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OSTP Innovation Toolkit Memo

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January 13, 2015

MEMORANDUM FOR DEPUTIES COMMITTEE ON INNOVATION POLICY

FROM: TOM KALIL, DEPUTY DIRECTOR, OFFICE OF SCIENCE AND TECHNOLOGY POLICY

    JASON MILLER, DEPUTY DIRECTOR, NATIONAL ECONOMIC COUNCIL

RE: BUILDING AND USING THE INNOVATION TOOLKIT

Summary

The refresh of President Obama's Strategy for American Innovation will highlight the importance of a set of approaches (the Innovation Toolkit) that Federal departments and agencies can use to:

  • Promote innovation externally in our economy and our society, and harness innovation that is related to agency missions.

  • Tap the ingenuity and creativity of the American people to address important local, national and global challenges.

  • Deliver better results at lower costs for the American people, by, for example, shifting resources to policies and programs that work.

  • Increase the effectiveness and agility of the government through improvements in the core processes of government – such as people and culture, procurement, grant-making, digital services, performance management, and internal and external collaboration.

This effort has important synergies with a number of other Administration activities, including the President's Management Agenda, the activities of several of the CXO Councils, efforts to improve the delivery of IT services led by the United States Digital Service and GSA's 18F, the Administration's "evidence" agenda, and efforts to increase the number of agencies with "Chief Innovation Officers."

At the Innovation Deputies meeting on January 14, Deputies will be provided with an update on the recent progress that has been made on the Innovation Toolkit, and in particular, the decision of OMB and six agencies (Commerce, Education, GSA, HHS, SBA, Treasury) to provide funding for an Idea Lab in the President's FY16 budget request. Idea Labs can help agencies increase their effective use of the approaches included in the Toolkit.

Deputies (on behalf of their agencies) will also be asked to:

  1. Help organize, develop, share and update content and resources that are related to the Toolkit, in those areas where they have experience in effectively using a given approach. Examples of tools with corresponding candidate agency leaders are in the appendix.

  2. Organize a brainstorming session and report back by February 11, 2015. The brainstorming session should identify ways in which agencies will increase the awareness and effective utilization of the Toolkit in 2015 and beyond, and to identify opportunities for Administration-wide efforts.

What would success look like?

In order to be successful, more agency personnel will need to (1) be aware of the existence of the Toolkit; (2) understand why and under what circumstances they might want to use these approaches; (3) have access to resources that enable the effective adoption of these practices, such as well-organized online material, mentors, vibrant communities of practice, training, experiential learning; and (4) have support from agency leadership for experimentation and intelligent risk-taking, and be rewarded professionally for use of the Toolkit.

The Toolkit should also (1) evolve over time; (2) be embraced by future Administrations; (3) increase the allure of public service; (4) inform executive actions and bipartisan legislation to eliminate barriers to the use of these tools, and to create new ones; and (5) be informed by research and bodies of knowledge about the effectiveness of these approaches.

The effective use of these approaches will allow more Federal employees to:

  • Recruit and hire the best and brightest entrepreneurs, scientists, and technical experts in weeks, not months, luring top talent with the prospect of "making a dent in the universe" by tackling important national and global challenges

  • Make open data the default, and encourage entrepreneurs and developers to create compelling applications that take advantage of it

  • Use approaches to contracting (e.g. Other Transactions) that allow the Federal government to engage with entrepreneurial firms that can deliver more bang for the buck

  • Tap the distributed expertise of the American people to make better decisions, given the importance of Joy's Law ("no matter who you are, the smartest people work for someone else")

  • Design an effective incentive prize that serves as a magnet for good ideas from start-ups and citizen inventors

  • Find and fix regulations and policies that stifle public and private sector innovation

  • Invest in research that is potentially transformative – e.g. pursuing Grand Challenges such as solar energy as cheap as coal, understanding the human brain, destroying cancerous tumors while leaving healthy cells untouched

  • Use human-centered design and "Lean Startup" processes to significantly improve delivery of government services and the experience of interacting with the government

  • Launch high-impact multi-sector collaborations involving companies, foundations, non-profits, researchers, regional initiatives and skilled volunteers

  • Drive more Federal resources to support cost-effective interventions using an "experiment, validate, scale" approach to grant-making

  • Pay for outcomes, not inputs, and support policies and programs that are "more what and less how"

  • Design Federal policies and programs in ways that are informed by how people actually make decisions

Agency roles in building the Toolkit

Some agencies already have a track record of successfully using specific tools. They will be asked to play a leadership role in helping to organize, develop, share and update content and resources that are related to the Toolkit.

