Outcome Over Process: Transforming DHS Procurement for Efficiency and Innovation Part 2

Welcome to “HSDF THE PODCAST,” a collection of policy discussions on government technology and homeland security brought to you by the Homeland Security and Defense Forum

In this episode, We map a practical path to outcome-based contracting that trades complexity for clarity and speed. We unpack modular awards, the skills procurement teams need, how reform opens new options, and how industry can help us rewire habits for better results.

Featuring:
- Julie Koo, Chief of the Contracting Office for the Border Enforcement and Administration Portfolio, U.S. Customs and Border Protection (CBP)
- Denise Morales, Head of Contracting Activity, Transportation Security Administration (TSA)
- Shreena Morris, Head of Contracting Activity, U.S. Coast Guard
- Sarah Green, Deputy Chief Procurement Officer, DHS (moderator)

This discussion took place January 22nd, 2026, at HSDF’s Technology Innovation in Government Symposium

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Transcript

Using Flexibilities And Reform Tools

SPEAKER_03 0:01

Looking ahead, how do you see outcome-based contract evolving in the coming years? We talked about some things that happened this year that were significantly different, perhaps, from some of the things that we had done in the past, like really going to the table, looking at the entire portfolio of our contracts with a company and seeing kind of what where we could find those efficiencies, where we could look at contract conversions, where we could look at better outcome-based kind of things. But in the coming years, we are going to have such an opportunity through exploiting some of the RFO flexibilities and some of the flexibilities that frankly we have always had that we haven't been as good at really pushing the envelope on and seeing what the art of the possible is with all of those things. But what kind of skills and capabilities will our procurement professionals need to effectively navigate and lead in that challenging area? And uh Julie, let's start with you.

Skills Procurement Teams Now Need

Why OB Contracting Got Complicated

Modular, Agile Deals For Better Outcomes

SPEAKER_00 1:03

Yeah, um, so outcome-based contracting has been around a long time, as you all know, right? Um, so it's not new to any of us. I think what kind of happened was we made it overly complicated. It was taking a lot of resources for us to be able to implement proper outcome-based contracting. And sometimes, actually, if it wasn't very difficult, we weren't getting anything more than the baseline, right? We weren't getting something greater than what people were supposed to do in the first place, right? So now that we are kind of uh we have some of these tools, like we have AI, we have like the far overhaul. I think people are going to be able to spend their time to fine-tune this finer skill that I love, which is called government contracting. As much as people don't love it, is a fantastic field. And we're going to be able to sharpen our pencils, right? Our tools, to be able to do the art that is government contracting, which is very, very exciting. Um another thing that I think is gonna happen is I think this is gonna happen. Don't quote me, maybe we won't, but I think as we're moving to more modular contracting, we're going to start like piecing out these major contracts that are behemoth, right? Just large contracts where we can't define what the outcomes and the deliverables are going to be into manageable uh pieces of work that really deliver the solutions that we need, right? So this is going to give opportunities to smaller, mid-sized firms because we're not gonna just have these large contracts that are not well defined.

SPEAKER_03 2:46

Yeah, much more agile, iterative, kind of focusing on the end at the beginning, right?

SPEAKER_00 2:52

And that's what we're going to we're gonna have time to do that with some of these other efficiencies that we're gonna gain through AI and and the the reform.

unknown 3:01

Perfect.

SPEAKER_00 3:02

Denise?

SPEAKER_01 3:03

No, uh, and then for sure, and and if I were to then add um what our you know procurement personnel would need, um, it's it's education in a way. So I say education because they're at the table with our programs. Um they don't need to be the technical SMEs, but they need to know enough about the industry, enough about the problem, enough to know that AI, while a great tool may not solve all of it, there's gotta be some critical thinking uh to it. There's gotta be some conversations as to uh what the end goal needs to be and what hurdles need to be lowered and removed. Again, ongoing education, communication, um learning from you. Uh what is not working from an RFP perspective that they need to adjust. Uh what of the requirements. So there's a lot that we do expect from our our contracting field. Um it's it's not just contract knowledge, but they do have to learn a lot more uh to be able to be that partner that makes it happen. Uh because I see it as contracting is the enablers of the mission. Um there's not a mission set that does not get impacted through contracts. So they all in their respective categories need to know enough about that mission and marry up the federal acquisition regulations or any additional policies to make things happen. Yeah, absolutely, Shaena.

