Using Commercial Competition to Replace Major Failures

Issue: Major information technology (IT) investments frequently exceed original cost and schedule estimates and, in some cases, deliver very little useable capability. One key driver of these outcomes is the continued preference to develop solutions in-house rather than structure programs to allow for increased use of existing commercial solutions that can be rapidly deployed, often under firm-fixed price arrangements. Not only does the current approach overwhelmingly put the risk of cost overruns on the government, rather than the contractor, but the lengthy development schedules also put the government further and further behind the rapid pace of technological innovation taking place in the commercial market.

Recommendation: Agencies should be given tools that allow them to “off-ramp” failing IT investments in both development and sustainment and “on-ramp” newer, more innovative commercial solutions. Certain frameworks already exist to form the basis of such tools. Tanks, planes, and other major “hardware” programs are typically presumed terminated if they experience excessive cost or schedule growth. Such accountability measures could be applied to major IT investments but also tweaked to include clear mandates to replace such failures with commercial solutions under firm-fixed price contracts with fixed, shorter delivery schedules. These measures would prevent the current “too big to fail” mentality that often governs major IT investments, shift risk from the government to the contractor, and force agencies to structure programs in a manner that requires rapid, agile delivery of useable capabilities – as is standard practice in the commercial marketplace.