In some cases, the Administration will be able to take advantage of existing communities of practice, such as communities of practices for incentive prizes and crowdsourcing, or investments that external organizations have made. For example, the Rockefeller Foundation has supported the development of a comprehensive set of resources for "pay for success" approaches. See http://payforsuccess.org/

Lead agencies will be asked to identify an agency point of contact that can help develop a minimum viable product for a particular component of the Toolkit. This will include content that addresses:

  1. The key benefits and rationale for using this approach, and when to use it

  2. Examples of how agencies (or the private sector) have used it (case studies)

  3. The relevant law, policy, regulation or guidance that governs the use of this tool

  4. Resources (e.g. communities of practice, training, checklists, templates, playbooks, online courses, video interviews with experts and practitioners, tips and key areas/issues in implementation) that are available to help agency personnel use it

  5. Links, annotated bibliography for additional details

  6. Directory of experts

GSA will play an important role (working with communities of practice and subject matter experts across the government) in creating a "hub" for the Innovation Toolkit. The President's FY16 budget request has resources for GSA to support:

  • Government-wide platforms for promoting innovation such as Challenge.gov, which won Harvard's 2013 "Innovations in American Government" Award. Another example is Midas, a platform for "crowdworking" which allows agencies to create more fluid labor markets. The State Department is using it to enable junior Foreign Service Officers with advanced degrees who are stamping visas to participate in more challenging projects.

  • Information and online training to help agency employees and their external partners use the Innovation Toolkit.

  • Lightweight institutional support for the government-wide communities of practice that are beginning to form around these issues.

Agency roles in encouraging awareness and use of the Innovation Toolkit

Agencies will be asked to organize an internal brainstorming session that brings together leadership from across the agency to generate ideas for awareness and use of the Toolkit, and report back by February 11, 2015 with a summary of initial observations and planned next steps. To keep these conversations manageable, it may be necessary to focus on the three or four tools where agencies believe broader adoption would be most impactful.

Possible topics and questions to address include:

  • Focus: What are specific agency problems where Innovation Toolkit approaches could generate some initial wins? Identify "early adopters" within the agency that are intrinsically motivated to adopt specific tools and just need permission or small amounts of time, training and funding.

  • Leadership: Develop a strategy to identify and/or recruit leaders such as Chief Innovation Officers and innovation leads in key functional roles such as USAID's Chief Innovation Counsel. Provide clear and repeated messages from senior agency leadership.

  • Incentives: What are meaningful incentives and forms of recognition (e.g. the HHS Innovates Awards Program) to promote broader adoption? Ask agency employees what would have an impact on their ability and willingness to use these approaches.

  • Performance: How can the program performance be tied to the use of specific tools? Work with budget and performance offices to enable the incorporation of these tools into performance management and budget processes.

  • Professional development: How to most effectively expand opportunities for training, professional development and experiential learning to support these approaches? Include innovation approaches in the knowledge, skills and experiences needed for Federal employees to advance to mid and senior level roles.

  • Government-wide approaches: What are opportunities for government-wide approaches, such as SES onboarding?

  • External collaborations: What are potential external collaborators such as universities, foundations, non-profits, professional societies, private sector experts and training providers?

Appendix: Examples of tools and candidate agency leaders for building the Toolkit

Below are some specific examples of the tools and agencies that could play a leadership role in developing and sharing resources.

People/culture

  • Appoint a "Chief Innovation Officer" or "Chief Technology Officer" and provide recognition and support (time, funding, training, top cover) for career employees with innovative ideas (HHS CTO, Idea Lab)

  • Create mechanisms to quickly recruit and hire world-class technical talent (GSA/18F, Presidential Innovation Fellow program)

  • Promote "operational innovation" by designating innovation roles in functions such as HR, legal, and acquisition such as Chief Innovation Counsel (USAID)

Open/digital government

  • Make open data the default, and encourage entrepreneurs and developers to create compelling applications that take advantage of it (USCTO, Data.gov)

  • Enable smart IT delivery using agile-assisted acquisition, Digital Services Playbook, and contracting to reward success/penalize failure for smart IT delivery (USDS, GSA/18F)

Paying for outcomes/new approaches to acquisition

  • Use incentive prizes (OSTP, Prizes Community of Practice)

  • Pay for Success (Labor, Treasury)

  • Use approaches to contracting (e.g. Other Transactions) that allow the Federal government to engage with entrepreneurial firms that can deliver more bang for the buck (Help needed - can build on OSTP/OFPP Case Studies)

