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By Steve Kelman

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Think hard, invent something, win a prize

I recently was at a lunch with two doctorate students at Harvard Business School, and I was surprised to learn that one of them was writing her dissertation on the use of contests by scientists at NASA's Johnson Space Center in Houston as a tool to help the agency solve scientific problems requiring significant innovation. These scientists, she discovered, have made contests a routine part of how they do research and development at Johnson, using private company to advertise the contests they are holding.
The basic idea behind a contest is that you establish some performance objective — the Defense Advanced Research Projects Agency held one a few years ago in which the goal was an all-terrain vehicle that could navigate a tricky course in the desert — and offer a prize to the first person or group who submits an entry meeting the performance objective. I have been writing here in FCW about the idea of making greater use of contests as a procurement technique for years — first in 2004 — and, in a column at the beginning of the Obama administration in which I argued that greater use of contests was one of the top five ideas the administration should pursue.
Now the New York Times has discovered the issue, with a column in the business section by Steve Lohr titled "Change the World, and Win Fabulous Prizes." After providing a number of private-sector examples of contests companies have launched to develop various technology applications, the article notes that "perhaps the most far-reaching effort, however, comes from the federal government." With last September's launch of the website that provides links to agency-organized contests governmentwide and the passage last December of the America Competes Act authorizing prizes as much as $50 million, contests have finally come into their own in government.
The Times article quotes Todd Park, chief technology officer at the Health and Human Services Department, on the virtues of using contests as a procurement tool, compared with conventional procurement techniques. He told the Times, “You can access a whole universe of innovators, and you only pay for the result, unlike the usual procurement system.”

Exactly! Contests are a great version of performance-based contracting and are especially appropriate in this tight budget climate. As always, this technique isn't appropriate for all procurements or even all R&D procurements, but it should be a routine part of any good contracting professional's toolkit when doing acquisition strategy.
Procurement contests have now come far enough that cautious contracting officials need not worry about being too far out in front on something new — something as a general matter I wish people wouldn't worry about quite as much. Let's move, everybody!
Happy Memorial Day weekend to all.

Posted on May 27, 2011 at 12:09 PM

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