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takes wing
A recent report on agencies’ prize challenges tells only half the success story behind this novel procurement approach
What the General Services Administration calls “chal- lenges” are a way for the government to buy solutions by announcing a specific goal and inviting anyone who is interested to submit a solution. In response to those solutions, the government might award one or more monetary prizes to winners.
In the space of a few short years, the approach has emerged as the most significant innovation in govern- ment procurement in recent memory. I would go further and say it is one of the most important recent innova- tions in federal public management more generally.
Like many brilliant ideas, the technique helps with several problems at the same time. It is the ultimate in “pay for success” contracting because only good solutions receive prizes — and if nobody can solve the problem, no prize is given.
Challenges also have a demonstrated ability to attract nontraditional players into the government marketplace. Responses are dominated not by gov- ernment contractors but by students, academics and garage entrepreneurs. And the government can offer winners less prize money because they also receive visibility, prestige and validation.
The Office of Science and Technology Policy recently published a report on the use of prize challenges in the federal government in fiscal 2015. Let’s start with the raw numbers: In that year, 41 agencies conducted prize competitions, up from 30 in fiscal 2014. That’s not a small number. Among the first-time agency partici- pants were the Agriculture Department, the National Institute of Standards and Technology, the National Oceanic and Atmospheric Administration, and the Office of Management and Budget.
The number of prize competitions rose from 90 in fiscal 2013 to 97 in fiscal 2014 and 116 last year. And the
I would go further and say \[GSA’s\] is one of the most important recent innovations in federal public management more generally.
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