As I have written previously, nations face complex problems that require cost effective and efficient solutions that are often constrained by both time and fiscal pressures which are becoming more commonplace across the globe. The objective of this article is to share — in an open and transparent way — how to effect technology transfer and commercialization best practices to rapidly increase the deployment of a wide range of technologies, products and/or services to aid in the purification, security and even creation of water. Water generation, purification and security has become a major issue for many nations across the globe. Water is discussed in many circles as an “asset” which is essential for a country’s survival and growth. Through the use of a real-world Commercial Applications Requirements Document (CARD), one can apply this field-proven method of employing this innovative PPP (Public Private Partnership).
Most governmental bodies (e.g., national, regional and local) entities do not recognize, let alone leverage, their true market attractiveness to the private sector. Experience has shown that the private sector is ready, willing and able to assist the government if they are provided two things — neither of which are money. The first deals with the ability to articulate in a clear and concise way what a given problem is (through the use of detailed operational requirements) and the second is a conservative estimate of the potential available market. Recently developed models and programs, such as the System Efficacy through Commercialization, Utilization, Relevance and Evaluation (SECURE) program at the US Department of Homeland Security (DHS) can substantially increase their awareness of a worldwide spectrum of solution providers in a broad range of industries. It will be obvious upon completion of this chapter that the SECURE program is an ideal process for leveraging the potential available market represented by users of products and services germane to communities across the United States.
The real challenge for federal, state and local government officials is to work as a group to prioritize and articulate the unsatisfied needs/wants of their particular region(s). A recent effort to identify potential solutions that will assist communities recover from natural or manmade disasters will be shared in detail to demonstrate how innovative public-private partnerships work. Government officials and first responders realize that providing potable water to affected communities is one of the most important functions to restore after a disaster. These same officials also recognize significant shortcomings with traditional water delivery methods, such as trucking in bottled water or operating large, diesel-powered water purification systems. DHS, through utilization of its SECURE program, has aided several state and local government officials by developing detailed operational requirements, concepts-of-operations and a conservative estimate of the potential available market (PAM) for products/services needed collectively by communities at the local, tribal, state and federal levels. This program ensures that public officials work closely with the private sector through partnership models like the SECURE program to obtain the highest performance/price products and/or services — at a speed-of-execution not typically seen in the public sector.
Let’s now examine how to leverage the free market system to develop solutions to well-articulated problems. It all starts with public-private partnerships.
Private-Public Partnerships Are the Future
A public-private partnership is an agreement between a public agency and a private sector entity that combines skills and resources to develop a technology, product and/or service that improves the quality of life for the general public. The private sector has been called upon numerous times to use its resources, skills and expertise to perform specific tasks in support of the public sector. Historically, the public sector has frequently taken an active role in spurring technological advances by directly funding the private sector to fulfill a specialized need that the public sector cannot complete itself.
The public sector has found it necessary to take this active role to lead and enable the development of a needed technology or capability in situations where the business case for the private sector’s investment in a certain area is not apparent. In these cases, the public sector relied on the private sector to develop mission-critical capabilities, but had to pay the private sector to divert its valuable (and limited) resources to an area that did not necessarily show a strong potential to provide an acceptable return-on-investment (ROI) for a given company. These situations could be caused by a number of issues ranging from a high cost to perform the research and development (R&D) to a limited PAM that may have prevented the company from making sufficient profit and returns to the company and its shareholders.
Increasingly, however, users in the public sector are now viewed as stable markets – i.e., a sizable enough customer base for the private sector to warrant investments of time and money. A commercialization-based public-private partnership has the same goal as more traditional public-private partnerships, but the method is constructed to leverage positive attributes of the free market system. The introduction of a commercialization-based public-private partnership, developed and implemented at DHS, provides benefits for three constituents of the Homeland Security Enterprise (HSE): the private sector, the public sector and the taxpayer. This is a desirable scenario creating a “win-win-win” environment in which all participants are in a position to benefit.
