In this phase you'll begin to think through the problem you're trying to solve, estimate the necessary resources and consider partnerships within and outside government. This will help identify goals and desired outcomes and determine if a challenge is the appropriate tool for achieving results.
Identify Legal Authority
Work closely with an agency attorney in this step.
It's not just the American Innovation and Competitiveness Act. Several other legal authorities (such as assistance, procurement or necessary expense doctrines) allow agencies to conduct challenges. You have to determine what legal authority to use for your challenge, and it's a critical decision.
Each authority presents unique requirements for your challenge structure. Consult with your agency's general counsel early in the design process to determine how the goals of your challenge align with authorities, appropriations and preferences for your agency. For example, some authorities, including that provided under the American Innovation and Competitiveness Act, allow for external funding in some circumstances but also limit eligibility to U.S. citizens.
In determining the legal authority, consider your desired participants, intellectual property for solutions and the likelihood of implementing the challenge through partnerships. Engage your attorneys early in the process to help weigh these choices.
There are many legal authorities available to run challenges. The American Innovation and Competitiveness Act is an update of the broad authority first provided by the America COMPETES Act, and it's the most common. Still, 46 of the 109 federal challenges during fiscal year 2016 made use of other authorities.
Focus on the objective or goal of the challenge with respect to agency mission, not using a particular authority. Don't set out to run a challenge; rather, set out to accomplish a goal as part of your agency mission.
A prize competition is a means, not an end. Don't run a challenge just for the novelty. It should be a deliberate decision that this is the best way to address your problem.
If you're tasked with running a challenge, make sure you apply it to an appropriate problem. Determine what activities will address the problem at hand and advance the mission, then consult with counsel to determine what authority the agency has to accomplish those activities.
Not all authorities are available to all agencies, with the exception of the American Innovation and Competitiveness Act. There may be other authorities available If a project ties directly to your agency's mission.
Continue to consider what the best mechanism is throughout the design process, not just at the beginning. You may realize later that another authority is better after all.
Questions about legal authorities often start with whether the proposed activity will involve making cash awards or transferring funds to a third party. It makes sense to focus on this aspect during the planning process and when describing the proposed challenge to your agency counsel. If you're not planning a fund transfer, then legal counsel can review with you the authorities available for your agency to use crowdsourcing or challenge activities on a collaborative or no-funds-exchanged basis.
If the activity will involve the transfer of funds, consider the purpose for which the funds will be used. If you intend to acquire something for the direct use by and benefit of the federal government—like a crowdsourced mobile app or algorithm—then you'll likely use the procurement process. If the purpose is to support competitions or crowdsourcing events being run by independent third parties, then a grant may be a useful vehicle. If you intend to run a challenge and award a cash prize to stimulate innovation in an area of agency interest, then a direct prize authority like the one found in the American Innovation and Competitiveness Act may be the way to go.
The mission of your agency, the goals you hope to achieve, your available resources and the activities you plan will drive your choice of legal authority.
Stop us if you've heard this one before: Coordinate early and often with your agency's legal counsel for guidance.
Consideration of legal authorities isn't a one-time discussion.
All legal authorities and agencies have different requirements that will guide challenge development. And it works the other way too—your design decisions can guide which legal authorities should be used.
Look at legal authorities early in the planning process to understand your options. As you develop your plans you may find that a particular authority is too limiting, and you may need to go back and look at your options again.
Different legal authorities may impose restrictions or provide options that aren't immediately apparent but will affect how your competition is run. Likewise, different agencies may interpret the same authority differently, so talk to your attorneys about these issues.
Ask these questions relating to legal authority:
- How will the challenge be funded and how will you pay out the prize?
- What do you want to do with the solutions? Will they become open source, public goods or products that will enter the commercial market? Will your agency use them? Many authorities specify what happens with the intellectual property (IP) generated by a challenge. If your agency wants to use the solution, traditional procurement methods may be best.
- Is it important to include international solvers? Some authorities limit eligibility to U.S. citizens and residents.
- Will you partner with outside groups? Do you want to administer the prize yourself or use a third party?
- Do you want to apply both government and nongovernment funds to your challenge? Some authorities allow agencies to receive outside funding for the purpose of conducting a challenge with certain restrictions.
- Do you want to have judges from outside your agency? Some authorities provide for an exemption from the Federal Advisory Committee Act (FACA) for judging panels consisting of non-government employees.
Some agencies have specific guidance about what legal authorities can be used, while others may allow a range of options. Talk to your agency's attorneys and challenge point of contact to learn what policies are already in place.
The all-encompassing American and Innovation Competitiveness Act authority isn't the only law that may apply to your challenge. For example, sometimes challenge managers specifically want to involve students in their solver pool. If minors are potential participants, make sure you fully understand any legal limitations or requirements under the Children's Online Privacy Protection Act (COPPA). Pay close attention to parent/guardian authorization.
Other frequently asked legal questions include:
- If an agency uses Challenge.gov for a challenge, must it submit an information collection request (ICR) to the Office of Management and Budget for approval under the Paperwork Reduction Act (PRA)?
- If an agency requests that a title for an idea, solution or entry be provided as part of a challenge, does the agency need to seek PRA approval?
- What happens if a participant wants to contest the decision? Who do they appeal to? It's critical that you follow the judging protocol you'll develop and execute later in the process. This is crucial to defend the agency if there's a disagreement among participants about the awards. The Federal Trade Commission recently won a case where a participant who didn't win appealed to both the Government Accountability Office and the U.S. Court of Federal Claims seeking damages.
- Does the National Environmental Policy Act (NEPA) apply to your challenge? Using the NEPA process, agencies evaluate the environmental and related social and economic effects of their proposed actions. Your agency may require a NEPA review of your challenge. For example, the Department of Energy has determined that prize competitions are major federal actions that require NEPA review. The NEPA strategy employed in each challenge is based upon the specifics of a particular competition. If you think NEPA may apply, include a NEPA specialist early in the planning and execution of your challenge.
Under some challenge authorities, it may not be possible to efficiently transition a solution to a follow-on procurement without consultation of the FAR, agency-specific acquisition regulations or 10 U.S.C 2371 as related to Other Transaction Authority (OTA). Consult with your agency counsel and procurement office to identify additional legal authority necessary for a follow-on procurement.