Consultants: Tool, Not Crutch

There’s a way to use outside help well

When I joined the CHIPS Program Office (CPO), I was deeply skeptical of consultants. That skepticism came from experience: I had seen countless expensive contractors parachute into government programs, generate polished outputs, recommend things they weren’t accountable for executing, and then move on. I also knew how hard the procurement process was — it takes a ton of effort and time to get a contract in place, and that effort often feels wasted.

I was wrong. At CPO, consultants proved essential to our success, and I’m now convinced that it would be foolish to attempt to stand up any large-scale effort like ours without them. But I had to learn how to use that outside support strategically and effectively.

Four characteristics of consulting engagements

At the outset, we brought in a mix of consultants to help us get off the ground, engaging financial and industry experts, project management support, general consultants, and a large systems contractor to stand up the application infrastructure. As the program evolved, we layered in additional specialized support: environmental consultants came on as the application pipeline materialized; an investment firm supported loan underwriting; and we later engaged a Federally Funded Research and Development Center (FFRDC), federal credit experts, and law firms. At one point, we had over 100 consultants badged and working alongside federal staff.

In reflecting on what worked well, four characteristics and decisions stand out:

1. Scope: Were the contractors bringing specialized expertise or more general support to the table? Was the work itself specific or broad?

2. Managing uncertainty: How did we account for incomplete information when defining scope?

3. Mode: Were the contractors embedded within the team, or did they lob deliverables over the fence?

4. Duration and eventual insourcing: Were these pinch hitters, or did we anticipate long-running engagements?

Scope

One clear dividing line in effective contracting was whether we brought firms in for specialized or general-purpose work.

• Specialized work, such as financial modeling, commercial underwriting, industry expertise, transaction counsel, and environmental review, was well suited to outsourcing. These were highly technical areas that required expertise that is scarce inside government, and the cost of getting things wrong is high. Contracting gave us access to talent and institutional capability we could not otherwise assemble, and materially reduced risk. The narrow focus allowed us to inject support as needed.

• General work that sat closer to the core of the program itself, such as program and project management and strategic planning, proved to be a poor fit for consultants. One case in point: early on, we brought on a large consultancy to stand up a program management function, which was to provide a view into our project plans and progress against them. In practice, the consultants lacked the requisite context and ended up building project trackers that were just not a fit for us — the trackers created the appearance of control but were very clearly false precision. We were moving quickly, and strategic ownership, prioritization, and sequencing had to live inside the program.

Managing uncertainty

When building a new program, you don’t necessarily know what you’ll need down the road, which complicates defining expectations for an engagement.

There are two common ways to handle this. One is to plan for uncertainty in throughput, bringing in support for clearly defined tasks without predefining the volume or timing. In our case, evaluating applications and supporting deal teams fell into this category. The work itself was specific but the volume was unpredictable, and building in capacity to absorb spikes and hedge against attrition proved invaluable.

The alternative approach is to enlist broad “program management” support. These are consultants who are brought in to help with unstructured problem-solving or process design. It can be enormously valuable early on, but only under very specific conditions. Effectively outsourcing program management hinges on finding exceptional operators with the right mindset and orientation, deeply embedding them within teams, and requiring clear communication and management. Absent those conditions, generalized support can become a burden to manage that costs more than it’s worth.

Mode

Consultants can be embedded and operate like part of the team, or they can work at a distance, producing specific deliverables and managed through periodic check-ins. Both modes can work, but we found that embedding dramatically increased efficacy — especially for work that was moving quickly. Embedding was essential for general unstructured work.

This was one of the problems we ran into with the program management function. Outsourcing such general functions requires shared context and foresight that the consultants could not have. Without it, an engagement is too disconnected from the pulse of the program and doomed to fail.

Embedding changes the risk profile. It won’t solve a poorly scoped engagement or make up for bad staffing, but when consultants were on site and treated like staff — included in team meetings, receiving real-time information as priorities shifted, and operating under clear day-to-day direction — we were much better able to make general support and unstructured problem solving useful.

