Diet tip: Only bite off what you can chew and swallow

One way to make procurement more efficient, from the perspective of contract management structure, is to put everything under one contractor. One way to keep costs down and deliverables more effective is to bite off only what you can chew.

There are many goals and ideals used to describe "effective" procurement, but they involve trade-offs. That is one of the most aggravating things about implementing a procurement regime for the ages. And why it hasn't happened yet.

Contracting Guidance to Support Modular Development, Office of Management and Budget Report

This guidance presents a variety of factors that contracting officers, in support of IT managers, will need to consider as they plan for modular development efforts, such as whether to award to a single vendor or multiple vendors; how to ensure that there is appropriate competition at various stages in the process; how broad or specific the statements of work should be; when to use fixed-price contracts or rely on other pricing arrangements; and how to promote opportunities for small business

It is primarily focused on outlining acquisition guidance to support modular development approaches.

Federal agencies have traditionally taken a multi-year “grand design” approach for developing, modernizing, and enhancing investments in IT. This approach is grounded in the common notion that responsible development necessitates a full detailing of requirements before work can start.

Although a seemingly reasonable assumption, practical evidence and private sector experience has shown that large and complex IT implementations often encounter cost and schedule overruns, as the painstaking process of requirements gathering too frequently takes years to complete. Subsequently, agencies lose visibility into the performance of these multi-year IT development investments which affects their ability to implement corrective actions that reduce risk or mitigate financial exposure.

The Government increases investment risk in these situations because: (1) the IT solutions that had once addressed agency requirements may no longer be pertinent or a priority; (2) substantial funds are allocated towards outdated solutions without any returns on the investments; or (3) agencies encounter budgetary constraints before substantive work is completed.

To help resolve these issues, modular approaches should be used in the development of IT investments, allowing agencies to implement significant capabilities for investments through the use of modular solutions that can be defined, developed, and deployed within months instead of several years.

Modular approaches involve dividing investments into smaller parts in order to reduce investment risk, deliver capabilities more rapidly, and permit easier adoption of newer and emerging technologies. Section 5202 of the Clinger-Cohen Act of 1996 and section 39.103 of the Federal Acquisition Regulations (FAR) each recognize these potential benefits of modular contracting and state that agencies ͞should, to the maximum extent practicable, use modular contracting for an acquisition of a major system of information technology.

Furthermore, OMB Circulars A-130 and A-11, as well as the Capital Programming Guide, include modular development and contracting approaches for capital asset acquisitions in general, which also readily apply to acquiring and developing investments in IT.

By following a modular approach, agencies can recognize the following benefits:

-- Delivery of usable capabilities that provide value to customers more rapidly as agency missions and priorities mature and evolve;

-- Increased flexibility to adopt emerging technologies incrementally, reducing the risk of technological obsolescence;

-- Decreased overall investment risk as agencies plan for smaller projects and increments versus “grand design” (each project has a greater overall likelihood of achieving cost, schedule, and performance goals than a larger, all-inclusive development effort);

--Creation of new opportunities for small businesses to compete for the work;

-- Greater visibility into contractor performance. Tying award of contracts for subsequent Task Orders to the acceptable delivery of prior projects provides agencies better visibility into contractor performance and allows a greater opportunity to implement corrective actions without sacrificing an entire investment;

-- An investment can be terminated with fewer sunk costs, capping the risk exposure to the agency when priorities change, a technology decision doesn’t work or the contractor’s performance doesn’t deliver results.

Read more at the link above.

Government IT Projects Pushed To Use Modular Contracting

The goals of the updated policies include breaking down contracts into more manageable pieces and turning projects around more quickly. VanRoekel and Jordan said the new policies will increase contractors' accountability by requiring more frequent deliverables that meet agencies' requirements. They also will encourage increased competition by putting more projects within reach of small businesses.