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Estimate Budget and Resources

Estimate Budget and Resources

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PREPARE

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.

Other Phases

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Estimate Budget and Resources

Estimate the budget and future resource needs of your challenge early in the design process to better plan and secure buy-in for the concept within your agency. You'll need resources in a variety of areas: financial, technical assistance, administrative support, implementation (facilities for hosting), communications support and more.

Regardless of complexity or scale, any challenge requires at least one person to dedicate time throughout the entire process. Human capital needs and time commitment are two of the most important resources to consider early in the design process. It may be difficult to reach a decision on funding levels, human resources and timelines without a finalized design. Still, you need to estimate likely resources within your agency and among partners at this stage.

What is this going to cost? How many FTEs are needed? These will be among the first questions asked when you make the case to your agency leadership.

Key Takeaways

1. Estimate the prize purse and other incentives.

It's not easy to determine the right amount for a monetary prize. Sometimes your legal authority sets parameters on the amount you can offer. Your prize should be enough to attract a sufficient number of solvers from your target audience, but too large a prize may increase the cost of your challenge without getting the results you want.

Consider what it will cost people to participate in your challenge. Will they need to buy specialized equipment or have access to a lab? Can you offer the use of federal facilities equally to all participants? If it will cost a lot to participate, consider offering a larger financial incentive. You also can offer small milestone payments along the way to teams making the greatest progress if the cost of participation is a barrier to entry.

It helps to know how much your agency has paid through traditional approaches (e.g., grants and contracts) to support problem-solving in this topic area. What is the value of the solution to your agency? All of this is useful to consider when determining your prizes.

2. Look beyond the prize award amount.

Due to various challenge types, incentive structures and programmatic complexity, there's no general formula or rule to estimate your budget in the earliest stages of prize design. You have to define the problem, identify contributions from potential collaborators and determine desired outcomes before you can accurately estimate an appropriate award amount and the resources to execute your challenge. Still, you have to start with a rough order of magnitude to get leadership approval to proceed. Look at the resources expended for similar challenges in the case studies on this toolkit. Consult past progress reports to Congress.

Challenge administration costs may easily match or exceed the prize purse being offered to the winners. For example, it may require significant resources to implement multi-stage competitions that involve testing and usability evaluations due to the involvement of management and experts. Beyond the prize purse, consider expenses associated with labor, general administration, communications and outreach, travel expenses, evaluation (e.g., data collection testing facility costs) and judging. If you plan to conduct the challenge with a third-party contractor, there will be fees associated with that. Determine where to budget for federal employee time or contract support when making your estimate.

3. Challenges don't implement themselves—it takes budget and resources to run one.

There's a perception that challenges are simple and inexpensive to run. Challenges take many forms. Some are easier and cost less, but others require extensive effort and investment. It's similar to a grant program where the initial setup incurs administrative costs beyond the funds being awarded to grantees.

The more complex your challenge is, the more you'll likely have to budget for administrative costs, which can end up being as much as the prize purse itself.

4. Consider potential contributions from collaborators and partners.

Collaborators and partners can help share costs and tasks across a challenge. A collaborator may provide technical capabilities for evaluation and testing or may manage the judging process.

Consider the time it takes to find and enter into agreements with collaborators or partners. It can take months to finalize partnership agreements. Be aware of the trade-off between time and overall cost to the government if you're considering a strategy that relies on sharing costs with partners.

5. Plan ahead and conduct a preliminary assessment.

In addition to budget and resource considerations for your challenge, you may also want to consider what's needed to transition a solution to a possible follow-on procurement. Undertake a preliminary assessment on what funding and resources would be necessary for a procurement action. Who are the key stakeholders and what impact might resource constraints have on the transition to procurement? You may be able to involve these stakeholders in the challenge to ease that transition.

Still have questions?

Contact the Team

Case Studies