When a procurement is not a procurement

As the size and nature of the federal procurement system changes, there are constant reviews and criticisms, and innumerable efforts to reform and improve the process. Most have their foundation in the common Federal Acquisition Regulation, recommending ways to improve agency and contractor use of the provisions and flexibilities that the FAR has or should have.

But federal agencies — with endorsement from the White House — are increasingly tapping a parallel universe of what are known as “prizes and challenges” to bypass the FAR and agency procurement processes and bring innovation to government. NASA used special legislative authority to challenge the private sector to develop a commercial capability to reach low earth orbit, for example, and the Defense Advanced Research Projects Agency conducted its highly publicized “grand challenge” for robotic cars that drive themselves...