Towards a More Agile Government: The Case for Rebooting Federal IT Procurement

Like many government computer systems, the U.S. federal information technology (IT) procurement model is slow, outdated, and long overdue for a reboot. ¹ As the largest single purchaser of code, ² in fiscal year (FY) 2010 the Federal Government spent more than $77.1 billion on IT procurement, and that number is projected to grow higher by the close of 2011. ³ This is not a recent trend. Over the past decade, federal IT spending has swelled nearly seventy percent, up from $45.6 billion in 2001, ⁴ for a total bill of more than $500 billion. ⁵ This growth is partially a result of the unfortunate fact that as few as nine percent of projects are delivered on budget and on time. ⁶ The Government Accountability Office (GAO) reports that roughly forty-eight percent of all IT projects must be rebaselined, ⁷ and of those rebaselined projects, fifty-one percent must be rebaselined a second time. ⁸

Compounding the problem, end users fail entirely to use nearly forty-five percent of features procured and rarely use another nineteen percent of those features. ⁹ Thus, purchasing agencies ultimately utilize only about one-third of all features paid for by American tax dollars. ¹⁰ In the end, nearly forty-five percent of federally procured software features ultimately fail to meet the user’s needs. ¹¹ It is therefore no surprise that the Secretary of the Department of Defense (DoD) Robert Gates called federal IT procurement “baroque.” ¹² Too often IT procurement requirements are crafted with the input of neither end-users nor product developers. ¹³ As Office of Management Budget (OMB) Director Peter R. Orszag noted, federal IT projects cost more than they should, take longer than they should, and often fail to meet agency needs. ¹⁴ Today’s federal regulations shackle government agencies to outdated project management practices and prevent them from harnessing the true power of IT innovations, which have far outpaced the laws that govern them. ¹⁵

To better embrace innovation and respond to changing organizational needs, the Government must embrace a two-pronged approach involving both regulatory reform and top-down support for best-practices education to empower IT-procuring agencies to pursue more agile software development methods. By requiring that detailed specifications be outlined at the onset of the process, government procurement regulations encourage the less flexible, waterfall development techniques, rather than the more modern, agile development approaches used by the private sector today. ¹⁶ While most prior attempts to reform federal IT procurement focused solely on statutory changes, ¹⁷ this Note proposes more modern project management practices and argues for top-down reform on both a regulatory and a human level.

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Originally published in The Public Contract Law Journal, Vol. 41, Issue 1.

Notes:

This holds true for both civilian and military procurement systems. See generally Office of the Under Sec’y of Def. for Acquisition, Tech., and Logistics, Report of the Defense Science Board Task Force on Department of Defense Policies and Procedures for the Acquisition of Information Technology (2009) [hereinafter DoD Acquisition Report]. ↩
Jay P. Kesan & Rajiv C. Shah, Shaping Code, 18 Harv. J.L. & Tech. 319, 373 (2005). ↩
Trends, IT Dashboard, http://www.itdashboard.gov/export/trends_report (last visited Sept. 6, 2011). ↩
Id. ↩
White House Forum on Modernizing Gov’t, Overview and Next Steps 5 (2010). ↩
Victor Szalvay, Danube Techs., Inc., An Introduction to Agile Software Development1 (2004), available at http://www.danube.com/docs/Intro_to_Agile.pdf. ↩
DoD Acquisition Report, supra note 1, at 44. “Rebaselining” occurs when modifications are made to a project’s baseline, i.e. its cost, schedule, and performance goals, to reflect changed development circumstances. U.S. Gov’t Accountability Office, GAO-08-925, Information Technology: Agencies Need to Establish Comprehensive Policies to Address Changes to Projects’ Costs, Schedule, and Performance Goals 2, 13 (2008). Changes in requirements and objectives (scope creep) was the most commonly cited reason for rebaselining. Id. at 8. ↩
Id. ↩
Szalvay, supra note 6, at 8. ↩
Id. ↩
Gwanhoo Lee & Weidong Xia, Toward Agile: An Integrated Analysis of Quantitative and Qualitative Field Data on Software Development Agility, 34 MIS Q. 87, 88 (2010). ↩
Robert Gates, A Balanced Strategy: Reprogramming the Pentagon for a New Age, Foreign Aff., Jan./Feb. 2009, at 28, 34. ↩
See Vivek Kundra, U.S. Chief Info. Officer, White House, 25 Point Implementation Plan to Reform Federal Information Technology Management 17 (2010) (calling for “increased communication with industry” and “high functioning, ‘cross-trained’ program teams”). ↩
See Memorandum from Peter R. Orszag, Dir. of Office of Mgmt. and Budget, Exec. Office of the President, to Heads of Exec. Dep’ts and Agencies 1 (June 28, 2010) [hereinafter Orszag Memorandum] , available at http://www.whitehouse.gov/sites/default/files/omb/assets/memoranda_.... ↩
These inefficiencies are troubling, not only because they represent a significant financial cost to the taxpayer, but also because they undoubtedly represent a significant cost to the realization of agency goals. See Stanley N. Sherman, Government Procurement Management 30 (1991). As President Barack Obama recently noted at the White House Forum on Modernizing Government, “[w]hen we waste billions of dollars, in part because our technology is out of date, that’s billions of dollars we’re not investing in better schools for our children, in tax relief for our small businesses, in creating jobs and funding research to spur the scientific breakthroughs and economic growth of this new century.” Attachment B: President’s Remarks, in White House Forum on Modernizing Government: Overview and Next Steps 17, 18 (2010), available at http://www.whitehouse.gov/sites/default/files/omb/assets/modernizin.... ↩
DoD Acquisition Report, supra note 1, at 16-17 (noting many large corporations have gained a significant advantage from using agile). See White House Forum On Modernizing Gov’t, Overview And Next Steps 9 (“Federal IT projects are too often marked by milestones spaced too far apart.”). See generally infra Parts III-IV. ↩
See Ralph C. Nash, Jr., Solutions-Based Contracting: A Better Way To Buy Information Technology?, 11 Nash & Cibinic Rep. ¶ 17, at 60 (Apr. 1997). ↩