Data Analytics To Define Outcomes

SPEAKER_02 4:34

So just to build on um what the others have said, I think the key going forward is going to be critical thinking and a little bit of that data analytics. Um, so as he said, we're we're not experts as the contracting people. I can't tell you how many rooms that I go in and I'm like, what are we buying? All right, all right, so it's slower. All right, now say it differently. I I'm struggling to just better understand sometimes of what my customer is trying to get. So it's not my job to be an expert, it's my job to think critically and connect the pieces of the puzzle together so that I can help solution with my contracting team. But at the end of the day, it's got to have some sort of data-driven analytics. We're talking about outcome-based. How do you get to an outcome if you didn't analyze the data? You didn't know it, and if your data was bad, I don't know. Um, so I think for our contracting people, we don't expect them to be experts. We do expect them to think critically. So it's kind of hard to teach creative thinking, right? Um, it's stretching how we think, it's not just taking certain things for granted, it's um looking at it differently and getting different, diverse viewpoints and then sticking the landing and making a decision, right? Um, I think if we really dig in on the critical thinking aspect and really start to better harness data analytics, I think we'll be in a much stronger position.

SPEAKER_03 5:46

Yeah, I know I love that. I mean, who wouldn't love to buy like really big boats? Or is it ships? I get I guess.

SPEAKER_02 5:58

I'm still I'm only seven months into the job. They're still training me up, but yeah, um, Coast Guard's mission is pretty impressive.

Change Management And FAR Overhaul

Partnering With Industry On Strategy

SPEAKER_03 6:04

The procurement is amazing because I've gotten to buy things and then you learn about things when you're procuring them or when you have a major acquisition program where you have these things like you know, our careers in procurement can span these these like different topics, you know. You might have guns and ammo, and you might have really complex professional services, you might have cutters, you might have like all of these things. Um, so it is really amazing to get uh to get that span through your career. But we touched on some elements there I think are worth um sort of reiterating, and that's like the education piece and the critical thinking piece. And we, I think Denise said it, we have asked so much of our contracting teams. Um, when I started in contracting, my checklist was like it was like a page long, um, and it was cool. Like I had that down. I was a business advisor and like I knew what the checklist said. Um, the most recent checklist that we did for our contracting officers, I think, span seven pages. Maybe even like if you added in all of the other additional things and some helpful hints and tips, it's like 16 pages. So we've sort of exponentially increased what we ask contracting officers to do, and all of we might look at it as boxes to check, but that are actually very deeply important things that require critical thought and coordination with your program, with others, you know, all sorts of things. Um, and I think that's a very important point, especially as we look at the revolutionary fire overhaul and implementation of that. We're hoping that that checklist can be kind of pared down a little bit. And you need a very big acquisition team, especially when you're doing some of these really major procurements and very complex things. Um, but we have about 15, these are my 2024 numbers, but we have about 1,500 contracting officers, contract specialists across the department. Then we have about 15,000 members of the acquisition workforce. So your program managers, your contracting officers, representatives, you know, you're including your contracting officers, all of those, and that whole team, that whole procurement and acquisition team. And so we are in the middle of this process of trying to modernize our processes, trying to get all of those 15,000 people to understand exactly what you could do, like what is the art of the possible to move this forward faster, better, more innovative, more effective, and deliver on those goals that we have. And so I think I think we also ask industry to be mindful that this is going to be a year of huge change management for us as well across the entire federal government. We're doing a lot of training with our folks. We are very internally focused in some ways right now, trying to make sure that our own folks and frankly even ourselves understand what's happening with the revolutionary fire overhaul and what are the changes. Like being able to do a BPA off of an IDIQ is like mind blown. Um like, but I want to exploit that. I want to like really dig into that because there's opportunities there for industry, for us, for our programs, for the taxpayer, right? So um so there's just so much going on right now in that space. But um, you know, I think that's a really important point and something we kind of touched on, but just wanted to bring that home for everybody. Um so moving to that um that partnership with We have that we have with industry that is so important because when that partnership falls apart, you cannot expect good outcomes, right? So, so what would you guys offer to our industry leaders that are seeking to sort of leverage those recent reforms and deliver outcome-based solutions that meet our strategic needs? Um, like what kind of things can we can we talk about there? Uh Srina, let me start with you. Sure.

