— by Chris Cairns and Robert L. Read, PhD

This is the first post in a four-part series.

“Simply put, the missions of government cannot be achieved if only traditional contract methods are used. There is not enough in the budget to make that happen.” — Larry Allen

I’ll start by expressing that it’s great to be collaborating with Dr. Rob Read again. As fellow co-founders of 18F, we started and built the team’s acquisition arm, including Agile Acquisition Consulting, Agile Delivery Services Marketplace, RFP Ghostwriting, Micro-purchase Marketplace, and Digital Acquisition Accelerator.

Over the past several weeks we got together, put on our acquisition propellor beanies, and imagined a world in which the private sector eagerly and confidently invested its own capital to modernize the federal government’s legacy systems, thus presenting a virtuous cycle of possibilities:

Agencies could award contracts with “zero” money down (exceptions apply). Funds heretofore locked-up in cost-inefficient systems could be set free. Those extricated funds could be apportioned as payments back to firms for higher-than-normal profits (performance motivation). Remaining funds could be retained by agencies for reinvestment in innovation and modernization projects. Large swaths of antiquated systems could finally meet the 21st century, making government more efficient, effective, secure, flexible, and resilient.

The kicker: this is mostly possible under existing regulations (1, 2, 3, and 5 above) and completely so with a resurrection of old legislation (4). It’s called share-in-savings (SiS) contracting. Unfortunately, this ultimate form of performance-based contracting has yet to take root in the federal government, although attempts were made around the early 2000s. We believe that we’re seeing a confluence of factors that warrants a revisit:

Taken together, these are compelling drivers.

So how can the federal government agencies move forward with SiS contracting successfully a second time around, specifically to address their legacy-systems crisis? That’s the big question that we’re going to try to answer in this four-part series.

In our next post, we’ll give a short, riveting history lesson on the government’s experience with SiS IT contracting. Following that one, we’ll talk about the challenges encountered and our ideas for addressing them. And for the grand finale, we’ll present our proposed solution model, which we call Agile Share-in-Savings, or ASiS if you’re short on time. (Pronounced “a-sys”, not “ass-es”.)

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Special thanks goes to Drs. Steve Kelman and Kenneth Buck for allowing us to tap into their expertise on share-in-savings contracting.