Home How is Technology Changing the Landscape of Government Contracting

How is Technology Changing the Landscape of Government Contracting

Contracting and Technology

As a direct result of budgetary increase towards Federal Government spending, the adoption of technology standards across government contracting has started to change in the past decade. According to the latest Bloomberg Government Report, Federal Contract Spending was $682 Billion in FY2020, a 14% increase over previous year.

From a Tech Perspective – Why is Government Contracting Harder than Regular Contracts?
Government contracts can be subject to further review by the judiciary bodies to ensure that there is no bias or arbitrariness involved. With multiple steps involved in the commencement of the project itself, there are additional factors that come into play during the lifetime of a contract:

Small and Medium Businesses
  1. The complex, multi-step process of procurement means that more often than not, digital services are outdated already by the time they are approved.
    While some products are procured off-the-shelves, digital products have a finite lifecycle and can become obsolete pretty quickly. Procurement procedures under government contracts are usually more complex and can result in the expiry of the digital product before it is procured.
  1. Procurement is time-intensive for all intents and purposes.
    Procuring items like software and hardware for Government Contracts can be a time-intensive process due to added complexities, scrutiny and policy hurdles involved.

    For example, in Boston, MA, a service designer for an IT Firm discovered that under the Massachusetts General Law, all procurements over $35,000 had to compete through Request for Proposals (RFPs) which took him a minimum of 65 steps, needed to be reviewed by at least 4 different offices, and on average, took a staggering 133 days.
  1. Government RFPs have very specific requirements
    The request for proposals or RFPs require officials to document their requirements in as much detail as they can. For Technology Products or Services, government contractors are often selected based on development experience, and not skill. Venture Capitalist, Trae Stephens has argued that treating engineers as commodities has hurt the overall government contracting for the tech landscape. He says, “this process massively disadvantages efficient and more talented teams. Because the talent gap between average and excellent is so large, it would generally be better to have one Lebron-level coder than to have 100 average ones.”
  1. A culture of cooperation between participants is rare
    The TechFAR Handbook – a guide created by US Digital Service (USDS) as a ready reckoner to help Federal Agencies acquire tech products – stresses on using Agile principles for this purpose. It also acknowledges that this approach requires collaboration. Most government agencies do not have an organization-wide culture that promotes working across silos. Therefore, process-based contracts involve more steps than usual. Even in the modern government era, cross-functional and interactive processes are very rare.
  1. Policies and other factors
    The biggest hurdle by far when it comes to government contracts seem to be policy issues and lobbying. Powerful factors at play work their way into the system to exert pressure and pose challenges in the way of implementing newer technology standards or protocols. A more recent example of this has been the fallout of Microsoft and the Pentagon’s joint venture, called Jedi program – that was ultimately abandoned after years of capitulation.

How Government Contracting Relies Ever Increasingly on Emerging Technology Trends?
Over the past decade, more and more government agencies have taken help of technologies to improve the overall process of contracting.

Technology and Contracting
  1. Automation-Based Improvement of Efficiency:
    Many government agencies have adopted automation techniques to improve their overall process efficiency. This is especially effective for large-volume contracts.

    For example, the US Department of Health and Human Services uses AI to consolidate contract vehicles, and NASA uses robotic process automation bots that can learn, mimic and execute business processes that are rule-based.
  1. Better Risk Assessment:
    Technologies such as AI can be used to help agencies mitigate potential risks and manage existing risk factors. Many government agencies use Scheduled Risk Assessments or SRAs for better decision making.
  1. Increased Competition:
    Big Data and AI based tools like BidFortune have started penetrating into the contracting marketplace. They also aid small/medium businesses and first-time contractors to select recommended contract opportunities for them.
  1. Performance Tracking:
    Emerging technologies are helping organizations track supplier performance, prices, and overall plan performance. Automation tools help manage and monitor contract performance and reporting deadlines, enforce third-party obligations, track government investment in contractor performance, and set compensation rates more objectively than humans by eliminating prejudice.
  1. Auto-Establish New Legal Frameworks:
    In the future, AI tools can be leveraged to even write new legal frameworks for government contracts and automatically create contract documentation based on past terms.
  1. Data Management:
    Contract Data Management is a pivotal part of Government Contracting. With newer, cloud-based CDM tools that are highly available, and infinitely scalable, government contractors are delivering products along with proposed documentation and data.
  1. Security:
    Newer security standards mandated by evolving technology trends have enabled the government contracting process to develop foolproof solutions. Security standards like AES-256 and later based encryption, multi-factor authentication based on a combination of hardware security modules and digital tokens and even fingerprint/facial recognition technologies have proven vital in ensuring higher/stricter regulatory and security standards are met.
  1. Procurement Benefits:
    Technology has given procurement for Government contracts a new edge. For example, Massachusetts Digital Services, working closely with the State Government and the Procurement Office, has created a Procurement Vehicle to establish clear cut road maps of where each product acquired will be going, as well as minimum vendor standards. This has put product management solely in the hands of the government and has given them better control of the procurement scenario.
Deep Search

