DARPA Grand Challenge is not Acquisitions

Steve Kelman’s article in the November 21st issue of Federal computer Weekly is either a parody or totally overstepping his understanding of the situation. He gets it right in the second sentence when he says DARPA was “…seeking to encourage development of technology that can be used for riderless vehicles in battle.” After that, it goes down hill.

Four sentences later, he lays out the premise that poisons the rest of the article: “The Grand Challenge could be seen as an innovative procurement process – procurement by contest.” Stop. Nobody ever said anybody was procuring anything. Based on his background, Steve surely knows this. Yet, he continues with irrelevant discussion.

“The biggest problem” is that DARPA offered the prize money “without regard to how much the individual or team had spent.” Uh.. so… and the point is?? Prize money isn’t proportional to what a contestant spends. DARPA paid a value they thought the gain was worth. That is disconnected and irrelevant to how much it costs to get there. Microsoft used to sell software this way, by the way. It used to be that you pay your fees and get to use the software to make as much money as you want. Sometime around the year 2000, the licensing changed and now Microsoft charges companies for multiple use licenses based on what you accomplish with the software. Pretty sad, but I see more and more of our society going to this tangled co-risk mentality. Socialized business risk, sort of. Yuk.

“Contest rules didn’t allow the government auditors to check the winner’s cost”. And so… what’s the point? It’s annoyed me anyhow that many government contracts demand accounting procedures from a contractor that “allow government insight into how they spend money.” That seems pretty invasive to me. What if the way I spend money is my original method, a trade secret that gives me competitive advantage, and I don’t want you to know how I make great widgets at half the cost? What if my business model is built on equity and trust rather than debt and cash flow? I don’t *want* you to know my secret for success or my secret for retaining good employees. Go away; I don’t want you to see my costs.

“Simply as a new buying method, the Grand Challenge created risks DARPA might not have known about initially, but they could come back to haunt it.” Steve, again I say, the DARPA GC never was a buying method. What is your point? I think you’ve really missed the point. Either that, or I miss your humor.