$1 Bid Wins Government Open Source Software Purchasing Experiment (gsa.gov)

An anonymous reader writes: A couple weeks ago we discussed a project from a software team within the U.S. General Services Administration. Its goal was to set up a portal to let developers bid on the creation of open source code needed by the government. From the beginning, they said it was an experiment, and now the results are in from their first project. The project was quickly bid all the way down to $1, and on Wednesday, the winner delivered a functional solution that met their criteria. They say, "When we received the $1 bid, we immediately tried to figure out whether it was intentional, whether it was from a properly registered company, and whether we could award $1. We contacted the bidder and we confirmed that the bid was valid, that the registration on SAM.gov was current, and that the bid would be the winning bid. It was a plot twist that no one here at 18F expected. This unexpected development will no doubt force us to rethink some of our assumptions about the reverse-auction model." Despite their surprise, the team feels this is proof that the system can succeed. They're now working to refine the process.

Comments

Work for free!!

[DogDude]

Yay! Nothing says "success" like working for free. Great job!

Re:Work for free!!

[queazocotal]

'Free' may not quite mean free.
It means you can now advertise this in your resume, for example.

Re:Work for free!!

[fragMasterFlash]

If it builds your reputation then you will likely have additional customers looking to hire you at much more reasonable rates.

Re:Work for free!!

[NoImNotNineVolt]

Yay! Nothing says "success" like working for free. Great job!

I'd say that Brendan Sudol, the winning bidder, may not have been compensated in dollars, but surely in notoriety. Now he's the first person to have won a contract with the GSA through this reverse auction system. Definitely a nice item in his portfolio.

Re:Work for free!!

[Anonymous Coward]

Yes, building a reputation of working for a $1.

Now, the free publicity may be worth it but it could just have as easily gone the other way. In fact, it will when this becomes old news and the next idiot tries it.

BTW, for all budding entrepreneurs, believe me when I say anyone trying to make you work at subsistence or free, on the basis that it will net you reputation or some such, is just trying to scam free labor off you that will never pay off.

Re:Work for free!!

[angel'o'sphere]

If you find such advertizing interesting, how much do you pay me to send you my resume?

Re:Work for free!!

[Anonymous Coward]

BTW, for all budding entrepreneurs, believe me when I say anyone trying to make you work at subsistence or free, on the basis that it will net you reputation or some such, is just trying to scam free labor off you that will never pay off.

There is a difference between someone trying to make you work for free and making a calculated risk to do it yourself. I'm now CTO of a multimillion dollar company. The first 5 years, every cofounder of the company had a day job and helped build the company for free on night and weekends as well as we gave our service away for 5 years as well. It paid off for us. Likewise, many artists, painters, caterers, wedding planners, photographers, barbers, massage therapists, and even lawyers built their portfolio first by doing work if not for free or pro bono then at least below what they would later like to charge.

Re:Work for free!!

[thewolfkin]

sure who wouldn't want more exposure. Such a unique platform like getting Govt Bids is sure to be rewarding down the line.

Re:Work for free!!

[Anonymous Coward]

The first 5 years, every cofounder of the company had a day job and helped build the company for free on night and weekends as well as we gave our service away for 5 years as well. It paid off for us.

Building a business by offering a free service tier is really very unlike a custom labour contract where the compensation is $1.

Likewise, many artists, painters, caterers, wedding planners, photographers, barbers, massage therapists,

A genuine massage therapist is not going to build a portfolio from offering "free massages", bro. They're going to get trained somewhere and they're going to either work in that place or somewhere similar. Ditto for barbers. Painters and photographers get fucked on a regular basis by endless offers of EXPOSURE - if you're doing a job somewhere prestigious enough that it'll wow whoever is reading your work history, they can afford to pay. If they say "for exposure!", it's because they know some idiot is going to add a huge amount of value to their product in return for zero - and if you offer, you're reducing pay across the market, and end up fucking yourself.

