2018 Government Innovation Awards

AI and automation can transform acquisition

At the Department of Health and Human Services, acquisition is a complex beast. The agency spends about $24 billion annually on a wide range of items, from cutting-edge technology to nitrile gloves. And 39 separate acquisition offices bring their own labor-intensive processes to the task.

BuySmarter Initiative

Department of Health and Human Services

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That approach is inefficient and expensive. HHS officials have discovered price variations of more than 300 percent for the same products purchased under identical terms and conditions. To improve the process, the agency developed the BuySmarter initiative, which capitalizes on machine learning, robotic process automation and blockchain ledger technology.

The initiative started as a proof of concept to ingest, structure, analyze and report on data across HHS. Using IBM’s Watson, BuySmarter learned from 18 months’ worth of contracting data and now enables acquisition teams to access real-time information on departmentwide pricing and the terms and conditions for 10 categories of purchases.

The potential payoffs are massive. Lori Ruderman, BuySmarter project lead, said her team’s conservative estimate is that extending the best prices across HHS would result in $720 million in annual cost savings.

Additionally, all contracting data is now stored in a single database that is structured according to federal category management guidelines. There is also the potential for the project to be extended to other agencies.

Although HHS officials are not planning to offer a shared service, the reliance on a blockchain data layer and connecting microservices means it would be relatively easy for other agencies to join the ecosystem, said Jose Arrieta, associate deputy assistant secretary for acquisition at HHS. “Especially if you’re a smaller agency, wouldn’t you want instant access to $24 billion worth of purchasing data?” he asked.

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