  • Partner with venture-backed startups (In-Q-Tel)

Science and Technology

  • Identify and pursue Grand Challenges (Energy – Sunshot and EV Everywhere, USAID)

Evidence-based approaches to innovation

  • Use tiered evidence approaches to grant-making to develop, validate, and scale high-impact interventions (Education)

  • Recruit senior evaluation officer, develop agency-wide "learning agenda," and establish evaluation set-aside (Labor)

  • Use and test behavioral insights to improve policy and practice (Social and Behavioral Sciences Team)

External collaborations

  • Create an organization to design and launch formal public-private partnerships (Foundation for the NIH)

  • Encourage the use of crowdsourcing and citizen science (OSTP, Crowdsourcing Community of Practice)

Innovation Methodologies

  • Use human-centered design to solve problems and significantly improve the delivery of government services (OPM Innovation Lab)

  • Use the "Lean LaunchPad" to improve the commercialization of Federally-funded research (NSF)

Incentive Prizes and Challenges

Harnessing American Ingenuity through Prizes and Challenges

Overview

Incentive prizes and challenges promote innovation by offering a reward upon the achievement of a particular technical, scientific, social, economic or creative performance objective. Over the past six years, the Obama Administration has taken important steps to make incentive prizes a standard tool in every Federal agency's toolbox.

Prizes and challenges provide a number of advantages relative to traditional grants and contracts including: paying only for success; establishing an ambitious goal without having to predict which team or approach is most likely to succeed; reaching beyond the "usual suspects" to increase the number of minds tackling a problem; bringing out-of-discipline perspectives to bear; and increasing cost-effectiveness to maximize the return on taxpayer dollars. Many well-known incentive prizes have focused on catalyzing technology R&D, though prize administrators are increasingly using incentive prizes to drive behavior change, market adoption of existing solutions and interventions, and progress in areas of social policy such as health, energy use, and education.

What It Means

The American COMPETES Reauthorization Act of 2010 gives all agencies incentive prize authority. In addition to this direct prize authority, OMB M 10-11 describes a number of authorities under other statutes that agencies potentially could rely upon to structure prizes and challenges. Incentive prizes offer resource-constrained program managers a cost-effective tool to spur innovative solutions to clearly-defined challenges. In addition to only paying the winner, well-structured prizes can drive cumulative competitor investment totaling 10-40 times the prize purse. Program managers can use prizes to: attract new ideas; build prototypes and launch pilots; stimulate markets; raise awareness; mobilize action; and inspire transformation1. For some agencies, taking full advantage of prizes and challenges has meant identifying and hiring an executive officer to coordinate and encourage strategic prize and challenge activities agency-wide, developing agency-level policy and guidance to enable and guide the conduct of prizes and challenges, and convening relevant stakeholder communities and the public to collaboratively identify problems and desired performance targets to address through specific prizes.

Examples of Agency Impact

  • Since 2012, more than 360 public-sector prize competitions have been listed on gov, a one-stop shop where tens of thousands of entrepreneurs and citizen solvers have participated and been awarded over $72 million in prizes.
  • NASA's Green Flight Challenge called upon aviation innovators to build and demonstrate a super-fuel efficient full-scale aircraft. A total cash prize purse of $1.65 million attracted 14 teams, which collectively invested more than $6 million. In a historic achievement that some have referred to as a "Lindbergh moment," the two winning teams exceeded the performance requirements by nearly a factor of two, flying more than 200 miles on the energy equivalent of just half a gallon of gas, all while averaging 100 mph with two people on board.
  • EPA and HHS's My Air, My Health Challengewas a call to innovators to develop a personal and portable integrated system to monitor, report, and assess air pollutants and potentially-related physiological and health metrics. The $100,000 prize went to a team that built the Conscious Clothing prototype that could cost as little as $20 when built to scale. Its low price, comfort, and near-invisibility make it attractive not only to researchers and communities, but to individuals looking to take charge of their own health.
  • CMS's $500,000 Medicaid Provider Screening Challenge was a series of software development challenges designed to improve capabilities for streamlining operations and screening Medicaid providers to reduce fraud and abuse. The challenge managers estimate that the cost of designing and building the portal through crowdsourcing was one-sixth of what the effort would have cost using traditional software development methods.

Key Resources to Access

Agencies interested in learning more about incentive prizes can contact Jenn Gustetic, Assistant Director for Open Innovation in the Office of the Science and Technology Policy at [email protected].

