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By Steve Kelman

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How contests can improve government performance (and procurement)

The Washington Post reported today that the second annual contest for employee-generated cost-savings ideas for the federal government is underway. Government employees may submit ideas through July 22, and both other employees and members of the public will be allowed to rank and comment on the ideas, sort of like the PepsiRefresh project I wrote about in an earlier blog post. Last year's contest generated a lot of ideas, though a lot of it pretty small-bore stuff, I think. I would like to see employees this year come up with ideas, for example, for how requirements on existing contracts might be modified to save money (does a two-hour repair time cost twice as much as a three-hour repair time? Are there applications being maintained and upgraded that nobody uses?).

The bottom line, though, is that in the appropriate circumstance a contest is a great way to generate ideas and, above all, to pay only for results.

Last March, Jeffrey Zients, the chief performance officer at the Office of Management and Budget, issued an extremely thoughtful and detailed memo entitled "Guidance on the Use of Challenges and Prizes to Promote Open Government." (Full disclosure: my wife works for Zients, although not on these issues.) The memo discusses in detail different kinds of contests and when they are appropriate, emphasizes the virtues of contests in terms of paying only for results and not requiring the government to choose which team to bet its money on.

The memo even discusses statutory provisions that can be used to authorize contests; my own view is that in the procurement area, it would be helpful specifically to authorize procurement contests in the FAR, perhaps Part 16; however, the guiding principle that “if it's not illegal and it's in the government's interest, then it is legal,” should be enough. (My only nit with this excellent memo is the politically correct title that puts this effort under the rubric of "open government," one of its virtues, but in my view very much a subsidiary one compared with its results-based features.)

I also saw recently that two members of Congress had attacked the Environmental Protection Agency’s use of contests to develop public service announcements on various environmentally-related themes. But given the fact that the prize was a mere $2,500 for developing the videos and that PSA's cost the government nothing to air, it is almost impossible to imagine that this isn't a great deal for the government -- assuming that the underlying purpose of the PSA's is even vaguely worthwhile. The criticism sounds like a know-nothing effort to mock attempts to find innovative ways to make government work better -- a pastime in which too many members of Congress have a tendency to engage.

Posted on Jul 08, 2010 at 12:08 PM


Reader comments

Wed, Jul 14, 2010 Steve Kelman

Vern, I always appreciate your comments on this blog, even if contrarian -- though I do sometimes think you are contrarian for the sake of being contrarian. I disagree with you about performance-based contracting, which is just an applciation to contracting of using performance measures to drive improved performance. This obviously can't be resolved in some blog dialogue, though. I don't believe in the "curative" effect of fixed-price contracting, but I believe there are unexploited opportunities for government to get better value. I agree with you on "transparency." And the larger point about the value of contests, which was the topic of the blog, remains.

Wed, Jul 14, 2010 Vern Edwards

Well, I'm not always looking to be a contrarian. I have, in fact, been extremely complimentary about some of the things you have done and about you generally. However, contracting seems to attract a lot of half-baked thinking and half-baked ideas. Performance-based contracting is one such idea. The curative effect of fixed-price contracting is another. The new "transparency"--posting whole contracts on the internet--is a third. Someone has to say that the emperor has no clothes, and I am happy to play that role. I like to think that I'm not just a contrarian. I try to explain my thinking in detail and propose alternatives. As for meeting the president. I voted for the guy and like him, but he's a public servant and the chance to "meet" him for a photo op simply doesn't light my fire. I'd rather he ask for a memo of suggestions and a promise to really read the thing.

Mon, Jul 12, 2010 Steve Kelman

Vern, first of all, I was talking only very secondarily about contests among procurement folks for ideas about improving procurement -- I was only suggesting that procurement people ought to look for ideas for entering this year's SAVE contest. The prize for that contest is not "a few bucks," but a one-on-one with the President in the Oval Office. I would hardly find participating in such a contest to be professionally demeaning, though surely all contracting professionals should be looking for ways to do our jobs better. The main procurement context for my blog was using contests as a buying technique. And, by the way, Vern, why are you always looking to be a contrarian? :)

Mon, Jul 12, 2010

I take issue with your comment "Last year's contest generated a lot of ideas, though a lot of it pretty small-bore stuff." The "small-bore" stuff is where we can get quick results and repeated small, numerous quick, small victories would have a greater impact than the more glamorous larger notions that interest you. The problem with these annual contests is that they are only about the large flashy ideas that can be used as PR instead of the small changes that just make things better. The larger efforts have their place also, but frequently the large ideas get touted, implemented, and bring about their own unintended consequences. By the time those are realized, focus has shifted and those never get addressed.

Mon, Jul 12, 2010 Vern Edwards

Well, just for the sake of debate, I say that contests would further erode what little professionalism is left among government contracting personnel. If you are a pro, you should always be looking for and promoting ways to do your work better, more quickly, and at a lower cost. When you run into a bureaucratic obstacle, you should fight. You should publish articles in professional journals, like Contract Management magazine. Write a well-received article and you'll earn the respect of your peers. Win money in a contest for new ideas and you'll win their envy and disdain. Contests are for clerks. You are no pro if you have to be plied with a few extra bucks to think of and promote a new idea. The idea is sooo middle school.

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