The encyclopedia · Strategy & Leadership · Operational decision · 2010-2023
The U.S. Challenge.gov paid prizes for solutions instead of contracts
Challenge.gov let agencies post a problem and pay for results; it hosted 700+ competitions and one NASA challenge cut a cost 42%.
U.S. General Services Administration · U.S. federal agencies
the move
Agencies that wanted innovation usually bought it with a contract, which pays a chosen vendor for effort and closes the door to outsiders with better ideas.
The 2010 America COMPETES Reauthorization Act gave each agency prize authority, and GSA launched Challenge.gov as a single public platform for prize competitions.
Agencies posted a stated problem with a purse, and solvers submitted solutions; the award went to the best working entry rather than to whoever was paid to work on it.
NASA's Astronaut Email Challenge illustrates the effect: it used a $23,638 prize pool and solved the problem for about $81,000, a 42% saving versus the estimated $193,000 contract route.
why it works
- Paying for an outcome invites anyone who can solve it, not just the firms that bid on the contract.
- A prize is spent only when a solution exists, so the agency holds the risk of failure instead of paying in advance.
- Publishing the problem draws solvers from outside the usual supplier base, widening the idea pool.
- The platform let many agencies run prizes without each building new procurement machinery.
what transfers
When you pay only for a working answer, the pool of solvers widens and the cost is tied to success, not process.
what came after
By the mid-2010s Challenge.gov had hosted more than 700 competitions across more than 100 federal organizations and GSA had trained 1,500 staff on running prizes; FY23 data showed the number of competitions and the total prize purse both rising. Challenge.gov's own portal was sunset in 2026, but the prize authority and GSA toolkit remain.
references
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