Air Force to Try ‘Freemium’ Acquisition Model for Digital Tools

The Air Force is experimenting with a new “freemium” acquisition model to circumvent its sluggish planning cycle and acquire digital tools more rapidly.

The initiative, called “Digital Tools for All,” relies on vendors lending the Air Force enterprise-wide software licenses to test cost-free. If Air Force officials like what they see, they may require major contractors to use them when doing work for the government.

The program is a way for the government to stay on top of fast-emerging technology. “They’re asking me to plan for the software I need five years from now,” Vince “Swath” Pecoraro, Lead Program Manager for the Air Force’s Digital Transformation Office, said in an interview.

“The software I need isn’t written yet. I have no clue how many licenses I’ll need. I have no clue how much training I’ll need, who needs to be trained five years from now. But what I do know is we need to be using relevant software today,” he added.

Historically, software and other Pentagon purchases are bound by the Program Objective Memoranda (POM) cycle established in 1969 that requires acquisition officials to create a spending plan five years out.

Software requires a much quicker and iterative process, Pecoraro said, and China’s agile acquisition cycle is a “driving force,” behind this new way of acquiring software.

“The digital tools are going be one of the things that enable us to be faster and make better decisions. We can run a million different iterations of a design very quickly and come up with the optimal one with the right visual tools and then go build it,” he said.

Attractive Opportunity

Pecoraro expects digital tool vendors will be eager to participate and offer their products for free. If just one company participates, others will be incentivized to join to avoid getting iced out of the market.

“It’s a very attractive arrangement for a small company like us,” Tim Kesecker, vice president of digital engineering at Securboration, said.

His company offers a software tool that allows contractors to create and export a work breakdown structure instead of using non-interactive PDF file.

A small company like Securboration would struggle under the traditional acquisition model to break into the federal defense market, Kesecker said. Under the Digital Tools for All initiative, the company would be able to capitalize on an opportunity to be placed on the Air Force’s Contract Data Requirement List, which specifies the format of contractors’ deliverables.

“All of a sudden, that’s my market space, because now they have to buy a license for my tool,” Kesecker said.

It’s a model that Pecoraro has tested as part of the team that secured aircraft from the private sector for free to conduct three-month demos without having to actually purchase the planes.

Following a workshop with vendors to exchange ideas on the “freemium” model Sept. 16, Pecoraro intends to release an “invitation to participate” in place of a traditional request for proposals, likely starting with program management digital tools. He has a grievance officer and legal advisor on board and plans to roll out the new procurement model as soon as October.

“It’s critical for the future for us to buy things better and smarter,” Swath said. “And software, it’s different. It’s not the same as an airplane. We shouldn’t be applying the same rules to it. We shouldn’t have to live within the POM cycle, an antiquated, Cold War-era tool. We should find a better way.”

To contact the reporter on this story: Josh Axelrod in Washington at jaxelrod@bloombergindustry.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Amanda H. Allen at aallen@bloombergindustry.com