SPEAKER_02 9:59

Um Sarah said it's it's a year of learning for all of us. I think I'm struggling to catch up myself. Um so what I would say is if you're seeing an opportunity to engage um with a contracting officer in an agency and maybe they're advocating for a strategy or an approach, like don't be afraid to tell us. Like, hey, had you considered this? I know it sounds weird, but we really do want to hear from you. And I know sometimes the reception you get, it might not feel as happy, but that's okay. Um, don't be afraid to tell us that you you you did your research too, and you're curious, and had we considered, and I wouldn't say just get us the copy paste of the link. Um, like, hey, I I read your requirement. I was considering proposing. Here's one of these strategies that I would recommend. Here's why I think it's feasible. Like we can train each other, we can learn from one another. So sometimes uh in all of the noise and trying to keep up, maybe they did overlook something, maybe they didn't consider a possibility that you guys are our expert partners. Maybe you guys do know and you can share with us.

Patience And Rewiring Old Habits

SPEAKER_01 11:00

For sure, what Trina definitely is like listening from you. Uh, sometimes I feel like some of you may know more about contracts at some of, you know, as we catch up on uh our uh the RFO and new uh uh approach to doing contracts business. Um so hearing from you and what works, what's not working, like what other agencies are doing, uh, and as a result, is like, hey, this was a really creative way to uh do a technical evaluation on this type of proposal. I, Denise, uh, I you should really have your team consider this. I'd like to hear that feedback. What is working, what's not working, um, and what do you recommend best? Um again, it's it's it's a shift in mindset. Um changing behaviors and changing patterns do do take time. Uh so I appreciate the patience there, but the whole idea would be with more conversation, more of that engagement, the faster we can get there. Um, so I would just second that on the uh continued conversations.

SPEAKER_00 12:02

Joey? Yeah, I think I'm kind of gonna echo what everybody said. So what everybody said, and uh the word that I've been using kind of is rewiring. And I think uh it's going to be difficult, at least for me, and I think because I've been at this for a while now, and I think even industry uh you guys is wired has been developed based on what we told you was permissible and not permissible. A lot of times you have come to us saying, Hey, can we do this? And we're like, no, stop it. No, you cannot do that. You know, and and now is is time to say maybe you can do that. Let's let's let's talk about it, let's rewire the way that we're thinking about things. And that's gonna take time. And we also ask for patience, they'll be like, Well, we were at this panel thing and Julie said we need to rewire and but you know, and none of that place. Uh because uh, you know, Earl might be like, What did you say? Um But all that to say, be patient, we're all learning at the same time. Change is really happening, um, but it's not gonna happen overnight.

Better Requirements, Better Results

Authorities Update And Workarounds

New Paths: CSO, PPPs, Outsourcing

Closing Thanks And Next Steps

SPEAKER_03 13:11

Yeah, no, absolutely. So this year is definitely gonna mark a fundamental change and shift in how we operate, and you know, especially as we aim to match the pace and the agility of the private sector. So I just encourage industry to let your voice be heard, let the government know if you see those opportunities. You know, for our part, we recognize the need to engage with industry more and more effectively as we're developing our requirements. I always tell people you can have like the absolute perfect contract, but if your requirement was bad, your outcomes are going to be bad, right? So in response to that, we do have our industry liaison team has launched uh training and published resource guides on DHS.gov. So check those out. And we continue to enhance these efforts so that we can continue to better leverage industry's experience expertise to support the DHS mission. Before we wrap up, I did get another question also before we started. I wanted to quickly update you on a few of DHS's contracting authorities. Um the department's overall uh other transaction authority did expire a couple of years ago, although TSA has a very specific OT authority with TSA and Coast Guard has their own permanent OT authority, but we do not have that overarching DHS authority at the moment. Also, congressional authority for the small business innovation research and small business technology transfer programs has lapsed. However, phase three follow-on work that is properly traceable to prior awards can continue using non-SBIR funding and other available contracting authorities, right? There's always a way to get what we need. Um, so just wanted you to be aware of that. But in the meantime, we are encouraging use of commercial solutions opening pilot. That is a very useful tool as we're finding, and so I think you'll see more of those sorts of engagements and solicitations coming out. And we're also exploring new and innovative ways of doing business in general, like public-private partnerships or looking at outsourcing certain functions when it makes sense, and certainly deploying cutting edge technologies to advance the mission. So I encourage you to stay tuned for all of that. Um, lots of developments this year. And with that, I do want to thank you all for coming. We appreciate you. And um I can turn it back over to Mike.