Challenge Industry to Demonstrate Solutions

Challenge-Based Acquisition (ChBA) is based on the concept that Government agencies can best perform acquisitions if they present the solution to be acquired as a need (the challenge) and potential providers are free to propose innovative solutions that fill the need. Challenges are issued in terms of operational needs and are accompanied by mechanisms for evaluating proposed solutions and contractual terms for provider participation. Typically, solutions take the form of simplified implementations, and evaluations assess how well a solution satisfies the need. Following the guidelines provided in this document, a well-crafted challenge, accompanied by clear, transparent, and effective assessment methodologies, and appropriate contracting vehicles, leads to acquisitions that maximize innovative solutions and can significantly reduce the cost, schedule, and performance risks associated with acquiring innovative technology.

ChBA is especially appropriate in situations where the Government’s need is urgent and time-critical, where no traditional solution satisfies the need, or where emerging technologies have the potential to provide non-traditional solutions. While it does not represent an optimal approach for large, multi-year major system acquisitions, ChBA may have a role in the acquisition of subsystems or components within those major acquisitions.

Departing from the norm of traditional federal acquisitions, ChBA does not presuppose one specific solution; instead, it demands that industry propose innovative solutions. Consequently, the Government must not prescribe a specific technological path that industry must follow but must rather present its requirements in the form of general challenge objectives that proposed solutions must meet. Industry then applies its expertise to determine the best technical approach to meet the objectives within the schedule and cost constraints provided by the Government. ChBA is a mechanism to communicate the needed capability, encourage innovation in a minimally prescriptive environment, assess candidate offerings based on demonstrated capabilities, and purchase the proven solution(s).

With ChBA, a Government agency selects solutions based on demonstrated capability rather than written proposals alone. When a viable solution is demonstrated in real-world operational conditions, the Government needs a streamlined process to swiftly procure it for subsequent testing, fielding, or continuous capability improvement. ChBA, supported by the Federal Acquisition Regulations (FAR) and Other Transaction Authority (OTA), offers one such approach to greater acquisition efficiency.

Several acquisition strategies are available for ChBA. The choice of strategy depends on circumstances— acquisition objectives, available time, complexity, technology ambiguity, challenger pool size, and acquisition scope. Some options include multiple award Indefinite Delivery/Indefinite Quantity (IDIQ) contracts for evaluation and procurement, Broad Agency Announcements (BAAs) for technology creation followed by competitive procurement, BAAs exclusively for intellectual property creation, and Other Transaction Authority (OTA) for prototypes and demonstrations with a subsequent transition to a procurement. In all cases, using the guidelines in this document to create a pool of qualified offerors, followed by successive evaluation cycles, should lead to a successful procurement that adheres to all Government regulations.

Case Studies

Actions You Can Take
  • Step 0 – Read the Challenge-Based Acquisition Handbook and consult with an expert …
  • Step 1 – Understand your acquisition objectives
  • Step 2 – Design the challenge
  • Step 3 – Plan the contract
  • Step 4 – Communicate capability needs
  • Step 5 – Establish initial pool
  • Step 6 – Conduct challenge event
  • Step 7 – Evaluate challenge results
  • Step 8 – Reduce challenger pool
  • Step 9 – Procure Solutions
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