Now if you're starting out and offering to do a bit of work for a local charity or whatever, or you're getting some sort of active training, you might charge close to zero. If you're displaying your work in some sort of marketplace or cooperative, you might even be contributing to costs. Competitions? Great. But if a commercial enterprise wants to pay someone ZERO for simply doing some work, consider the quality of applicant you're competing against and the worth of experience (the example here is a gimmick because someone did something for the first time that caught attention).

and even lawyers built their portfolio first by doing work if not for free or pro bono

In England&Wales, the typical first step if you're not top tier is to spend endless years working as a paralegal, hoping and praying to secure that training contract, before realising that - like a model on the "casting couch" - your employer might not quite have been telling the truth about making you a star. There is something very wrong if, having fully qualified, you are thinking about building a pro bono portfolio - you really ought to be working at the firm that trained you, or somewhere similar. You might get shit pay, but you'll get pay.

then at least below what they would later like to charge.

Yes, juniors have less experience and command lower rates than experienced people who can do a better job... of that there's little doubt.

Re: Work for free!!

[Anonymous Coward]

Yes. Looking at the code on github it is well written python. For a skilled dev this was a quick enough feature to add (~1-2 days?) that it probably was worth doing to establish contacts. Well played by all! This was a mixture of good policy, tools, code and sense. This micro purchasing experiment is likely to work provided code quality is measured and can be upheld.

Re:Work for free!!

[Kjella]

'Free' may not quite mean free.
It means you can now advertise this in your resume, for example.

Sure but is it a race to the bottom? I mean the whole point is to offer something for cheap now to cash in later, lots of things are about that like oh every sale in existence. But it doesn't work if people are jumping in all the time thinking they'll be the next big thing, the next time you're making a "real" bid the next guy offers $1 and so it goes on and on. I mean $1 isn't ten minutes at minimum wage, it's way below any kind of living wage even eating Ramen noodles and living in your parent's basement. I have a friend who does music on a semi-professional basis, and yeah you can almost always get a free-ish band doing it for the exposure. And they've had to man up and say if that's what you want that's fine but it won't be our band. They've practiced many, many hours both alone and together and want to see some kind of pay-off but they're constantly in competition with bands that think this is their lottery ticket to stardom and will sell themselves very cheap. Like he commented on a local festival, he'd like to play for the local community but it'd have to be almost for free and the other bands don't get play time anywhere else and it would tarnish their reputation. The price tag is mostly about perception, a big name is worth a big price and then you can't act small.

Re:Work for free!!

[pepty]

If the offer is exposure - put exposure in the contract. The link to your company goes on their landing page for X months with a guaranteed minimum number of genuine clicks, you get introductions to Y of their clients that meet your criteria, etc. Or just a straight up guarantee of so much new business through the exposure or the contract reverts to cash + 5%.

If they aren't paying in cash, make certain their payment to you is more valuable to you than the cash price.

Re:Work for free!!

[Baldrson]

Yeah and there are millions of programmers nowadays. So what you're saying is that there are going to be exactly how many of these kinds of newsworthy "tests" of new procurement policies?

Re:Work for free!!

[SydShamino]

If, in your chosen profession, you can't compete against those who do the same thing for no profit, or the same thing as a hobby, or even the same thing as "exposure", you're in the wrong profession.

Re:Work for free!!

[Anonymous Coward]

You don't understand how this works. You sell the software for $1 as the lowest bidder to the government and sell the security holes to the highest bidder. "Open Source" makes this a bit tricky: you need to be good enough that discovering the security hole is hard.

An excellent example is elliptic curve cryptography in NSA style: you construct the security hole by calculating instead of randomly choosing the constants the method depends on. Nobody can prove that you cheated and the source code does not contain any evidence either.

Re:Work for free!!

[hairyfeet]

Uhhhh...isn't that the same argument the multinationals make when they claim Americans should be happy to be paid the same as somebody in Bangalore or Beijing? That you should be happy to "compete" with the absolute lowest bottom of the barrel wage slave they can possibly find on the planet?

Re:Work for free!!

[slashdot_commentator]

What a joy that would be for pharma CEOs like Valeant. Instead of buying out companies, and raising their drug price by 500x, they can farm out software bids to programmers for $1, instead of the hundreds of thousands of dollars per job to software bureaus. And still overprice their drug by 5000%.

Re:Work for free!!

