Industry Awaits Potential Congressional Resolution to 'Extremely Difficult' Procurement Process

The federal government’s IT procurement process could be getting a facelift with the Advancing Government Innovation with Leading-Edge—AGILE—Procurement Act of 2022, which experts viewed as a positive approach to address issues facing the process.

The act aims to improve government IT procurement by modernizing the process and making it more efficient, in addition to removing roadblocks for small technology businesses to contract with the government. 

So far, the Senate Committee on Homeland Security and Government Affairs has advanced the bill to full consideration on the Senate floor. However, with the Senate in recess until September, and the end of the current Congress occuring Jan. 3, 2023, the bill has just over four months to reach the president’s desk, before it would have to be reintroduced and face the legislative process over again. 

Ray Britt, Director of Strategy at Bidscale––a software company focusing on procurement––noted the challenges of the current procurement process. 

“It's extremely difficult,” Britt told Nextgov. “The fact that there are people like me whose entire lives are dedicated to running this process shows you that it's difficult.”

David Santiago, Adobe’s head of industry for public sector, also noted the constraints that the current procurement process places on limited agency budgets.

“There's a variety of challenges to government IT operations,” Santiago told Nextgov. “One of them is that contract spending accounts for more than 80% of the federal IT budget. If you break that number down a bit, McKinsey had an interesting number, saying that between 70% to 90% of IT budgets are allocated towards operations and maintenance activities, so these are just like keeping the lights running. If you think about the remainder of the budget that's available to these agencies, it's usually pretty small to really start a modernization program. And that puts a lot of agencies in a really difficult position, because if you don't have the adequate resources to build new systems and services, you're going to struggle and you might not be successful.”

Santiago noted that change management can be a challenge, but that the technology itself should not be if it is well-executed. However, legacy software and systems can also pose obstacles.

He added, “It's more just, how do you affect change in organization? How do you drive adoption? How do you define requirements? … Hopefully most agencies are moving towards agile processes, but even that process of identifying user stories and developing a backlog and grooming it can be very challenging for government agencies.”

Procurement of existing capabilities has become such a central issue because it is more expensive for the government to build its own technology. The increased costs for the government to build from scratch can be attributable to several factors, such as outsourcing and contracting. Moreover, as noted in the bill, Government Accountability Office analysis shows governmentwide contracting increasing, and about 80% of federal information technology budgets are spent on contracts.

Specifically, building new technology often requires the involvement of  system integrators and contractors, as well as teams to build the software, which can take months or years to complete. Costs are also driven up through testing, change management initiatives and labor.  

The bill has been viewed as a way to start addressing these issues in the procurement process.

“It's a great step in the right direction,” Britt said. “I think people don't associate government with innovation and that's just the popular narrative. But if you're honest with it, if you look at a lot of things, it's associated with government research.” 

He added that the AGILE Act “give[s] the government more tools and more flexibility to achieve what [it] want[s] to achieve.”

For example, the AGILE Act tries to reduce barriers to entry for smaller technology companies to participate in the procurement process.

“I thought it was interesting how the bill is trying to create a wider pool of eligible contractors and vendors that can bid on work,” Santiago said. “A lot of the past performance requirements are pretty strict and there's a lot of eligibility rules around it, so it creates barriers for companies that maybe have done work primarily in the commercial side, as opposed to having past government work.”

In regards to barriers to entry, Santiago stated, “there's a lot of rules and regulations that are policies that are overly burdensome, potentially obsolete. They're restrictive, and a lot of it has to do with risk aversion…All those requirements make it harder for smaller companies that are trying to break into the industry to get a fair shot.”

A portion of the bill focuses on training workers through initiatives like pilot programs.

“[Training is] extremely important because if you're going to be procuring cloud computing, you gotta know what cloud computing is,” Britt said. “The thing about the government is we buy something as simple as pencils and we buy things as complex [as] space shuttles. And often we're buying stuff at the very bleeding edge of technology. We're buying stuff that doesn't exist yet. So how much does a sixth-generation, optionally manned, AI-enhanced stealth fighter cost? How much should it cost? I don't know. We're literally inventing as we go. So training is essential to understand what is state-of-the-art, what is possible, what's not going to work?”

While the industry experts thought the bill did a good job to try to address issues within the government procurement process, they felt there was also room for improvement, specifically around commercial-off-the-shelf––also referred to as COTS––software.

“The discussion around COTS can be a little bit more nuanced than it stated in the bill because there are a lot of government programs that are using COTS technically, but the problem is that they're customizing the COTS to such a degree that it almost becomes like a government-off-the-shelf-software,” Santiago said. “I think it's understanding like, what are the boundaries for using commercial software and being wise with how you architect your government solutions. For complex government information systems, there's often a mixture of different COTS offerings, and if it's architected well, [there] doesn't need to be a lot of heavy custom development, which, again, slows down the delivery process of delivering value to back [what] these missions are trying to realize. So, I think it would be interesting if the bill had maybe gotten just a little bit more nuanced.”