Challenge-Based Acquisition, 3rd Edition

April 2018
Topics: Government Acquisition, Government Agency Operations, Systems Engineering, Acquisition Management, Military Planning
Stephen W. Roe, The MITRE Corporation
Larry L. Jennings, The MITRE Corporation
Ryan M. Novak, The MITRE Corporation
Dr. Mike Arendt, The MITRE Corporation
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This document describes how the government, to include civilian agencies, the Department of Defense, and Intelligence Community, can procure solutions using Challenge-Based Acquisition (ChBA).

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 successful acquisitions.

The Federal Acquisition Regulations (FAR) encourages approaches such as ChBA: “…absence of direction should be interpreted as permitting the Team to innovate and use sound business judgment that is otherwise consistent with law and within the limits of their authority. Contracting officers should take the lead in encouraging business process innovations and ensuring that business decisions are sound…”

ChBA is especially appropriate in situations where the government’s need is urgent and time critical, where no traditional solution seems viable, or where emerging technologies have the potential to provide non- traditional solutions. It does not represent a good approach for large, multi-year major system acquisitions; however, within these types of programs, ChBA may have a role in the acquisition of subsystems or components.

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.

This document provides a detailed description of ChBA and why it represents a superior mechanism for many acquisitions. It lays out how to construct a challenge and how to fashion the evaluation and compensation mechanisms that accompany it. It proposes acquisition strategies that fit different circumstances and provides several case studies demonstrating successful application of ChBA.

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