[mrvan]

Uhhhh...isn't that the same argument the multinationals make when they claim Americans should be happy to be paid the same as somebody in Bangalore or Beijing? That you should be happy to "compete" with the absolute lowest bottom of the barrel wage slave they can possibly find on the planet?

As long as we (or at least the vast majority of Americans and Europeans) do our shopping by going to the absolute bottom of the retailer barrel (walmart / aldi+lidl) and/or online shopping barrel, I don't think "we" are in a position to complain.

(and the worst is people who go to a brick&mortar shop to browse and inspect products and get advice, and then buy the thing they selected online because it is 20$ cheaper - since they didn't have to pay the store, the stock, and the somewhat knowledgeable salesperson...)

Re: Work for free!!

[KGIII]

The problem is that you'll be competing with people who have no job and can do the work for little or no money because any income is better than no income. Alternatively, they'll already be employed. Any income is additional income. I do not see anybody making any decent money from this. For better or worse, that's what it looks like is going to happen. This sort of pricing is not a one-off, I suspect. You'll find they're all low-ball bids from people for whom any additional money is a good thing.

Re:Work for free!!

[StikyPad]

Not just a personal resume, but a corporate resume. Past experience is a huge barrier to entry in gov't contracting, and so this was (will be?) an easy way to get that. It probably would have gone negative if the possibility was in place.

Anyway, it's all fun and games until the protests are filed and the lawyers get involved.

Re: Work for free!!

[MrL0G1C]

The reason you're wrong is because most coders are working and wouldn't code for free and most unemployed people don't code and the ones that do are highly unlikely to do more than one or two small projects to prove themselves before wanting pay.

Re: Work for free!!

[KGIII]

Well, this bid indicates that I may not be wrong. We'll have to see. It seems a bit premature to call me wrong but we'll see.

Re: Work for free!!

[Half-pint HAL]

This is exactly what free market means. This isn't a problem.

What I've never understood about those who declare that anything that arises from a free market is good is this: why isn't unionisation considered a market force? Why is it OK for large businesses to consolidate to wield ever greater power, but workers are told that acting collectively is "interfering in the market"?

Re:Work for free!!

[Xyrus]

It's like rent-a-coder. You think you could make a side profit doing small projects for people, but then you see how ridiculously low the bids get and realize that it isn't even worth your time. It's more worthwhile to just contribute to an open source project.

Re: Work for free!!

[rjstanford]

The difficulty is that errors in computer software are notorious for being hard to test for, hard to document, hard to validate, and hard to assess the impact of. In many ways its like trying to assess the delivery of a bridge without having had inspectors check the rebar or a structural engineer seal the design.

Re:Work for free!!

[rjstanford]

Even better, have a cash price in there and then have terms in which on an ongoing basis exposure may be used to offset the fees. That way if the company you're working with decides not to provide the exposure they promised (for any reason), the contract simply falls back to its default state rather than changing from a default of exposure to a new cash basis. That may have been the intent - you said "revert", but the structure can make a huge difference when it comes time to collect.

Re:Work for free!!

[AK Marc]

$1 isn't free, and if the request was for code that already exists, why wouldn't someone bid $1 to present the (already existing open source) code?

Though it was apparently done by a proper company, so now they have a "win" on their record, which makes it eaiser to win in the future (though not in the reverse auction system), and may help with things like funding.

Re:Work for free!!

[AK Marc]

Sure but is it a race to the bottom?

Ah, an actual case of begging the question. You are assuming that a race to the bottom is a bad thing. Why is efficiency despised so much? Oh, the government is so inefficient. Oh no, even worse, the government did something efficient!

Re:Work for free!!

[AK Marc]

Apple is more profitable than Xiomi. The race to the bottom doesn't exist in the middle class and above. The race to the bottom only exists in the people who have the choice of the lowest quality cheapest item, or doing without. That we are growing the poor is the race to the bottom, not the ability to buy cheap things.

Re:Work for free!!

[AK Marc]

Yet, so many people volunteer for slavery, I mean "unpaid internship".

Re: Work for free!!

[bondsbw]

The real answer tends to be "it depends". Unions can be good, and they can be bad. Huge corporations can also be good or bad.

The attraction of the free market is that any transaction, large or small, ends up making things better for both parties. Add up all those transactions, they become an economy and the idealized open market makes the economy better.

