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By Steve Kelman

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Challenge.gov and change in government

Shutterstock image (by Ismagilov): young woman thinking about the future.

Change in government is difficult and slow, the story goes.

Last week I wrote about the spread of data-driven performance meetings, typically led by high-level agency officials, through most of the government in the past five years. Now, five years is not exactly Silicon Valley speed, but I say we shouldn't knock it, given what a big place the government is. (More than 20 Cabinet departments and other large agencies were the potential organizers of such meetings.)

Around the time my blog post came out, FCW Staff Writer Mark Rockwell wrote a detailed and informative article on what I have usually called "prizes" but are becoming, thanks to the General Services Administration-run website Challenge.gov, generally referred to as "challenges." Challenges are a procurement method where the government presents a solution on which it wants people to work and specifies a prize (usually cash) that will go to the winner or winners. Anyone can enter.

Challenges are a dramatic form of what is often called "pay-for-success" contracting because payment goes out only if contestants' efforts actually work. I first blogged about contests in 2009, a year before Challenge.gov was launched.

For me, the headline in Rockwell's article was the bottom-line numbers. If you had asked me how many agencies had organized challenges using the site since it was launched, I would have guessed 15. In fact, 80 agencies have issued challenges through the site since 2010.

Most of the challenges are pretty cool. The Food and Drug Administration had a contest for ideas on how to more quickly find disease-causing organisms in food, especially salmonella. The $300,000 prize was won by researchers at Purdue University who developed a technology that makes it possible to process samples in hours instead of days.

The National Institutes of Health had a contest for biomedicine technologies that could help underserved populations or those with disabilities. In that case, $10,000 prizes were won by two students from Washington University in St. Louis who developed a technology for diagnosing and monitoring respiratory diseases in the developing world. It cost less than $10, compared to traditional prices of $1,000 to $2,000, without sacrificing accuracy. (The students have used their prize money to help get their startup company to produce the devices off the ground.)

The winners, as these two examples suggest, are most often not the typical crew that bids on traditional government contracts, which is one of the great-news stories from this technique.

A quick look through some of the major challenges on Challenge.gov shows relatively few for IT, however. Challenges are not appropriate for any sort of major system design, for starters because no company will invest the kind of money required to see if a solution works without being paid anything at all until the effort succeeds.

There should, however, be opportunities for the government to use challenges for more bite-sized IT projects that might attract new contestants. Rockwell's article notes that a challenge is being prepared to solicit an open-source tool for quality checks of FedRAMP documentation for cloud computing, which could make the process go much faster.

In the IT space, the government should be looking for projects that garage-type individuals or small companies can accomplish.

One thing that needs to be kept in mind, though, is that the size of the prize must be larger than the expected cost for a traditional procurement that pays for failure as well as success because many contestants will not take the risk without a correspondingly larger potential reward.

The information about the spread of data-driven meetings and procurement challenges suggests that the image of slow-to-change government, while not completely inaccurate, is exaggerated. As Sandford Borins wrote in his 2014 book "The Persistence of Innovation in Government":

"Innovation as a phenomenon within the public sector persists. Despite skepticism about whether large, hierarchical, monopolistic government agencies can initiate and embrace change, there is extensive evidence that they can, they do, and they will."

The reason, he said? "Because innovators persist."

There are countless civil servants committed to advancing the public good, and if doing so requires doing business in a new way, there will be folks out there who are willing to try, despite the obstacles. Good for Challenge.gov, and good for those who take up the challenges! This might be the most important innovation in the procurement system in recent memory.

Posted by Steve Kelman on Oct 13, 2015 at 1:10 PM


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Reader comments

Fri, Oct 16, 2015 Mila Gasco Barcelona (Spain)

Hello Steve, This is a very interesting post. Ines Mergel, from Syracuse University, has extensively done research on Challenge.gov and she has framed it under the open innovation (in the public sector) literature. I think that an interesting issue regarding Challenge.gov is that it is a collective initiative and several agencies participate. I am not sure what would happen if each agency launched its prizes and challenges with different rules of the games, formats, etc. Actually, here in Spain these type of challenges are not that successful and I believe this individualism has, partly, to do with it. Anyway, great article, very aligned with my current area of research!

Wed, Oct 14, 2015 Jaime Gracia Washington, D.C.

Although no longer accepting new projects or users, the RFP-EZ platform was designed for small IT projects, and focused on small businesses. Hopefully lessons learned from the pilot can be used for a "Challenges.gov"-like platform for IT, and developed under 18F.

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