In the free market system, private sector companies and businesses must commercialize and sell products and services that consumers want to purchase. Commercialization is defined as the process of developing markets and producing and delivering products and/or services to address the needs of those targeted markets. The development and understanding of specific markets is a critical undertaking for many companies seeking to gain share of a market, with companies directing significant amounts of money and resources to these activities in addition to its product development efforts. Sometimes companies do not understand the correct needs or demand data of a market or market segment and their product(s) does not sell well. The company’s investment in designing, manufacturing and advertising the product can be, and is in many cases, a waste of time and money if the company “misses the mark.”
What a commercialization-based public-private partnership offers to the private sector is detailed information and opportunity. The public sector is not only the “consumer” in this free market scenario, but an informed and communicative consumer who is capable of giving the private sector a detailed description of what they need, as well as insight into which agencies and user communities would be interested in potentially purchasing a product/service that fulfills these requirements. While it remains prudent business to verify the information provided by the public sector, there is considerable value for the private sector to obtain these details from DHS because four things are provided to the private sector that would not happen in normal market dynamics: 1) a decrease in resources spent researching the market; 2) an increase in available time and money that can now be focused on product design and manufacturing; 3) a reduction in risk of the research data being incorrect; and 4) a conservative estimate as to how large the potential market can be for a known and funded entity.
The development and communication of detailed requirements or needs is the real cornerstone to the success of these public-private partnerships. The public sector’s ability to articulate the needs of its stakeholders will catalyze and support the future actions of the partnership. Requirements definition creates a method in which appropriate decisions about product/ system functionality and performance can be made prior to significant investments in time and money to develop it. Effective communication with, and access to, the stakeholders of a given agency will bring greater clarity and understanding to the challenges that they face. Understanding requirements early in the search for solutions removes a great deal of guesswork in the planning stages and helps to ensure that the end-users and product developers are “on the same page.” The Requirements Hierarchy (see Figure 1) shows how the definition of requirements must remain traceable to an overall mission by ensuring a focus toward a common, well-articulated goal.
In this partnership model, the proactive articulation and sharing of requirements or needs provides the necessary starting point to begin effective communication with potential private sector partners. Openly publishing the needs or requirements of public sector stakeholders has a number of ancillary benefits. A common challenge for solution developers has been a general lack of insight into the exact needs of public sector stakeholders. Instead, the private sector attempts to develop solutions to problems that may not exist and try to sell products based on the merit of its capabilities and features rather than its ability to solve the specific problem of the users. This is a situation commonly referred to as solution push where “a solution defines a problem” that it can solve, rather than the problem guiding the development of a solution to close a capability gap.
Requirements provide criteria against which potential solutions can be tested and evaluated. They offer detailed metrics that can be used to objectively measure and verify a possible solution’s effectiveness. Detailed operational requirements guide product development so that solutions’ specifications actively and demonstrably solve the stated problem(s). The effective articulation of requirements creates the mindset in which fulfilling requirements becomes the focus of product development. DHS has developed a number of reference guides and resources to assist with the development and articulation of detailed requirements. Visit http://www.dhs.gov/files/programs/gc_1234200779149.shtm for more information.
Department of Homeland Security Leverages Public-Private Partnerships
Given the current economic situation facing the United States, it becomes increasingly important for the public sector to make wise investments of its time, money and resources. Most government agencies do not have the budgets necessary to complete every research and development project that they would like to undertake. The effective prioritization of programs is critical to managing the limited resources available to various agencies. Rigorously developed requirements for each project facilitate these prioritization efforts and increase the ability to perform critical Analyses of Alternatives (AoAs) used in determining the best course of action to solve a problem. In support of this analysis, “technology foraging “will uncover a great deal of information on potential solutions that may already exist and is a necessary consideration before pursuing a commercialization-based public-private partnership. When successful, the option to utilize commercialization-based public-private partnerships to solve a problem frees resources for those projects that cannot be addressed without significant government involvement and expenditure of resources.
The SECURE program was developed as a way to address requests for assistance from DHS stakeholders to find better solutions to their problems. These stakeholders were used to a culture where vendors present “solutions looking for problems” and wanted to find a better way to not only have solutions developed to address their needs, but also to have some assurance that the products being sold to them have been thoroughly tested and evaluated in real operational environments.