But the big picture can't ignore that many transactions are not inside a closed system. If I pay you to dispose of millions of tons of radioactive waste into a river, that screws everyone else. If the president of a union negotiates a deal with the CEO that pockets the union president $10 million while providing each employee a free year of Jelly-of-the-Month Club, instead of real raises and bonuses and better working conditions, again people get screwed over.

So yes, union forces are market forces, but that doesn't mean they are always good.

Re: Work for free!!

[thewolfkin]

worth doing to establish contacts

I think the point of contention is whether such a $1 coder would actually establish contacts and whether those contacts would be worthwhile in any immediacy. Worthwhile meaning things like leading to more high paying jobs in the future because if they're being called back for bottom of the barrel prices again then this was a waste of her time.

Re:Work for free!!

[tehcyder]

notoriety

Notoriety means being famous for something bad. I don't think that's what you meant.

Re: Work for free!!

[Diss Champ]

In this case at least, the $1 coder has made his name known to everyone who RTFA. Those of us curious enough looked at his code.

It would not surprise me if the coder got some work from this.

The next $1 coder might not be as successful. Alternately, enough folks might look at code from successful bidders and hire the good ones that it is a worthwhile approach going forward.

I am interested to see how this turns out after more iterations.

Re:Work for free!!

[Wycliffe]

A genuine massage therapist is not going to build a portfolio from offering "free massages", bro.

I've been to many festivals where massage therapists and even chiropractors give a free 5 minute massage. I've also seen deals like buy the first massage, get the 2nd massage free. My cousin is now the most expensive photographer in her town but in order to create a portfolio, she did her first settings free and her first weddings at greatly reduced prices. She was selective, she didn't just give everyone that walked in the door a free wedding session but if it was a big wedding she was willing to do it at a discount to "advance" her portfolio. I have a sister who is a wedding planner and a good friend who is a real estate agent and they are the same way. It helps to have "bigger" clients on your portfolio. You will even find commercial software venders who do the same thing. It's advantageous for them to land a well known company at a reduced price so they can "our software is used by company X". I don't personally know any lawyers but I've heard they are the same way as well where getting a "big" case can help improve your reputation and allow you to take bigger and bigger cases. It makes perfect sense that someone would like the opportunity to write software for the federal government. This is completely different that doing a $1 job for a no name company on some rentacoder type site.

Re: Work for free!!

[Talderas]

In general that's going to be due to unions serving as a de facto to de jure monopoly on labor and monopolistic market forces are things that should be avoided in a free market.

Re: Work for free!!

[Half-pint HAL]

Considering a question of closed vs open systems is oversimplifying matters. It is very rare for all parties in any negotiation to have equal power. A big example in the UK at the moment (and for the past 10 years) is supermarkets vs farmers in negotiating the price of milk. Because there are only about 6 major supermarket chains buying from hundreds of dairy farms, the supermarkets have a lot more choice than the farmers, and therefore have all the power in negotiations. Dairy farmers now struggle to make enough money to feed their cows and their families -- it's not just the cows that are being milked.

Without equal power, it is very easy for this sort of situation to arise, and only some kind of union arrangement can redress the balance. "Closed shop" unionism isn't the answer, because that is just another form of monopoly. However, abolishing unions on the grounds of the existence of closed shops is like abolishing banks on the grounds of the existence of Lehman Brothers.

Re: Work for free!!

[Half-pint HAL]

If the problem is union monopolism, then legislate against that -- but don't throw the baby out with the bathwater.

Because it said government.

[queazocotal]

I initially read it as $1B

Re:Because it said government.

[Anonymous Coward]

After projected cost overruns, it'll be above $1B.

Multipurpose fighter jet project is next up

[frnic]

Next up is a reverse bid on a Multi-Purpose Fighter Jet, they are expect the winning bid to be between $5 and $10...

Re:Multipurpose fighter jet project is next up

[frnic]

Thats the truth, did you see the $80B award to develop the next long range bomber - I figure that is just a down payment, considering how much we have wasted on the F-35 so far.

Re:Multipurpose fighter jet project is next up

[JustAnotherOldGuy]

I figure that is just a down payment, considering how much we have wasted on the F-35 so far.

