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White House Innovation Fellows Project Spins Off Into A Business

BY Sarah Lai Stirland | Wednesday, May 15 2013

The White House on Wednesday published the results of RFP-EZ, a pilot project to simplify procurement.

Clay Johnson and Adam Becker joined the Presidential Innovation Fellows program to help the White House fix the way government does business. Now they're turning that mission into a business themselves.

Johnson and Becker spent six months as government fellows working on a pilot project called RFP-EZ, a web service the Small Business Administration could use to contract with small firms on contracts under $150,000. (Presently, Johnson explains, it's a bureaucratic nightmare for small businesses to compete for government work.) They developed a platform for SBA and released it as open-source software.

Now they're starting "The Department of Better Technology," a startup firm to do similar consulting for other governments — and possibly even help them make use of the software they've already written.

"We'd like to show government that commercial entities can build pretty good and complicated software for less than $200 million," Johnson said in an interview.

They've renamed the open-source product Procure.io. Johnson and Becker want to go to work for cities, launching pilot programs that would run over the course of the next year and either charging consulting fees or licensing fees for a cloud-based service. They're also working with Code for America on projects started by CfA fellows, technologists who take one-year tours of duty through city halls in various American cities and towns.

The White House published a blog post Wednesday announcing that it found RFP-EZ diversified its bidding pool and generated bids that were on average 30 percent lower than what the government received elsewhere.

The businesses that won the bids are still working on the projects, and all the applicants new to the process still had to go through the same level of vetting as the previous base of bidders, said Andrew Lee, the SBA's office of investment and innovation's entrepreneur-in-residence & senior advisor.

"We place the same requirements on these companies as we do regular contractors, meaning we look at their proposals with the same amount of scrutiny and make sure their previous work shows that they can deliver," he said in an e-mail.

The system tries to streamline the process of procurement for smaller projects by creating statement-of-work templates for procurement officers, which small businesses can then respond to online by registering and creating a profile. Procurement officers can browse through responses online with the software, and examine the backgrounds of the bidders and their work and pricing histories through their completed profiles.

Local and state governments have their own, often byzantine, legal obligations on procurement projects. They vary from government to government, so it's unclear how individual cities will be able to balance their obligations with a desire to lower costs.

In Chicago last year, a group of developers tried to bid on a project to build a lobbyist registration database but couldn't because they had to fill out 150 pages of forms, provide the city with three years' worth of audited financial statements, as well as meet various insurance liability requirements.

In an interview, Johnson acknowledged that one of the biggest hurdles is convincing procurement officers to sign up for this new way of doing business. He argues in a recent blog post that one way of changing this might be to create some sort of new program to train procurement officers on marketplace trends in emerging technologies and pricing.

"For Procure.io, the most challenging part of this is getting the contracting officer community to buy in on this. These are people whose job it is to mitigate risk, so when you walk in with the title 'presidential innovation fellow,' they're naturally afraid of you, and for good reason. They're the people whose names are on the proverbial checks," he said. "The back end of government is where I think a lot of Procure.io is focused, and it's really where a lot of open government projects tend to ignore. The systems that governments use to express data, or uses to approve a contract, or to negotiate what prices are, are the worst pieces of software I have ever seen, and it's what we're trying to give government the ability to fix."

And though the subject of procurement may sound profoundly unsexy, it's a big market. On the federal level alone, as the White House' blog post points out, it's a $77 billion market for information technology.