The SECURE Program is an efficient and cost-effective program to foster cooperative “win-win” partnerships between DHS and the private sector. The Department works with the private sector to develop products, systems or services aligned to the needs of its operating components, first responders and critical infrastructure/key resources (CIKR) owners and operators, representing in many cases, large potential available markets. DHS posts detailed operational requirements, to include key performance parameters and the concepts of operations (CONOPS), in the form of a Commercial Applications Requirements Document (CARD) on its public web site to articulate specific requirements in conjunction with a conservative estimate of the PAM of a given product, system or service. This requirements-led method places the users’ need at the center of all future actions so that solutions are developed and delivered rapidly and efficiently.
Private sector entities possessing technologies or products that are at Technology Readiness Level (TRL) 5 or above that are aligned to these posted requirements can use this valuable information to generate a business case and develop (at their cost) a fully deployable product or service after their study and verification of a given solution’s market potential. The Department assures that a TRL-9 or fully deployable product or service has demonstrated operational performance that meets a given private sector entity’s published specifications through the public sector’s review of recognized third-party independent testing data to eventually certify a product or service. This enables the private sector, through the free market system, to develop products and services that capture significant revenue opportunities and demonstrates to potential purchasers that the product does what it claims to do.
The success of the SECURE program is the result of effective communication and fostering cooperative relationships that focus on measurable results. DHS’s Commercialization Office learned a great deal from the early execution of its pilots and from listening with an open mind to the suggestions and recommendations received from partners, colleagues and leadership throughout the HSE. Based on this valuable feedback, the Commercialization Office created a detailed flow process (see Figure 2) and documented the roles and responsibilities for those involved with the program. This is shared in an open and free way and provides a roadmap to potential product or service certification. The processes were developed with the mindset of “keeping it simple and making it easy” for all participants to understand their roles and responsibilities.
When DHS publishes approved CARDs and PAMs, the private sector is able to take advantage of this valuable information to develop potential solutions by entering into a partnership with DHS. These partnerships are formalized utilizing cooperative research and development agreements (CRADAs) that describe in detail the relationship, roles/ responsibilities and deliverables for each party. CRADAs allow for an open exchange of information from all parties to facilitate effective advancement of technology development and evaluation. Through the CRADA, the private sector partner will be able to submit third party, recognized, independent operational test & evaluation (OT&E) for review by DHS and its subject matter experts.
As previously discussed, requirements articulation facilitates leveraging cooperative public-private partnerships because of the critical performance metrics gleaned from the stated requirements. The SECURE program utilizes this vital evaluation criteria to incorporate a rigorous review process based on OT&E of potential solutions to ensure that the operational performance of a system is not only directly aligned to stated stakeholder requirements, but also that the system meets or exceeds the stated performance of the private sector vendor or supplier. This review process verifies and validates capability requirements in addition to an evaluation of the systems’ safety record, quality assurance criteria, performance limitations and other considerations to ensure that when a system is deployed in the field it is both effective and safe. SECURE Certification is granted to those products and/or services that have completed this review and are shown to meet or exceed the operational performance claimed by the private sector partner and are aligned to the needs/requirements contained in a posted CARD document.
This testing and validation of potential solutions is especially valuable for non-federal stakeholders who do not have the resources nor expertise necessary to conduct thorough solution evaluation activities. DHS provides all of its stakeholders with the tools and information needed to make informed purchasing decisions on quality solutions that fill their exact requirements giving the much needed assurance to the first responder and CIKR communities that a certified product or service works as specified and is aligned to a requirements document.
Products developed through this partnership (even those not eventually purchased by DHS) can be offered to other private sector entities, found for example in the airport security arena, school and university security segments, and security space for professional sports and concerts, many of whom support the defense of critical infrastructure and key resources nation-wide. There is then an increase in public safety and security, all while the private sector, public sector and taxpayer benefit from the partnership.
In an open and freely competitive way multiple vendors are able to offer potential solutions to provide the required capabilities outlined in a given CARD. In exchange for this valuable information, the private sector offers deployable products and services (along with recognized third party test and evaluation data) that meet these stated requirements in an open and free way that creates an ergonomic “clearinghouse of solutions” available to stakeholders.
