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Alan Kotok , , ,

Federal Agencies Encouraged to Offer Grand Challenges and Prize Contests

An Office of Management and Budget (OMB) memo last week gave federal agencies the green light to use more grand challenges and prizes to spur innovation. The memo, signed by Jeffrey D. Zients, OMB’s Deputy Director for Management, points out that agencies with funds for grants can use that funding and authority to sponsor grand challenges and prizes.

Zients encouraged agencies to use such competitions, a form of “crowdsourcing” that gathers broad public input in the search for innovative solutions to problems. Agencies were urged to collaborate with outside organizations for the design and management of these prize competitions. OMB promised that within four months the Administration would have a Web-based platform for agencies to post their prize and challenge competitions and invite communities of problem solvers to take part.

The memo outlined the legal and financial mechanisms enabling agencies to offer prize competitions and challenges, including grant-making authority. Zients notes that a grant “is defined in the Federal Grant and Cooperative Agreement Act (and in OMB Circulars) as financial assistance by the Federal Government that provides support or stimulation to accomplish a public purpose;” a cooperative agreement is defined similarly, but calls for the agency’s substantial involvement.

Where agencies have the authority to give grants, the memo says, they can offer a cash prize for a competition under the same authority as long as the prize is consistent with legislation authorizing those funds. Competitive grant programs like the ones commonly used to fund research are especially suitable, the document says, since their legislative authorizations often do not specify how the funds should be distributed.

Zients cited several examples of prizes or challenges as evidence of the value of the approach, notably DARPA’s grand challenge to develop robotic cars and NASA’s Centennial Challenges to develop technologies, from lunar landers to astronauts’ gloves. Zients also pointed to Department of Energy’s L Prize, used to develop more efficient alternatives to incandescent bulbs.

Hat tip: Peter Modigliani