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Expert Insight

When a procurement is not a procurement

Date: Thursday, August 4, 2011, 11:50am EDT
Alan Chvotkin
EVP and Counsel, Professional Services Council

As the size and nature of the federal procurement system changes, there are constant reviews and criticisms, and innumerable efforts to reform and improve the process. Most have their foundation in the common Federal Acquisition Regulation, recommending ways to improve agency and contractor use of the provisions and flexibilities that the FAR has or should have.

But federal agencies — with endorsement from the White House — are increasingly tapping a parallel universe of what are known as “prizes and challenges” to bypass the FAR and agency procurement processes and bring innovation to government. NASA used special legislative authority to challenge the private sector to develop a commercial capability to reach low earth orbit, for example, and the Defense Advanced Research Projects Agency conducted its highly publicized “grand challenge” for robotic cars that drive themselves.

However, since the Office of Management and Budget’s March 2010 guidance on the use of challenges and prizes, agencies have demonstrated some creative interpretations of existing statutory authorities to sponsor and award prizes for a wide range of requirements, in ways that push against the boundaries of the federal procurement system.

For example, the Veterans Affairs Department announced last month a $50,000 prize competition to encourage more widespread installation and use of the Blue Button Web-based system for downloading personal health records outside federal health care programs, in order to benefit veterans who receive care from non-VA providers. The three-month long contest seeks a simple, internet-based application that allows physicians and other health care professionals to sponsor and offer their patients ready access to their Blue Button information.

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