Yep. It can't fight, can't turn, can't climb, can't fly in rain or hot or cold weather, the pilot can't turn his head to dogfight and you can't even start the fucking engine if it's too warm out.

$148 million each for the F-35A.
$251 million each for the F-35B.
$337 million each for the F-35C.

Versus $30 million each for an F-15C, also known as "the greatest air combat weapons platform ever built".

What a fucking boondoggle.

Re:Multipurpose fighter jet project is next up

[slashdot_commentator]

$337 million each for the F-35C

How the f**k did they raised the price on the F-35C??? Its just supposed to be a retractible tailhook, slightly larger wings, and some frame reinforcements. Were they able to make the 2nd engine mandatory?

Re:Multipurpose fighter jet project is next up

[blindseer]

An excellent video describing the failings of the F-35 program:
https://www.youtube.com/watch?...

The host, Bill Whittle, does get into some political commentary with a conservative slant but also gives an excellent history of fighter jet development in the USAF in less than 8 minutes.

The F-15 Eagle first flew in 1972, was updated in the 1980's to the F-15E Strike Eagle. Even though the two have a common history the F-15E is a very different, and much more capable, aircraft. Boeing is now working on the F-15 Silent Eagle, a version of the aircraft with capabilities in stealth and lethality that the F-35 wish it had.
https://en.wikipedia.org/wiki/...

I believe that the US Air Force and Navy would be better served with the F-15SE than the platinum plated lead sled that is the F-35. The US Marine Corps, however, needs a multi-role fighter that can take off from and land on the deck of an amphibious assault ship. If the Department of Defense had only focused on providing a capable VSTOL airframe, and updating existing airframes with improved engines and electronics, then we wouldn't have the F-35 in it's current form. We'd also have a much more capable military at a lower cost.

What the powers that be tried to do is replace four very different aircraft, F-15, F-16, A-10, and AV-8, with one. This common airframe was supposed to come with a cost savings. Instead what we have is a very expensive compromise that is a jack of all trades and master of none.

As many will tell to anyone that will listen the goal of the F-35 is not to provide a superior airframe, it is to spend federal government money in as many Congressional districts as possible.

Make money on support

[Anonymous Coward]

Charging money for an open source product wouldn't make any sense anyway, since its open license would make it available to everyone and then some leech would undoubtedly use your unmodified code to undercut your bid without adding any value.

Instead, an open source product should always be offered for the smallest amount that constitutes a legal sale, and then income generated by supporting it for perpetuity. Leeches don't do support, they have no backbone.

Re:Make money on support

[pepty]

The support contract would either be bid out separately or part of the original contract. So: Congratulations! You owe the federal government perpetual support for $1.

Re:Make money on support

[pepty]

One: support contracts are rarely, if ever, perpetual.

Read the comment I responded to:

Instead, an open source product should always be offered for the smallest amount that constitutes a legal sale, and then income generated by supporting it for perpetuity.

Two: does the phrase "bid out separately" ring a bell, and if so, do you understand what it means?

Yes and yes, but congratulations on going ad hominem.

Works until all have ruined themselves

[gweihir]

And then, when all competent contenders are out of the picture, prices raise and quality drops. This is _not_ a problem where a capitalist competitive approach is a good idea, as this is not about standardized products that a lot of people can produce.

Re:Works until all have ruined themselves

[FriendlyStatistician]

A simple piece of code to load data from a well-defined file format, with a provided suite of tests to verify that your code does what it's supposed to?

That's a pretty standardized product that a lot of people can produce.

Re:Works until all have ruined themselves

[gweihir]

Seriously? Well, with lack of insight like that it is no surprise so much code sucks.

Re:Works until all have ruined themselves

[Anonymous Coward]

It reminds me of trying to bid for jobs on sites like Elance. I'll read a brand new RFP and spend 5 minutes putting together a ballpark estimate. By the time I reply to the posting, it already has 20+ bids from "Doing the Needful Associates" and "Hyderabad Professional Services" bidding down to $5 on something I would have quoted $200 for (and been cheating myself even at that rate). It's futile to even attempt bidding.

It will be Armageddon!

