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Engage Innovators Inside and Outside Government

Prizes and Challenges

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Bring Innovators into Government

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“A good Government implies two things: first, fidelity to the object of Government, which is the happiness of the People; secondly, a knowledge of the means by which that object can be best attained.” James Madison, The Federalist Papers

Purpose and Outcomes

Purpose: Prizes and challenges are an approach to federal contracting that promotes innovation by offering a monetary or non-monetary reward upon completing a specific objective or task (i.e., a challenge) (Source: The White House “Innovative Contracting Case Studies,” August 2014).

Prize competitions are a proven way to increase innovation for the public, private, and philanthropic sectors. Incentivized, open competition is a standard tool in many agencies’ toolboxes for delivering more cost-effective and efficient services, and advancing agencies’ core missions.

Using prizes can provide benefits for federal agencies that use them by

  • Enabling the Federal government to direct resources to projects with a successful outcome.

  • Establishing an ambitious goal by laying out a challenge for prize seekers.

  • Helping agencies extend their reach to new participants.

  • Increasing the number of people working on a problem without having to predict which team or approach is most likely to succeed.

  • Bringing out-of-discipline perspectives to bear.

To date, agencies have sponsored more than 740 public-sector prize competitions on, a website where tens of thousands of entrepreneurs and citizen problem solvers have participated and won over $250 million in prizes (Source: The White House, “A Strategy for American Innovation,” October 2015).


National Institute of Justice (NIJ): Ultra High-Speed Apps Under the general authorizing statute to conduct research and 28 USC Section 530C, NIJ launched the Ultra High Speed App Challenge to source new solutions to improve public safety applications. NIJ offered a $150,000 prize purse, and four winning entries provided real-time and individually tailored information to practitioners in rapidly evolving emergency situations.

NIJ’s Approach

  • The developers created a multidisciplinary team that included IT, finance, communications, and justice programs personnel.
  • Contestants were required to submit a working prototype of the software and corresponding apps. All submissions were required to demonstrate the need for the app; articulate the way in which the app would improve criminal justice effectiveness and/or efficiency; specify the public access databases used to support the app and the proposed method of acquiring and updating these data; and identify appropriate and obtainable impact measures.
  • NIJ spread the word through press releases and social media content while also performing targeted outreach at relevant conferences and events.

Learn More: NIJ Ultra High Speed App Challenge.


How can we create and run prizes and challenges?

When considering prizes and challenges, agencies should have a clear idea of what they are trying to accomplish with a prize, and how the prize will help them achieve that goal. A prize should not be an end in itself, but one tactic within a broader strategy for encouraging and shaping private innovation and change. Agencies should plan appropriately for all stages of prize development and, where permissible, consider partnering with other entities that might administer, support, or market the prize.

There are five distinct phases of tasks required to successfully run a challenge:

  1. Prepare
  2. Develop
  3. Conduct
  4. Award
  5. Transition

Phase 1: Prepare

  • Estimate your necessary resources and partnerships.
  • Determine if a challenge is the best tool for addressing your goals.
  • Identify your goals and desired outcomes.

Phase 2: Develop

  • Determine the prize competition structure and implementation timeline.
  • Work with internal groups to establish eligibility and submission requirements, terms and conditions, and judging criteria.
  • Connect with your communications team to outline your announcement and ongoing outreach strategy to engage contestants who can solve the problem.

Phase 3: Conduct

  • Roll out your communications plan, accept solutions, and interact with contestants to continue to generate interest and enthusiasm to solve the problem.
  • As submissions close, begin to evaluate entries, select winners, and verify winner eligibility.

Phase 4: Award

  • Determine the appropriate channels for announcing your winner(s).
  • Work with internal teams to expedite payment and document your processes.
  • Explore important nonmonetary incentives that reach all participants — regardless of winner status — such as detailed feedback, recognition, and information on follow-on funding opportunities.

Phase 5: Transition

  • Analyze and document the results, outcomes, and impact of your incentivized competition.
  • Evaluate avenues for remaining engaged with contestants as well as next steps for high-potential solutions, whether moving them into an innovation “accelerator” to quickly develop their prize solutions or exploring other channels for moving prize solutions to procurement.

Actions and Considerations

Setting up and running a challenge require flexibility. Develop a challenge that works best for your agency and your challenge goals.

  • Define the problem to solve and establish clear goals. Do not run a challenge if you don’t have a problem to solve.
  • Identify and engage appropriate stakeholders early.
  • Determine how you will fund the challenge.
  • Get leadership support and build your agency’s challenge team.
  • Prepare a communication plan before launching the challenge.
  • Sign up for an OMB Max login to use


  • S.3084 - American Innovation and Competitiveness Act, 114th Congress, December 2016. This stipulates that ‘Federal agencies may use crowdsourcing and voluntary, collaborative citizen science to advance their missions.

  • The America COMPETES Reauthorization Act provides all Federal agencies broad authority to conduct prize competitions as called for by the President in the Strategy for American Innovation. The American Innovation and Competitiveness Act updated important parts of this authority. All agencies and programs should be aware of the flexibilities offered by the COMPETES Act prize authority to source solutions from U.S. innovators. Under the Act, agencies have authority to establish ambitious prizes to advance national priorities:
    • Scope: The Act authorizes agencies to conduct any prize competition that will “stimulate innovation that has the potential to advance the mission of the respective agency.”
    • Size: Agencies can offer up to a $50 million prize without further consultation with Congress.
    • Multi-Sector Partnerships: The Act allows agencies to partner broadly with other government entities and the private sector, as well as solicit and accept philanthropic and private sector funds to support a prize purse or the competition’s design and administration. (For more information on the prize authority in the America COMPETES Reauthorization Act, please see the Fact Sheet and Frequently Asked Questions memorandum.)
  • Section 24 of The Stevenson-Wydler Technology Innovation Act of 1980, 15 U.S.C. §3719, as enacted by the America COMPETES Reauthorization Act of 2010, permits any agency head to “carry out a program to award prizes competitively to stimulate innovation that has the potential to advance the mission of the respective agency” (§24(b)). Section 24 authorizes agencies to use both private sector and Federal appropriated funds in order to design prizes, administer prizes, and offer monetary awards for prize competitions.
  • Agencies can conduct prizes under other authorities, such as agency-specific authorities (such as those that apply to DOD, DOE, and NASA); procurement authority such as that provided by the Federal Acquisition Regulation (FAR); authority to award grants, participate in cooperative agreements, or both; and authority related to “necessary expense” doctrine, among others. The General Service Administration has a contract vehicle (Schedule 541 4G) to decrease the amount of time required for agencies to tap into private-sector expertise that is critical to early success.

Additional Resources

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