Understanding the DHS Market
We have seen through the SECURE program that the federal government can engage and influence – in a positive way – the private sector by offering detailed requirements and conservative estimates of market potential. The reason that these partnerships are successful is simple and straightforward. Firms spend significant resources in trying to understand market needs and market potential through their business and market development efforts. By offering this open and transparent information, government saves the private sector both time and money while demonstrating its genuine desire to work cooperatively to develop technologies and products to meet DHS stakeholders’ needs in a cost-effective and efficient way that benefits the private and public sectors – but also, most importantly, to the American taxpayers’ benefit.
An analysis of potential DHS stakeholders provides greater detail into the many relevant market sub-segments and/or applications of potential users. See Figure 3. This market map provides a segmentation of DHS’s primary stakeholders to demonstrate these market potentials. It also shows how an agency like DHS is related to other government and non-government ancillary markets.
With more knowledge about the needs and requirements of their potential customers, the private sector is in a better position to consider how their current offerings align to needed capabilities. The private sector must consider how many potential users are in a given market to determine if investment of additional resources to develop the solution will provide the necessary returns. In many cases, the market for a commercialization-based public-private partnership is substantial, potentially composed of millions of funded users. In addition, many government agencies across the federal, state, and local government levels may share similar requirements for products and services (if the ability to modify and add or take away options is available). Furthermore, the products developed for the government can often be sold in civilian markets such as critical infrastructure and key resources owners and operators. Even if the government does not purchase a specific company’s product, in many cases it can still be useful and have value for non-governmental applications. Just as business experts discuss “technology platform” strategies and models, one can envision a detailed requirements document delineating core requirements with additional agency-driven “options” — analogous to the variety of options offered on automobiles. Just as consumer products are developed with a variety of options (at varying price points), a detailed requirements document could outline all the options required by agencies through a “requirements platform.”
The SECURE program covers the needs of all of the DHS stakeholders including the operating components (FEMA, TSA, CBP, Secret Service, ICE, USCIS and Coast Guard), but most especially first responders (local police and fire department, hospitals, rescue teams) and critical infrastructure/key resources (CIKR) owners and operators, representing a large market for potential private sector partners. It is the role of DHS to ensure that these stakeholders are provided with the mission-critical capabilities that they need in order to perform their jobs well. In terms of state and local governments, DHS has organizational elements within its agency to assist in both the development and widespread dissemination of requirements. In the case of the mobile water treatment challenge, DHS identified potential users in many different organizations across government and throughout the private sector. The amalgamation of government users and CIKR owners and operators responsible for providing clean drinking water to communities affected by natural disasters is quite large in this case. This creates the necessary potential available market that is attractive to private industry.
It is important to stress the relationship that DHS has with its non-federal stakeholders in the first responder and CIKR communities. DHS has direct authority over its operating components and can directly influence acquisition activities. This same relationship does not extend to its non-federal stakeholders who are responsible for managing their own budgets and purchasing decisions. Because the SECURE program is not a procurement activity, DHS is able to share valuable information about its non-federal stakeholders to the private sector and gain knowledge about potential solutions without the need for contracts or monetary exchanges. First responders and non-federal stakeholders now have a unified voice to convey their needs or requirements and gain from the collective size as potential available markets.
A commercialization-based public-private partnership benefits the public sector because the private sector competes in an open and transparent way to garner the public sector’s purchase potential and business. By sharing information about the requirements or needs of an identified market openly, multiple companies may make products/services that meet requirements, while competitive market forces impact price points to achieve the lowest cost to the potential buyer. The end user benefits by being able to purchase the best product at the lowest price.
