Procurement is where every other constraint compounds. Current models require lengthy cycles, lock in a single vendor before learning has occurred, and measure success at the end when it is too late to act on what was measured. No technical standard survives contact with a procurement model that prevents learning.
A proposed alternative exists that was expressly designed for Horizon 3 work and has been developed in collaboration with a nationwide workgroup: challenge-based procurement. Multiple vendors enter through a low-barrier process, demonstrate capability on real problems in the state’s actual context, and earn additional scope through delivered results. Awards are small and continuous rather than large and terminal, which keeps competition active for the life of the work and makes any single decision low-stakes. This model also largely dissolves the protest problem, which exists because individual awards are too large and the next opportunity is too far away.
With input from vendors and states across the country, we have published draft template artifacts for this model, including a challenge-based professional services RFP, a supporting master contract with work order structure, and a challenge-based software procurement template. The workgroup is currently running a dry run of the evaluation process against real initiative slices, with mock proposals submitted and scored by volunteer evaluators before any agency puts real money behind the approach. Evaluation results will be posted as they come in at procurement-workgroup.si-delivery.com. CMS could accelerate adoption nationally by recognizing challenge-based structures as an approved procurement pathway and providing reference templates as federal technical assistance.