Federal Tech Procurement for "Lean" Times

Dear Program Managers and Contracting Officers,

    You have probably heard that the Lean Methodology is sweeping the high technology industry and are now being taught at major business schools.  Here is a whirlwind survey of the concepts, and more important, the mindset that the Lean method requires.

LEAN

The federal acquisitions system is obsolete for the information age, and the military in particular has an imperative to change.   RFPs in the future will be a bit more general about the capability goals needed by a system.  In evaluating a vendor charged with a new technology, the key is that there is a robust, iterative learning process in the company.  Prototypes are tested, results are studied with rigorous quantitative analysis, and then adaptations are integrated into the new prototypes.

Proposals with cutting edge technology will have less detailed plans and milestones than established goods and services.  Product development will have a more scientific approach, with designs and features being tested constantly with customers, or control groups standing in for customers.  Feedback is then analyzed to determine things like if certain features fit the government’s needs, interfere with other government systems, and are profitable for the company etc. 

PROGRAM EVALUATION

As Program Managers, instead of focusing on hitting milestones at cost, on time, and up to par, the focus is on whether lessons of old iterations are being learned and adapted to.  It is a company that knows how to maximize its adaptability that ought to be awarded high technology contracts.

As for the business, once the product is designed, then the business model can be designed.  That is how a venture capitalist would determine viability.

CAUTIONS & JARGON

The Federal Acquisition Regulation (FAR) guides Contracting Officers to pick well run brick and mortar companies, of all sizes. Generally, a vendor with good past performance and solid financials is a sign of a good bet to award a federal contract.  To a Silicon Valley businessperson however, a well managed company is a perfect candidate for being disrupted by an innovation.  Thus, the type of futuristic product that the government should want, is often not what the FAR guides you to.

Another thing to beware of is that the culture of high tech is to bring everything in-house and vertically integrate.  That flies in the face of the government’s process oriented way both at the political level and the bureaucratic level. This will cause problems in meeting subcontracting goals.

MVP- a minimum viable product is produced after many prototypes’ features have been tested.  It minimally meets the customer’s needs.  The MVP is the new Milestone B, if you will.

Pivot- a “pivot” is to San Francisco what a change order is to Washington.  It simply means taking lessons learned from prior iterations of the products, changing the assumptions, and moving the design in a new direction.