Hey government! Agile software tenders please..

This is a follow-up on my Dutch article on Agile government software development tenders. I believe that the current tender strategy on software builds is causing a waste of (tax) money by our (Dutch) government.

Apparently governments think that bigger tenders lead to lower costs. They probably think that higher volume allows for lower margins. This is an economic rule and this means that it should be true for all industries, right? Not for software development. Big tenders lead to BDUF (Big Design Up Front), which means: less control, steering, validation and thus higher risk of failure.

If you calculate the risk of failure as part of the costs, then the simple economic rule “higher volume allows for lower margins” is no longer true (for software development).

So for the above misconception software development projects are made as big as possible. The government will try to describe what should be build in this huge contract. In the software industries these descriptions are called “specs” (or specifications). There can be hundreds of specs. The contractor has no other option than to “build to spec”, which means that even if the specification is wrong. he has to build it wrong, because the spec is part of the contract and this is agreed.

Specs fail, Agile does not

Even if the spec was written correctly in 2011 and the specs were finished by 2012 and then the project finished in 2014, it may be that the specs are no longer valid. This is what we call in software development a “moving target”. So now there are 3 options:

  1. Ignore that we are building something that is not needed anymore.
  2. Adjust the specs, but this means we have to renegotiate price and delivery time.
  3. Move the work to “extra work” category in which it will be charged an hourly fee.

Every deviation or unclarity in the original spec can be used to earn extra money or make the deadline fluid. Writing a spec is very hard. So hard that it is, in my opinion, impossible to write an unambiguous and good spec in a reasonable amount of time.

So as a government you have to choose between two evils. Either you hold the contractor to build something that is not useful or you change the spec. In the first case the project fails and in the second case you have to pay extra and/or accept that the deadlines shifts.

To make matters worse the government rules clearly state that the cheapest offer should be chosen. I believe that contractors understand the rules of the game and that is why they are underbidding. This leads to an even more stubborn contractor as he needs to “earn back” the money he “lost” to win the tender.

Not lean at all! Reduce waste now

This is a very ugly game that is played with our tax money. And in my opinion the government should apply what we have learned years ago in the product software business: work Agile. In Agile we only commit on effort and not on spec. We let a group of experts work for 2 weeks on a project, look at the result, steer the direction and continue.

Governments should make a few domain experts available for the project. These people should be seen as the “customer on-site”. The domain experts and the contractor winning the bid should use a SCRUM way of working to guarantee short feedback cycles.

Then one last thing: Software building should no longer be seen as projects, but should be considered products. If people work on software for a limited time, they are less committed to its quality and reduced complexity. Also the software that the government offers should be constantly changing as does our world, the government regulations and all other software around us.

Further reading:

  1. http://www.computerworld.co.nz/article/492220/agile_approach_may_clash_govt_tender_policy/
  2. http://www.computerweekly.com/news/2240187680/Government-tenders-for-agile-digital-developers
  3. http://diginomica.com/2014/04/22/uk-government-spending-millions-agile-development-coaching-training/



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