and a vendor selected could be another year. And finally, to have the product actually developed could last between one or two more years.
“If you add all of this up, at a minimum it’s three years, and some things could even be longer,” Pradhan said.
In many instances, Prahan said the tragic irony for federal CIOs is never actually being able to see the fruition of their projects while in office, most serving terms that last only two to three years.
“By the time you actually get something like this going, the chances that something comes out in your own term is very low, they [official in the next term] may or may not be interested or the needs may have changed.”
In response to the systematic problem, GOVonomy hopes to disrupt inefficiencies in the procurement process by offering an online buffet of developed tech startups products to federal, state and local jurisdictions.
Those familiar with the hurdles of grabbing a government contract may wonder how the company intends to bypass the many requirements needed to enter a market with such a large product offering.
Responding to the possible skepticism, Pradhan said the company has in place a process to first research government agency needs and identify which products are in demand. Afterword, Pradhan said the company identifies potential startups that provide such offerings and works to have them included in the federal government's massive GSA Schedule program, which accounts for billions of dollars in government purchasing annually.
“We are talking about products that can be delivered within months instead of years,” Pradhan said of the new process that also cuts costs.
Revenue for the company will be gained through exclusive government sales contracts that allow the company to be the only licensed reseller of a startup’s products. It’s a business model that Pradhan said is beneficial for both the government who’s looking for affordable solutions and for startups who need help monitoring and participating in the much nuanced waters of government procurement.
“Unless you, as a small company, are watching that exact RFP and have exactly the right type of product, you cannot go out and apply to offer that product,” Pradhan said, “It’s very difficult to actually locate that opportunity.”
Bryan Sivak, CTO for the U.S. Department of Heath and Human Services, said that while he has not personally reviewed GOVonomy, based on its description, the site may offer a more user-friendly environment for government agencies who often are in need of innovative technologies.
"There might be something new in the way that they are presenting [GSA Schedule tech startups], through that interface they’re developing, to make it easy for government folks to navigate and see what’s out there," Sivak said.
Echoing Pradhan's concern over current Federal Acquisition Regulations, the national regulations used for acquiring new technologies and services, Sivak said the current regulations have become so tangled and nuanced that they've turned prohibitive to innovative technologies. A discouraging result of this, he said, is that only the people and organizations with the most lawyers or who've already established themselves receive contracts.
"In the government we tend to incentivize following process instead of outcomes, and as a result we don’t get access to a lot of things we should have access to," Sivak said. "The regulations effectively lock out any of the new startup companies because they don’t have any ability to play that game. It’s unfairly rigged for the people who have lots of resources."
While GOVonomy is one possible solution, Sivak said HHS is investigating other short-term solutions for tech innovation that are likely to be implemented in the future; however, he said he could not offer more details yet.
In the meantime, Pradhan said GOVonomy has roughly 20 tech startups signed on and 50-plus products available through its online site, where buyers can get free quotes on a per-project basis.
Bryan Sivak, CTO, U.S. Health and Human Services Agency. Photo by David Kidd
And in the next year, GOVonomy envisions generating about 100 companies and a few hundred products, with that list expanding year by year.
At the moment, interest is being generated through federal agencies related to defense and intelligence due to demanding or complex needs and tight budgets that can’t sustain the typical three- to five-year federal procurement process, Pradhan said.
He declined to mention specific departments who have shown interest to respect their wishes of confidentiality.
Going forward, while most of the products now offered are targeted for federal use, Pradhan said next year the company will roll out additional products for state and local jurisdictions.