Playing One-Dimensional CHESS
Let's play a game! See if you can spot the lie.
Earlier this summer, the Army realized it needed an electronic-signature solution so that it could "modernize [its] accessions and recruiting business processes." While developing its requirements, the Army determined that it needed an electronic-signature solution that is "compatible with the common access card (CAC) enabled signatures and is authorized for use at DoD Impact Level 4." Because DocuSign was the only electronic-signature solution that the Army knew met those requirements, the Army put out two Requests for Information that suggested that Army might do a brand-name justification for DocuSign. After no company offered a better solution, the Army negotiated a sole-source contract with DocuSign to deliver its solution.
Did you find it? Feel free to re-read the paragraph. I'll wait.
Ok, the lie was the last sentence. OBVIOUSLY, that's not how GovCon works! If you believed that the government engages in direct negotiation with commercial solution providers instead of through IT Value Added Resellers (ITVARs), I'm sorry to burst your bubble.[1]
In truth, the Army didn't negotiate a sole-source contract with DocuSign. Instead, the Army got a response from Carahsoft, an ITVAR, that indicated that it could provide the DocuSign products under its Army Computer Hardware Enterprise Software and Solutions (CHESS) contract. And Carahsoft sent the Army a quote, and the Army made an award to Carahsoft for $43,342. Neat, tidy, and exactly as boring as acquisition rules want it to be.[2]
But, of course, there's more to the story. Because, at some point later, a different company—Inkit Inc.—protested the award to Carahsoft.
Inkit is a small business with a Phase I and a Phase II Small Business Innovation Research award. And, according to Inkit's website, it has a "File Intelligence Platform" that has "AI-powered digital signatures" and "combines IL5 security, CAC-enabled signatures, and automated records management, so mission-critical plans are approved without delay or doubt."
Let’s assume it’s awesome. Let's assume maybe it's even better than DocuSign! It certainly seems like it met the minimum requirements in the Army's RFIs. Shouldn't that have been enough to get the Army's attention?
No. According to GAO, the Army was under no obligation to consider Inkit's ability to commercialize its research with a SBIR Phase III award. Instead, GAO explained, CHESS is a "mandatory vehicle" for Army IT hardware and software under the Army Federal Acquisition Regulation Supplement. If the Army can buy something on the vehicle, the Army must buy using that vehicle. And because Inkit is not available on Army CHESS, the contracting officer couldn't buy it.
No CHESS? Then, checkmate![3]
But, policy wise, is this the Right Outcome? In a way, Inkit Inc. perfectly encapsulates some of the inherent tensions in public procurement policy.
In the red corner, you have SBIR as the champion of small business and innovation. We love small businesses! We love innovation![4] We love commercialization! Give Inkit a chance and stop giving all the money to the incumbents!
In the blue corner, you have CHESS as the champion of category management and strategic sourcing. We love cost savings and efficiency! We love leveraging the buying power of the federal government. We love the predictability that comes with repeat business. Don't waste your time with these companies that don't understand how government works, and stick to proven players![5]
So, how do these tensions resolve? One model is that it's all a game of chess, where eventually one side will win by outsmarting the opposing view. But I'm more skeptical; my model is that it's more like seesaw, where sometimes you're up and sometimes you're down, but you always need both sides to play.
In this case, Inkit lost the round. It was playing a game of chess with only one winning strategy: be on the right contract vehicle.
But, the SBIR program is about to get reauthorized on a bipartisan basis, so, y'know. Hang in there? The next round might be different![6]
[1] You might also have guess the first sentence was a lie? Surely, the Army already had a contract for electronic signatures in place in 2025? Perhaps, but that ALSO is not how govcon works. Hold the thought, though.
[2] Oh man, this was only a year ago?
[3] I know, it's a stretch. I would ask ChatGPT to help me, but that feels kinda like cheating. Embrace the cringe dad joke.
[4] Research probably receives a bit less enthusiasm these days, I suppose.
[5] Remember how Army needed to buy DocuSign when it probably already had a contract for DocuSign? Isn't category management supposed to solve this problem? Isn't that the whole point of having a vehicle like CHESS that you don't need to do multiple rounds of market research to figure out whether you can buy things on existing vehicles? I mean, sure. But that's not how govcon works.
[6] And if you don't like chess, how about a nice game of Global Thermonuclear War?
PS—If you've read this far (hi, mom!), I am thinking about writing and teaching about topics involving AI, technology, data, law, society, and policy beyond government contracting. If you're interested in learning more, or have suggestions, mind dropping me a note? More to come...