In addition, see these resources:

Innovative Contracting Approaches

Buying What Works

Overview

The Federal Government has long used its buying power as one of the world's largest customers to accelerate well-known innovations, from the first microchips to the Global Positioning System (GPS). Today, Federal agencies continue to leverage innovative procurement practices that spur the private sector to develop advanced technologies to better serve the American people – and to pay only for successful results, not just best efforts.

What It Means

Current authorities in the Federal Acquisition Regulation (FAR) provide a variety of pathways that allow agencies to reshape existing processes to reduce transaction costs while still operating within the confines of existing law and regulation. Other new authorities provide additional alternatives such as the America COMPETES Act and incentive prizes. In recent years, a number of agencies have conducted pilots to see how these authorities can help them acquire to meet their technology needs more efficiently and effectively.

Examples of Agency Impact

  • NASA has used milestone-based payments to promote private sector competition for the next generation of astronaut transportation services and moon exploration robots.
  • The Department of Veterans Affairs issued an invitation for short concept papers that lowered barriers for non-traditional government contractors, which led to the discovery of powerful new technologies in mobile health and trauma care.
  • The Department of Defense has used head-to-head competitions in realistic environments to identify new robot and vehicle designs that will protect soldiers on the battlefield.

Key Resources to Access

Agencies interested in learning more about innovative contracting can contact Doug Rand at [email protected].

In addition, agencies can access a variety of resources to help develop alternative contracting approaches, including:

Open Federal Data

Spurring Innovation, Economic Growth, and Government Efficiency

Overview

President Obama has articulated a vision of Federal data as a national asset to be made publicly available wherever possible in order to advance government efficiency, improve accountability, and fuel private sector innovation, scientific discovery, and economic growth. Putting government data online and making it easy to find and use—while continuing to rigorously protect privacy—can help American families find the right health care provider, identify the college that provides the best value for their money, keep their families safe by knowing which products have been recalled, and much more.

What It Means

In pursuing the benefits of open data, and in response to the President's Executive Order making open and machine-readable data the new default for government information, as well as OMB's Open Data Policy (M-13-13), agencies have committed to inventorying their data assets using demand signals from the public, adopting open and useable data format as the default for data releases, and providing both quality and quantity of federal data for use by innovators and industries. For some agencies, this has meant building internal data management capabilities in the form of Chief Data Officers and teams of data analysts, hosting data jams using government data to create new tools and products to help deliver government information and services more effectively to users, and shifting to machine readable open data releases rather than relying on curated interfaces.

Examples of Agency Impact

  • National Weather Service launched an entire industry withthe field of commercial weather growing to include 350 companies whose combined annual revenues in the last two years has increased by 50% to an estimated $3 billion a year.
  • In May 2013, HHS's Centers for Medicare & Medicaid Services (CMS) released data making it possible for the first time to compare the charges for services that may be provided during the 100 most common Medicare inpatient stays, empowering the American people to seek better health outcomes while bringing delivery down the cost curve through data on payments.
  • Under its openFDA project, HHS and the Food and Drug Administration released more than 3 million reports on adverse drug events and medication errors recorded between 2004 and 2013. These kinds of reports were previously only available through lengthy Freedom of Information Act requests, but have now been harmonized and formatted to let researchers, mobile applications and Web developers easily analyze the data and present it in a way that can help improve the administration of drugs to patients.
  • gov has grown from a service with 47 data sets in 2008 to over 90,000 data sets inventoried for public access and use.

Key Resources to Access

The Chief Technology Officer's office has develop a series of tools for agencies to leverage in developing data asset strategies, including:

  • S. Digital Services Playbook: A playbook of 13 key "plays" drawn from successful best practices from the private sector and government that, if followed together, will help government build effective digital services (see Play 13: Default to Open).
  • Project Open Data: Free, open source tools and best practices designed to help agencies improve open data management, release data, and host events.
  • OMB Open Data Implementation Guide: Official OMB guidance with additional clarification and detailed requirements to assist agencies in carrying out the objectives of the Open Data Executive Order.
  • gov: The master catalog of U.S. Government data.
  • Open Data Bi-weekly Meeting: Hosted by the Office of the CTO every other Tuesday from 11 a.m. to 12 p.m.
  • Open Data Listserv: Hosted by GSA, this listserv is designed to connect people who are tackling data innovation, no matter their home agency. Anyone with a .gov or .mil email address can join by emailing [email protected].

