Agile acquisition: The 7 steps for agile buying

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Uncertainty requires agility. Where uncertainty is high, a learning system based on iteration and feedback is required. Agile methodologies provide such a system. Teams that adopt these techniques focus on delivering value, improving quality, and using feedback to ensure products meet mission and goals.

Acquisition practices require the same Lean Thinking. Unfortunately, many government acquisition practices assume the entire project can be completely defined up-front, when we know the least; that priorities will not change significantly; that innovation can be completed on a predictable schedule; and that all required program expertise can be found in a single vendor.

These practices often undermine Agile delivery methods; make it difficult for government to apply price and performance pressure throughout the lifecycle; require bureaucratic change control processes; and make changing underperforming vendors difficult and disruptive.

Many believe reform of acquisition laws and regulations are needed to accommodate Agile delivery techniques. But most current laws already allows for adaption of Agile, even encouraging it in some places. There are seven steps government can take to adapt existing acquisition practices to support Agile delivery techniques and deliver more value, faster.

STEP 1. USE MODULAR ARCHITECTURE Use modular architecture to define smaller, less risky, more manageable product boundaries that limit dependency on individual vendors, and enable modular acquisition. Shift the role of architecture – from a product development deliverable, produced after product development contract award, to a product architecture and planning deliverable, developed in advance and used to segregate and drive specialized product development contract actions.

STEP 2. SEGREGATE SERVICE REQUIREMENTS Most vendors do not have a full suite of capabilities that align with all services needed to deliver a complex program. Segregate service requirements to engage specialists to deliver discrete services. Separate architecture and integration services from product development, so that specialists can be engaged to develop discrete products (components) within the architecture.

STEP 3. USE MULTI-AWARD INDEFINITE DELIVERY VEHICLES (IDVS) OR MASTER SERVICE AGREEMENTS (MSA) Use IDVs or MSAs to establish a pool of pre-qualified product development vendors so agencies can quickly and conveniently engage competent, qualified, and price competitive service providers to deliver products (within the modular architecture). This provides the flexibility to contract product development services on a release basis and to switch to a new vendor within the IDV / MSA pool without significant disruption.

STEP 4. USE STREAMLINED VENDOR SELECTION PROCEDURES Use competency, past performance, and rate card evaluations to qualify vendors for admittance to the contracting pool. Select vendors and acquire product development services from the contracting pool by applying streamlined vendor selection procedures that heavily favor competitive prototyping and relevant past performance.

STEP 5. BASE TASK ORDERS ON RELEASE PLANS Product Development contracts should be based on a Performance Management Baseline (PMB) that includes schedule, budget, and technical baselines. A properly defined Agile Release Plan includes each of these components. Use Release Plans to incrementally contract for product development services and as the basis for defining task orders around mutually approved technical, cost, and schedule baselines.

STEP 6. TIE PAYMENTS TO WORKING SOFTWARE Contract performance measurement and payment schedules should be focused on what is most important: delivery of high quality software. This is best accomplished when deliverables are defined as working, high-quality software features. Directly tie payments to acceptance of software features. Use the release planning process to define a fixed price payment continuum for delivery of in-scope features and stories.

STEP 7. CONTINUOUSLY MEASURE AND IMPROVE Use vendor management and rigorous inspect and adapt metrics to drive continuous performance improvements and to monitor vendor performance and progress. Metrics provide early warning signs about vendor performance and the need for preemptive improvements. They also provide a quantitative basis for electing to source delivery of future releases through an alternative vendor and for negotiating performance-based release development task orders.

These steps comply with federal law, the Federal Acquisition Regulations, and state-specific laws. To realize the benefits of Agile soon, you just need a willingness to experiment and a desire to rapidly deliver program value and results.

For more information contact Public Sector Managing Director Graeme Finley.