[pr0t0]

You know we're sitting on four million pounds of fuel, one nuclear weapon and a thing that has 270,000 moving parts built by the lowest bidder.
Makes you feel good, doesn't it?

Re:It will be Armageddon!

[StikyPad]

Funny quote, but meeting technical specifications and passing NDT are part of the procurement process. Fail those, and you're on the hook for making new parts or refunding the government (assuming they paid already), as well as fines for missing deadlines, and possible loss of future contracts.

Re:It will be Armageddon!

[hawk]

that's going to be one heck of a refund . . ..

"Hey, anyone have change for a quarter?"

hawk

Maintenance

[ITRambo]

I wonder if this low bid method of getting a government contract will lead to Oracle like maintenance costs in upcoming years. If their software is locked in what's to stop this from happening?

Re:Maintenance

[silas_moeckel]

Lets think, bid out the replacement?

College students need real projects...

[Bruce66423]

This is a match that does make sense; if you are a college student, you need evidence that you can produce worthwhile material. By producing open source software, you get a reputation that will make you seriously employable. Given you are going to work free anyway, you might as well produce something that is meaningful, as opposed to a piece of software which noone but your professor ever gets to see.

Re:College students need real projects...

[jader3rd]

True, but many meaningful software project need to live longer than the time you'll be in college for.

Re:College students need real projects...

[fulldecent]

Documentation

And the Code..?

[Irate Engineer]

The code requirements:

Code must display the text "Hello World!" on the screen, followed by a line saying "Press to continue". The code will then read a text file containing the names Charlie, Art, and Barbara and sort them into alphabetical order.

I think I see how this works...

[Timex]

One dollar for the program. Okay. That's bragging rights.

How much is the support contract?

Re:I think I see how this works...

[Anonymous Coward]

Anyone can bid for the support contract, but only one company will be qualified, lol.. (guess who they choose)

Re:I think I see how this works...

[ebvwfbw]

$1B of course. They copied the razor model. Razor is dirt cheap. Blades are expensive.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Put it on the App Store!

[davester666]

It would have to be loaded with at least 4 different analytics web sites, be covered in ads, and also be a freemium app.

Re:real life imitates TV

[jeffb (2.718)]

Depends. Were they explicitly mentioned in the requirements?

$1 Open Source

[freeze128]

Many of us know the term FOSS (Free Open Source Software). Even at $1, the government is still overpaying for open-source software.

Re:$1 Open Source

[tlhIngan]

Many of us know the term FOSS (Free Open Source Software). Even at $1, the government is still overpaying for open-source software.

Maybe, but that's if the government was buying an existing software package. This is new development - in other words, a developer bid $1 to do the required development the government wants. Not sure if it's new code for a new program, or customizations to an existing program, but $1 is a steal for that.

Imagine being able to demand a project add a bunch of code to do what you want by "donating" them just $1.

Is it the 1990s again?

[Hognoxious]

You mean sell it at a loss? I suppose they could make it up in volume...

Re: Is it the 1990s again?

[Anonymous Coward]

"At a loss" is what the corporations expect from workers, why shouldn't they operate the same way?

Re:Is it the 1990s again?

[AK Marc]

My grandfather founded True Value Hardware (well, was one of the founding members, anyway). The last time I was in, I walked through the toy section (I walked through every section, but that's beside the point), and I noted that the toys on the shelf were pretty high priced. So I asked the manager (uncle, as gramps is not around anymore) what his buy price is for that toy. I pulled out my phone, and checked. It would be cheaper for True Value stores to buy retail from Wal-Mart than wholesale from the True Value distributor. And unlike some of the clothes and other items, the toys are actually identical between the two. The gap was large enough that the corporate buyers for True Value were likely paying retail or higher.

It's actually really hard for retailers. They eventually closed the store.

expensive decisions

[lucm]

They could have done it for 20% less by using PHP instead of Python. The government pays extra once again for technical decisions made in the private sector, just like it happened with healthcare.gov.

Next time a child is left behind, we'll know who to blame.

Meh

[Greyfox]

It's a government contract. It's pretty much guaranteed to go over budget! By the time they're done, they could easily be 2-3 times over their original budget!

Great!

[TaleSpinner]

Maybe now someone can fix Obamacare and write a backend for it that works the way it's supposed to.