Procurement contests pooh-poohed by an unlikely source

In a contracting world in which the climate for innovation has been terrible for a decade, one bright spot on a dim horizon has been a surge in the use of contests as a procurement tool. The basic idea of a procurement contest — sometimes called a prize or challenge — is to set out a performance requirement for a capability that needs development work and offer a prize, usually money, for the first or best entity to produce a product or capability meeting the requirement.

Contests engender a lot of effort, and you pay only for results. Keep in mind the caveat: if it is a risky undertaking that may well fail, you need to be willing to pay more than you would have for a level-of-effort traditional procurement. The push for greater use of contests as a procurement technique has gotten the official blessing of the Office of Management and Budget, which has doubtless helped things along. Interest in contests has grown in the private sector as well, with an entire company, Innocentive.com, acting as a platform through which private firms can advertise contest opportunities. NASA and some other government agencies have been using Innocentive as well.