14.4. Agile Procurement

Robert Merrill, a Senior Business Analyst at the University of Wisconsin-Madison, and an Agile coach, points out that “many procurement processes naturally follow or even mandate a negotiation-based approach that is directly at odds with the kind of living order thinking found in the Agile Manifesto, which emphasizes ‘collaboration over contract negotiation’” (pers. comm., June 15, 2018). Nevertheless, some organizations and governments are beginning to rethink their procurement processes in hopes of making them more Agile and, as a result, less costly.

One interesting example is an ongoing overhaul of the State of Mississippi’s child welfare information system. After some initial missteps, the state emphasized identifying and contracting with many qualified vendors on portions of the project, rather than attempting to hire a single entity to create the entire information system. A blog post published by 18F, an arm of the U.S. government’s General Services Administration, which guided the project, describes Mississippi’s new approach to an age-old software development dilemma:

•  Mississippi’s initial response to solving this problem was a classic waterfall approach: Spend several years gathering requirements then hire a single vendor to design and develop an entirely new system and wait several more years for them to deliver a new complete solution. According to the project team at Mississippi’s Department of Child Protection Services (2016), this “sounds like a good option, but it takes so long to get any new functionality into the hands of our users. And our caseworkers are clamouring for new functionality.” (Cohn & Boone, 2016, para. 2). Instead, they’re taking this opportunity to build the first Agile, modular software project taken on within the Mississippi state government. They’re starting with how they award the contracts to build it.
• Once this pool of vendors is selected, instead of awarding the entire contract to a single company, Mississippi will release many smaller contracts over time for different sections of the system. This is great for Mississippi. Inspired by the Agile approach, they’ll only need to define what needs to be built next, rather than defining the entire system all up front.
• This is also great for vendors. More minor contracts mean smaller vendors can compete. Small businesses can’t manage or deliver on large multimillion-dollar software development contracts and so are often precluded from competing. But with this approach, many contracts could end up in the single-digit millions (or less!). Smaller contracts mean more small businesses can compete and deliver work, resulting in a larger and more diverse pool of vendors winning contracts and helping the state.
• Approaching the project in a modular, Agile fashion can be more cost-effective and less risky than a monolithic undertaking. To do it, they plan to take an approach called the “encasement strategy,” under which they will replace the system slowly over time while leaving the legacy system in place. It will work like this: The old database will have an API layered on top of it and then a new interface will be built, one component at a time, without risking the loss of data or major disruptions to their workflow. Each module will be standalone with an API interface to interact with the data and the other modules. If they decide to replace a module five years from now, it won’t really impact any of the others. (Cohn & Boone, 2016)

“Procurement” from Technical Project Management in Living and Geometric Order by Jeffrey Russell, Wayne Pferdehirt and John Nelson is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.