The taxpayer wins in a commercialization-based public-private partnership because their tax money is not spent on research and development that could be accomplished by the private sector. With government-provided needs and requirements, the private sector realizes significant reductions in R&D risks, another important consideration in generating a business case for investment. In a commercialization-based public-private partnership, the research and development of the product is not paid by government. It is the private-sector that invests its own money on research and development, and then sells the product to the government at the lowest price. This results in saving the taxpayer money as well and, in fact, expands the net realizable budgets of the public sector. Table 1 outlines these various benefits:
Innovative ideas flow freely in the private sector, most especially from small businesses. There is a demand for these innovative technologies as other private sector companies begin to position themselves to address these newly emerging commercial markets. Mergers and acquisitions continue to take place in the private sector as larger companies and investors seek to build their enterprises. Discovering the potential benefits of partnering with the public sector has demonstrated its attractiveness to investor communities like venture capitalists and angel investors. This investment has created more opportunities for those innovative ideas to grow and develop into fully deployable products. Sharing information like needs and requirements provides a defined target that allows those private sector partnerships to take hold. These strategic partnerships are becoming more common and it is now a regular event for these strategic partners to approach the public sector together to engage and demonstrate new technology offerings.
Establishing the Partnership
In the United States today, many public-private partnerships are facilitated through various technology transfer and cooperative research agreements. The most popular agreements are based on official cooperative research and development agreements, or CRADAs. These agreements are executed between federal government agencies and private sector participants, where both parties work on a mutually beneficial project. Each group applies the resource that they agreed to use, such as personnel, equipment, services, and/or facilities. Though the private sector participant may fund portions of the effort, the government agency cannot use federal funds (i.e., cash) to support the private sector directly. The partners are able to share information and leverage each others’ technical expertise, ideas and information in a protected environment.
The benefits of having a CRADA are: 1) the private sector participants are able to take advantage of the government agency’s analytical capabilities; 2) the government agency and the private sector participants can negotiate on intellectual property disposition, such as rights to patents, the protection of information, and exclusive or non-exclusive licensing of inventions or other intellectual properties developed that are made through the agreement; 3) the government agency and the private sector participants have the opportunity to develop work and business relationships.
Agency and private participants define a project that would benefit both sectors. If the needed resources are available to perform the discussed project, the representative (usually a program manager) of the public sector makes the final decision about whether they will pursue a CRADA opportunity. Funds are not transferred from the government agency to the private sector participant, so most regulations limiting federal procurement do not apply. As a result, the CRADA can be put into practice quickly and with little difficulty.
Transformational Change Beyond DHS
Because of its obvious benefits, it is reasonable to examine the possibility of extending the concepts developed at DHS to other federal, state, local and tribal agencies. Logic dictates that in cases where operational requirements can be developed across agencies, the size of a given potential available market would increase. It is also certainly conceivable that various agencies across government share similar requirements for products and services. Further expanding requirements generation and collecting information on market potential across all of government can have transformative effects on the way government conducts business. The incorporation of Commercialization adds a “valuable tool to an agency’s toolbox” in providing increased speed-of-execution in deploying technologies/products/services to solve problems, as well as providing an increase in the net realizable budget of an agency. In fact, the expansion of public-private partnerships like SECURE across all of government are being recommended to both the President of the United States and Congress due to their many benefits.
Real-World Case Study
Kazakhstan is one of the world’s great economic growth and modernization stories. In just a few short years, the country has achieved independence, sustained consistent economic expansion, and created a growing middle class, while building and sharing its national identity with the world. Although the fundamentals of Kazakhstan’s economic growth may be attributed to the priceless treasure is its mineral resources, it is also the valiant vision of President Nursultan Nazarbayev’s Strategy 2050 Plan in taking the country into the elite group of the world’s nations. In January 2014, during his address to the Republic of Kazakhstan, he underlined the necessity to ensure that Agriculture takes path of innovation.
Food security, next to climate change, has also emerged as one of the most pressing global challenges of the 21st century. The world population should reach 9 billion people by 2050, which should require doubling the production of agricultural products. Kazakhstan is rising to the challenge by being one of the world’s leading exporters of grain and flour. Promotion of food security is one of ten global challenges that the country proactively seeks to address. The extent of this commitment is not limited to merely raising food production capacity and ensuring national self-sufficiency, but to expanding agricultural exports, meeting regional and global demand, and playing a leading role multilaterally on these questions.
