Overview
Modular contracting is a strategy that divides large information technology acquisitions into smaller, manageable increments to reduce program risk, incentivize performance, and ensure the government can rapidly adopt evolving technology. It is mandatory for major IT systems to the maximum extent practicable and optional for non-major systems.
Key Rules
- Independence of Increments: Each acquisition increment must be a "workable solution" that can perform its principal functions without being dependent on the delivery of subsequent increments.
- Architecture Alignment: All increments must conform to the agency’s master IT architecture and should utilize common or commercially acceptable standards to ensure compatibility.
- Government Flexibility: Contracts must be structured—using methods such as options, IDIQs, or task orders—to ensure the Government is never legally required to procure additional increments.
- Performance Integration: While increments are managed individually, their performance requirements must be consistent with the overall system and address specific interface requirements with future modules.
- Strict Timelines: To avoid technological obsolescence, agencies should aim to award contracts within 180 days of solicitation and schedule deliveries within 18 months of the solicitation date.
Practical Implications
- Risk Mitigation: By avoiding "big bang" implementations and custom-designed monoliths, agencies can isolate failures to specific increments rather than jeopardizing an entire multi-year program.
- Agility and Vendor Management: This framework prevents vendor lock-in and allows the government to pivot to newer technologies or different contractors between increments if requirements change or performance is unsatisfactory.