Presidential Innovation Fellows

The Brightest Minds to Solve Our Biggest Challenges

Overview

The Presidential Innovation Fellows (PIF) program pairs talented, diverse technologists and innovators with top civil servants and change-makers to collaborate during focused "tours of duty" on technology projects that make the Federal Government work better for the American people. Since the initiative launched two years ago, Presidential Innovation Fellows, along with their government teammates, have been delivering impressive results, in months not years. Fellows have unleashed the power of open government data to spur the creation of new products and jobs, improved the ability of the Federal government to respond effectively to natural disasters, designed pilot projects that make it easier for startup companies to do business with the Federal Government, and much more.

What It Means

The Fellowship is a 12-month program during which Fellows are embedded within a Federal agency to collaborate on challenges with innovators inside government. Fellows, whose salaries are funded by their agency partners, operate with wide latitude for individual initiative in planning and executing solutions to problem, and spend a significant portion of their time co-working and collaborating with other Fellows. Throughout the program, Fellows receive structured support from partners in the White House and change-agents across various Federal agencies. Agency leaders interested in obtaining a Fellow must first propose a project, with a problem statement and goal. Proposals for the upcoming 4th round of PIF projects are due on November 19th, and can be completed here: http://goo.gl/forms/1hKnT7S7mO.

Examples of Agency Impact

  • With the support of PIFs, FDA launched openFDA, a new initiative that will provide easy access to FDA datasets. The project will make several valuable FDA public datasets—including millions of adverse event and medication error reports on FDA-regulated drugs—available to the public for the first time, via application programming interfaces (APIs) and raw structured files.
  • RFP-EZ is an online platform developed by the U.S. Small Business Administration and PIFs in only six months, making it easier for innovative small tech businesses to bid on government contracts, while also making it easier for Federal agencies to identify the bids that offer the best value for taxpayers.
  • PIFs have helped HHS to expand the reach of the Blue Button Initiative to over 150 million consumers across the country, providing secure, electronic access to their personal health records in order to make more informed decisions about their health care.
  • At the VA, PIFs have helped develop an online GI Bill Comparison Tool that makes it easier for Veterans, service members, and dependents to calculate their Post-9/11 GI Bill benefits and learn about VA's approved colleges, universities, and available education and training programs across the country

Key Resources to Access

Agencies interested in engaging the Presidential Innovation Fellows should email Garren Givens, Director of the PIF Program, at [email protected].

Additional resources about the PIF program can be found at the Presidential Innovation Fellows website, and proposals for PIF projects can be submitted to the following address by November 19th: http://goo.gl/forms/1hKnT7S7mO.

Tiered-Evidence Grant Programs

Creating "Moneyball for Government" to Fund What Works

Overview

A key challenge agencies face is how to structure their investments to simultaneously support new promising ideas, while also investing in the scale-up of approaches that have credible results and have infrastructure to reach a broader audience. Under a "tiered-evidence approach," an agency structures a grant competition in three rounds (promising, validation, and scale-up), with each successive round incorporating greater funding and higher evidence requirements. This approach: presents a clear message to the field about the importance of building an evidence base; supports new ideas while advancing the evidence-base of all of the programs; and benefits the overall field of funders, whether government or philanthropic, by allowing them to see where different strategies rank, and fund on their theory of impact.

What It Means

A three-tiered model is suitable to a wide range of Federal programs that could benefit from a systematic investment approach that encourages innovation while creating a pathway for further investment in projects found effective in strong evaluations. Even when there are few or no interventions that meet the evidence standards for validation or scale-up grants (the higher evidence tiers), a program can adopt the three-tiered framework to signal the expectation that some interventions supporting a proof of concept, over time, will become eligible for validation and scale-up grants. A three-tier model incorporates the following parameters:

  • Highest tier: For program areas where the evidence base is mature, projects deemed suitable for scaling are funded because they have been proven effective through multiple random assignments or strong quasi-experimental studies that will be replicated with fidelity.
  • Middle tier: For program areas with only a moderate evidence base, funding is provided for replication grants designed to validate effectiveness.
  • Lowest tier: Where there is only preliminary evidence or a strong theory of action, funding is offered for development r proof of concept projects with an appropriate evaluation design to determine whether the project would merit further development or replication.

Examples of Agency Impact

Key Resources to Access

Agencies interested in learning more about tiered-evidence funding approaches can contact David Wilkinson at [email protected]

In addition, agencies can access a variety of resources to help develop tiered-evidence grant funding mechanisms, including:

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http://dupress.com/articles/the-craft-of-incentive-prize-design

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