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Modular contracting is
|“||[a] contracting approach under which the need for a system is satisfied in successive acquisitions of interoperable increments. Each increment complies with common or commercially acceptable standards applicable to information technology (IT) so that the increments are compatible with the other increments of IT comprising the system.||”|
Modular contracting is one of many approaches that may be used by Federal Agencies to acquire major IT systems. It may be achieved by a single procurement, or multiple procurements, but is intended to ensure that the government is not obligated to purchase more than one module at a time.
Modular contracting is intended to balance the government's need for fast access to rapidly changing technology and incentivized contractor performance, with stability in program management, contract performance and risk management. Analysis of relevant laws, regulations, and studies, etc., indicate that modular contracting provides a significant opportunity to help remedy many systemic IRM and acquisition problem areas. Its beneficial application, however, introduces a number of management and cultural challenges requiring increased attention to areas such as Agency architecture and standards, system integration, modular interoperability, program management and configuration control, and innovative contracting techniques.
Federal Agencies that can effectively meet and manage these challenges will be able to incrementally address complex IT objectives thereby significantly increasing the likelihood of achieving their program objectives.
ITMRA directs Federal agencies to use modular contracting, to the maximum extent practicable, for the acquisition of major information technology systems. The requirement is reiterated in Executive Order 13011 which instructs agencies to apply modular contracting "where appropriate" and "to the maximum extent practicable."