
Open Source Micro-purchasing: An experiment in federal acquisition - molecule
https://18f.gsa.gov/2015/10/13/open-source-micropurchasing/
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zacharycohn
I'm from 18F and will be paying attention to this thread throughout the day.
Feel free to ask any questions - we'll do our best to answer them!

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bicknergseng
Pretty awesome experiment, but I feel like this just falls into the same ol'
"lowest bidder to meet the absolute minimum" trap. Is there any thoughts on
introducing some notion of quality? It seems to me like "lowest price" is not
really what you want, but rather "best quality while staying within budget."

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tssva
When bidding out work and using micro-payments lowest cost is the only
criteria allowed without additional justification and accompanying paperwork
which would usually negate any benefits of using micro-payments.

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laurencerowe
(Reposting with additions from duplicate
[https://news.ycombinator.com/item?id=10384792](https://news.ycombinator.com/item?id=10384792))

It'll be interesting to see if this works. I rarely found it worth my while
engaging in a job with a new client if it billed under 10-15 days. $3500 is
only a few days work, so they'll have to ensure the administrative overhead in
bidding and billing is minimised.

> Whoever has the lowest bid at the closing time will have 10 working days to
> ship the code necessary to satisfy the criteria. If the criteria are met,
> the vendor gets paid. It's that easy. If the criteria aren't met, the next
> lowest bidder gets 10 working days to ship the code. In order to make this
> work, we will provide acceptance criteria, instead of requirements. This
> limits the possibility of misinterpretation and ensures the quality of
> delivery.

I fear that the focus on tight acceptance criteria may encourage gaming the
system. There's no incentive for the contractor to do more than the bare
minimum. Even if you gain a reputation with the procuring team of being
reliable they still have to go with the lowest bidder for the next job.

For contractors, the optimum strategy would seem to be bid without spending
any time coming up with an implementation strategy, then drop any jobs you win
that don't seem worthwhile after a few hours working out how to implement it.

Ultimately this becomes a test of how well the jobs can be specified. For this
to be efficient they have to include the time spent internally preparing and
assessing the result vs working over a longer periods with people with whom
they can build a trusting working relationship.

It might be more efficient to rely less on price competition and more on
reputation. That would make it a low overhead system for engaging trusted
contractors on individual tickets. There'd be far less preparation required in
defining very tight acceptance criteria.

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ATsch
Absolutely. I could imagine a system where the job goes to the lowest price *
reputation, with lower (which in this case means better) reputation causing
you to win the bid even if other companies bid lower.

Assigning reputation in a system with financial incentives is a challenge in
itself too. If reputation is decided in a non-transparent process, such as
members of 18F deciding, the system is ripe for bias, e.g. towards companies
with ex-collegues, friends or aquaintances. Any public form of online voting
is subject to manipulation, closed voting of the companies involved would leat
to a conflict of interest as companies have no incentive to distribute
reputation fairly, and raising and lowering reputation depending on if the job
was done or not allows companies to do the contract with the lowest effort
possible, leading to the problem the above poster described.

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sputknick
Former federal employee. I really really hope this works, I think it's a great
idea and a great "hack" on the procurement system. I think they will
ultimately get shut down, there are too many people in the "chain" that want
to have control over procurement. Not just management on the federal side, but
also procurement on the federal side, and management on the contracting side.
Too many people have too many processes in place for the traditional
procurement system to allow this to continue.

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dlightman
This will be fun to watch, but the reverse auction will not work. It will get
bid to $0.01, by someone looking to get a "foot in the door" with the
government.

Watch this space, with enough marketing, you are about to see all the 1000s of
companies constructed with no real skill, only certifications (Veteran-owned,
HUBZone, Woman-owned, Alaskan, Minority, etc), flood the market with
unrealistic bids.

The critical path issue with government procurement of information technology
is not cost alone... it's with the insistence of the customer to require a
custom solution, and the inability to describe the requirement, and thus,
technical acceptability.

What this project will do, is show that even when boiled down to very micro,
unscalable size, "lowest price, technically acceptable" (LPTA) is an
inappropriate purchasing pattern for non-commodity information technology, or
more any non-commodity, really.

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reilly3000
Why is $3500 the magic number?

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ourmandave
So $3500 is considered "pay for it out of petty cash".

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protomyth
Yep. Reading the federal rules on the difference between equipment and
supplies is a good way to understand some of the "fun" in federal budgets.

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emmab
Why are you making rate directly dependent on having a degree?