Deep Search and finding competitors/partners
A company’s online presence is the way the world understands their business and services. Using the powers of Deep Search – a functionality available in many tools, Government Agencies find information that is not available in casual searches. This can include anything from data about potential partner contractors that are not available in regular searches to finding competitors for a particular requirement when making a decision for a contract.
Contractors can also harness the powers of Search Engine Optimization to ensure more meaningful content is displayed about their organization in these searches. They also enable businesses to keep abreast of their competition.

Technology Trends

How Can SMEs Maximise the Effectiveness of Technology in Government Contracting?
The future of Government Contracting is still uncertain – with heavy dependencies on changing political, market and technology trends. But one thing is for sure – businesses will have to inculcate a greater level of flexibility.
A couple of trends that small/medium businesses can take note of to maximize the effectiveness of technology in the realm of Government Contracting are:

  1. Faster development time for projects using automation
    The faster you develop a solution, the more projects you get. Businesses that are adopting automation standards to deliver contracts are more likely to land more contracts from the government. Trends like Robotic Process Automation have drastically reduced delivery timelines and increased the overall technology effectiveness of government contracting in the process.

    Recently, the Department of Veteran Affairs (VA), alongside USDS and Nava – a software firm, ran a 72-hour coding challenge where potential vendors had to write sample code for their overhaul of the appeals processing system. All participants had to present the written code via GitHub. Eventually the vendor that presented the most effective and reliable code was chosen as the winner. This exercise was a huge success. As Alex Prokop from Nava wrote in his 2017 article:

    “A year into the contract, the team currently has launched and maintains a suite of applications for VA, including a tool to check that appeals are ready for review to reduce data errors, another tool that speeds up downloading the documents in a Veteran’s file, and others that automate various parts of the appeals process. […] In April 2017, following one tool’s launch, a subset of appeals that historically experienced long delays saw their time in a crucial step of the process decrease from 25 days to 8 days.”
  1. Invest in technologies for better forecasting and increased efficiency
    Investing in Big Data, Artificial Intelligence and Machine Learning is key in today’s landscape. Not only does these technologies help small/medium businesses to forecast and increase their overall efficiency, it also keeps them in tandem with many government agencies that make heavy use of AI/ML technology standards and expect contractors to propose similar solutions.

    For example, in a move towards result-driven RFPs, the City of Boston sought proposals to build a Analytics Data Warehouse to connect all data platforms across the city. This required firms to propose solutions built on cutting edge AI/ML and Data Analytics platforms that were also reliable, scalable and hyper-efficient.
  1. Promote user-centric design patterns and agile development processes
    Many regional/state government contracts are now being favoured towards businesses that produce user centric designs. This is a fairly new design standard and something that every small/medium business should adopt very quickly.

    Dr. Susan Weisnchenk, in a Human Factors International (HFI) video titled The ROI of User Experience, notes that of the $72 Billion per year that the US Government invests in IT, up to 15% are abandoned and at least 50% time of a programmer is spent doing rework that is otherwise avoidable.

    HFI recommends following the “10%” rule – which recommends that 10% of the IT staff in a government project should be user experience (UX) professionals and 10% of the proposed budget should be dedicated to UX. A larger emphasis on UCD principles and practices makes companies avoid costly large scale rework.
  1. Propose non-proprietary technology standards while bidding
    While governments are looking to increase cross-silo adoption and easy adoption of technologies, their contracts usually look for solutions that do not lock them with proprietary technology standards, and are upgrade-friendly. Developing open standards is a good way to increase a small/medium business’ chances to showcase it to interested government agencies and land a contract as a result.
  1. Indoctrinate a Pay as You Go approach
    By not being bound to a fixed bid contract, small/medium businesses can instead move towards a ‘Pay as You Go’ approach. This is now being heavily used across many major governments in their contracting process.

An improvement in government contract practices while keeping their regulatory framework intact is a herculean task, no less. While the advent of inclusive and better integrated technology standards is paving the way out of bureaucratic nightmares, increased political lobbying and pressures for the status quo remains a tough hurdle to pass through.

Second, the adoption of newer technology standards needs to be incentivised across the entire organizational structure of the government, and that in turn requires the willingness to participate in cross-cultural mindset shifts.
Balancing cutting-edge technology and maintaining regulatory standards will ultimately be what separates the good from the outstanding.