There has been plenty of discussion about how governments are using social media to engage with the general public and open up their vast amounts of data to collaborators. The interagency collaboration occurring behind government firewalls using wikis and blogs is also well-publicized. A topic that’s received less attention are the ways that social media and the principles of openness, collaboration, and authenticity are transforming how the government does business. How is social media changing the government contracting process? That’s the $500 billion+ question.

The world of contracting is one of the most important, complex, and least transparent within our Federal Government. From 100-page Request for Proposals (RFPs) to GSA schedules to organizational conflicts of interest to non-disclosure agreements (NDAs), the environment has long discouraged real discourse in favor of strict rules, processes, and policies. Too many companies of all sizes are frustrated and overwhelmed by the intricacies and red tape connected to doing business with the government.

But social media has brought about some positive changes. Here are three important ways it’s done so.

As Supreme Court nominee Elena Kagan put it, “bureaucracy is the ultimate black box of government … [it] is impervious to full public understanding, much less control.”

Five years ago, if a junior consultant wanted to talk with someone like Linda Cureton, NASA’s Chief Information Officer, about Spacebook, he would have to:

• Brief his manager on why he wants to talk with her
• Discuss his business objectives for the meeting
• Get his manager to contact a senior manager within the NASA account team and schedule a meeting with him/her to discuss intentions
• Discuss his business objectives with him/her
• Hope that this person would then have the time to reach out to Linda’s assistant to get on her calendar
• Attend the meeting with a NASA account representative (because a junior consultant couldn’t go by himself)

Those are six steps of red tape, all for a quick follow-up conversation with an acquaintance from a networking event. Unfortunately, the culture of the government contracting industry was one where everything, including everyday conversations, was heavily controlled and regulated. Nevermind if the conversation had nothing to do with a current procurement or new contract — it was just safer to avoid talking altogether.

Social media however, has allowed us access to this black box and the humans inside. According to a recent 2010 Federal Community Social Media study by Market Connections, 55% of respondents are using social media either formally or informally to communicate with their government audiences. I can now follow more than 30 government CIOs on Twitter, I can friend them on Facebook, and I can comment directly on their blogs. What used to take six steps now takes one direct message: “Linda, I’ll be down at NASA HQ for a meeting today – would love to talk with you about Spacebook while I’m there if you’re available.”

For me, the tipping point came when potential clients started contacting me on Twitter and my blog instead of calling the “official” points of contact listed on established org charts. Once we saw social media as a new way to actually conduct business, our legal and marketing teams went to work revising our communication and social media policies. While we’re still highly encouraged to involve the right people with the right expertise as we talk with our clients, the social networks of many of our junior employees are now rivaling the Rolodexes of some of our senior staff.

If you’ve ever done business with the Federal Government, you’ve probably encountered a process that is “challenging, complex, convoluted, and inconsistent,” and you’ve “encountered high barriers to entry, or didn’t get the communication you thought you needed or had to have.” That was the opening line of Mary Davie’s address at Tim O’Reilly’s Gov 2.0 Expo held in Washington, DC this past May. Davie is the Assistant Commissioner for the Office of Assisted Acquisition Services (AAS) in the GSA’s Federal Acquisition Service (FAS).

Disclosure: I was on the Gov 2.0 Expo Program Committee.

Yet we all accepted these struggles as the norm because “that’s the way the government works.” Government contracting is a $500 billion a year industry, involving thousands of people, thousands of companies, and just as many rules and regulations. The complexity of this problem has been exacerbated as government agencies all interpret these rules and regulations differently.

That’s where the Better Buy Project comes in. Developed as a joint project of the National Academy of Public Administration and the American Council for Technology in conjunction with the GSA, the Better Buy Project implements Uservoice to create a public platform where anybody can submit, view, and comment on ideas to make the government acquisition process more collaborative and transparent.

One of the implementations is the Better Buy wiki where anyone can ask questions and help shape future procurements in a transparent manner. The GSA is using Twitter to update interested parties on the status of active procurements. The Better Buy blog allows the public, the government, small business, big companies — anyone — to get new perspectives and expert viewpoints on making the acquisition process more open and accessible.

What if the Federal Government, industry, local governments, small business owners, concerned citizens, and academia worked collaboratively to solve some of our nation’s toughest problems? It’s happening in the government contracting industry.

Thanks to social media, the walls that guarded against leaks of proprietary data have given way to conferences, meetups, and webinars where most participants subscribe to the “rising tides lift all boats” theory. At these events and sites, contractors, government staffers, media, and interested citizens gather together to talk about everything from the challenges of implementing open government to how government can better collaborate on issues related to the Gulf Coast oil spill.

Larger and more complex contracts mean many former competitors have now become collaborators. Government contractors large and small have recognized that instead of waiting for proposals and information, they can now work together to help define those requirements, saving time, improving quality, and increasing transparency.

These benefits don’t come without risks though. Complex contracting rules and regulations still exist and still apply. The culture of collaboration among the contracting community at events like the Gov 2.0 Expo does not decrease competition in the industry, but rather increases the quality of competitive submissions for billion dollar government contracts. The wiki that the GSA is using to bring more transparency and collaboration to the federal procurement process is leaving ethics officers, contracting officers, project managers, lawyers and technical advisers grappling with how to adapt to these new open and transparent processes.

Despite how far we’ve come over the last five years, there is still a long way to go before doing business with the government is as easy as doing business in the private sector. The Federal IT Dashboard is a great start, but it’s just the tip of the iceberg. Data transparency doesn’t necessarily lead to operations transparency.

Policies, regulations, and laws need to be updated. Contracting professionals need to learn new skills. IT security and privacy controls need to be adapted to protect confidential and proprietary information. Most of all, the people — the contracting officers, the project managers, the lawyers, the marketers, the proposal writers, and the IT specialists — need to stop talking about how difficult it is to do business with the government and instead focus on asking, “What makes this process so complex and what can I do to make it better?”

— by Steve Radick, a communications consultant with Booz Allen Hamilton, a global technology and strategy consulting firm – Mar. 7, 2010.