The Republic of Kazakhstan is the 9th largest country in the world and the 2nd largest country amongst the CIS (”Commonwealth of Independent States”) nations. With a territory equivalent to the size of Western Europe and agricultural land making up around 80% of the country, Kazakhstan has all the prerequisites to fill this because their capacities in promoting regional and global food security are substantial. In addition, legislation has been enacted for the implementation of Kazakhstan’s way 2020, designed to bolster businesses in the agricultural sector. As President Nazarbayev stated “Kazakhstan agricultural lands should be used to introduce new technologies, continuously improve productivity, and perform on the basis of the best international standards. He continued: “The future lies in creating a network of new processing enterprises in the agricultural sector, mainly in the form of small and medium-sizes businesses.” (Astana, 17 January, 2014).
Kazakhstan’s Agriculture development requires introduction of new technologies, implementation of state policy on stimulating industrial development of the Agro-industrial complex, political stability and favorable climate for investors and the power of science.
Addressing the common need for food, feed, fiber and fuel requires a global action plan to increase agricultural output in an environmentally-sustainable, economically-feasible, and socially-responsible manner. Kazakhstan’s relationship with the United States of America – especially in the political, economic and security spheres – can, and should, play a crucial role in ensuring Kazakhstan’s continuing progress to develop and execute a results-oriented, multi-year development program that advances the challenge of “feeding the world”. It is a simple fact: the emerging agricultural development of Kazakhstan can become the success story of the 21st Century – one of the emerging strategic leaders in enhancing the world’s sustainable agriculture.
Communities of Practitioners and Dual-Use Technologies
The prevalence of international associations for various stakeholder communities drives the creation of a significant amount of information relative to the challenges, needs and requirements of their representative membership. Government can play a vital role in communication with these associations to gather this critical information. Providing opportunities to engage larger audiences and creating a nation-wide understanding of the problems has increased the awareness and identification of similar requirements in a number of user communities. The more cross-cutting a set of requirements becomes, the more opportunities exist to save taxpayers’ resources. How could this be accomplished in a practical way? The answer is simple: It has already begun… DHS is planning to utilize deployable technology to create a Community of Practitioners (CoP) in order to gather and communicate requirements across such a large-scale community of users.
The Department of Defense, for example, has invested in these kinds of technologies. Technology will enable users to reach not only the millions of first responders but also other potentially authorized stakeholders and members of the HSE (other federal agencies, private sector, venture community, etc.). Advanced technologies like the semantic web 3.0 will aid in the communal and open development of detailed operational requirements, potential available market sizing/applications, etc. There are plans to initiate a pilot program to harness these technologies to engage various user communities to enable broad-based development of widely accepted operational requirements. As cooperative partnerships increase between the public and private sector, sharing information becomes the most important tool to improve the effectiveness of the relationship.
CoPs can be developed at a number of levels to gather information from all government stakeholders at the federal, state, local and tribal levels. In addition, CoPs will enhance connections between personnel in a number of mission-spaces who may find similarities in capability gaps or share information on best-practices and possible standards that can facilitate coordinated responses to incidents involving users from a number of jurisdictions.
Uncovering common requirements across stakeholder communities highlights the connections between ancillary markets and the possibility for a given technology to work in varied applications. Dual-use technologies provide useful capabilities to a larger market of potential users. It follows that addressing additional markets increases the potential benefits to solution providers who can distribute their company’s capabilities to a wider audience, increasing sales volumes and driving prices down for consumers as economies of scale are improved.
Commercialization and partnerships are tools that have genuine value well beyond DHS. In fact, these efforts can offer more and more opportunities to increase the speed-of-execution of government programs and increase the net realizable budget of the government — all at the benefit of taxpayers the more the models are used both across and within government.
Governmental bodies have the opportunity to be proactive in addressing its many needs through creating an environment conducive to partnerships with the private sector. Governments have many resources at their disposal to begin learning about how commercialization-based public-private partnerships can be formed. The mobile potable water treatment challenge described below is just one example of the federal government “thinking outside the box” to address its challenges. These partnership models can be used for any number of challenges including information technology, physical security, communications, etc. The public sector will continue to identify areas in which partnerships can provide the best situation to solve a problem efficiently, effectively — all with a speed-of-execution necessary to provide critical protections to the American people and their way of life.