By Steve Kelman

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Nice by ICE on software development

I saw a noteworthy story by Alice Lipowicz recently on FCW.com, "Immigration and Customs looking at performance-based software development." The article reports on a request for information the agency issued. Noting that custom software has traditionally been procured -- not just by ICE but by government as a whole -- using cost-based contracts where specs develop over time and are frequently not performance-based, the RFI asks for suggestions about the possible use of fixed-price and performance-based approaches to software development.

If it can work -- and this is clearly not a one-size-fits-all suggestion -- this approach to software development creates incentives for cost control (especially in a competitive environment) and results-orientation that traditional approaches have often lacked. Because custom software will inevitably develop over time, one would need to look for situations in which it is a good idea to develop a Release 1.0 based on stable upfront performance specs and build out from there. Because Release 1.0 -- which potentially is the fixed-price, competitive part -- is likely to be only a small part of the total job and because the agency is likely to rely on the vendor that supplies Release 1.0 to develop a number of subsequent releases, that approach needs to be combined with a good past-performance evaluation system so the vendor doesn't take advantage of a sole-source status down the road.

One nice thing the FCW story suggests is that agencies are more open to trying new ways of doing procurement business than they have been in the past few years when acquisition was dominated by the risk-averse environment the fear industry had created. That is a good sign. Additionally, in an environment in which agencies have also been encouraged to curtail informal communication with industry in the name of arm's-length relationships, the use of an RFI to gather information is also great. So congratulations to ICE for exploring new approaches and a suggestion to both Vivek Kundra and Dan Gordon that they ought to be working with ICE to see if something useful comes out of this initiative.

I know some vendors have previously expressed the view that the government could be doing more fixed-price software development. I would be very curious to hear reactions from both vendors and government customers about circumstances under which this approach might work.

Posted by Steve Kelman on Dec 04, 2009 at 12:08 PM


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