But mere embedding doesn’t guarantee success. Effective embedding requires strong contractor-side leadership: someone who could absorb context, manage their own team, and adapt quickly without constant government oversight. When done well, the context gained through embedding enables flexibility, letting you move staff around as needed.

Duration and eventual insourcing

Over the course of the program, we had to decide whether to bring certain functions in-house. No complex organization, public or private, insources everything. It’s tactically important to distinguish which services should be temporarily outsourced and eventually folded in, and which should be enduring contractor engagements.

It’s hard to make that call at the outset. For example, outside industry experts were essential early on in orienting ourselves to the semiconductor ecosystem, helping us understand firm behavior and check our assumptions. But as we hired staff and built our own networks, that need diminished. What began as essential context-setting support became something the institution could — and should — do for itself.

Process design followed a similar arc. Early in the program, having outside support to translate ambiguity into workable processes was enormously helpful. But as we did more reps, it became clear that outsourcing the capability indefinitely would be unsustainable. We decided to learn and adapt their underlying frameworks and own the work ourselves. Unlike the gradually diminishing need for industry experts, this was a deliberate decision and required a careful transition as we brought the function in-house.

Leaders need to be intentional, early and explicitly, about which capabilities they expect to remain external and which they ultimately want the organization to own. Deferring the question makes transitions far more difficult.

Procurement rules make all of this harder

Designing a fruitful contracting engagement is further complicated by the rules governing federal acquisitions, known broadly as the Federal Acquisition Regulation (FAR). Those rules exist to prevent corruption; the system is designed to limit discretion and contracting officers face serious consequences for getting it wrong. The cumulative effect, however, is a layered system that makes it difficult to get exactly what you need, when you need it, or to optimize for outcomes rather than lowest price. Even when we knew exactly what specialized expertise we needed, procurement timelines made it hard to enlist it at pace.

To avoid those delays, agencies often rely on simplified acquisition procedures or other faster pathways. But those alternative routes are still slow and come with their own tradeoffs, limiting who you can contract with and contract size. For program leaders already operating under pressure and uncertainty, these constraints compound the challenge.

I’m not a procurement expert, but I’ve seen and done enough to know that the system is a bear. Making it work requires creative procurement professionals who understand the process deeply and are willing to optimize for program outcomes, not just compliance.

And even with competent procurement staff, supporting the process requires many cycles of administrative work by program staff. Both our internal procurement function and the staff at NIST helped us find the most efficient pathways, but it still ate up a lot of program leadership’s time.

Fresh eyes help

This is purely anecdotal, but the most effective consultants were generally those with less experience contracting with the government. Teams that were frequent flyers in government work were less adaptable; it seemed to me that they had absorbed some of the worst intuitions about how government works. By contrast, firms with stronger commercial orientation and less government muscle memory tended to move faster and pivot more easily.

This may be a byproduct of the broader consulting industrial complex. Firms that have adapted to government procurement are often better at winning contracts, but that does not imply that they can operate with necessary urgency and adaptability once inside a fast-moving program; the investments they’ve made into navigating the FAR to win work have exactly nothing to do with their ability to actually deliver. I’m left with the belief that bringing in newer or less traditional players for critical work is worth the effort, even if they are harder to get through the procurement gauntlet.

A case study on effective contracting

Though I derived some of these insights as we built the program, in hindsight, it’s clear that one of our engagements embodied the principles of good contracting.

This particular contractor started working with the Department of Commerce before CHIPS was even passed; over the course of several contracts, they gained a wide remit, working on both general and highly specialized functions. They built out some of the economic models and supported development of the Internal Rate of Return (IRR) framework used in our investment process. They also provided staff augmentation to the deal teams, working alongside federal employees to evaluate applications. They were up to the task of unstructured problem solving and, in the absence of precedent, their process design expertise helped us build a complex program.

Other contractors had similarly broad mandates but were less effective. The success of this particular team came down to a few key factors:

• Most of their team was embedded with us, in the office, most days of the week. They joined staff meetings and were treated like regular feds. Their proximity enabled greater flexibility, letting us move them between process and deal support functions as needed.

• Their team was overseen by an exceptionally talented manager from the firm. We could rely on her as our main interface and rest assured that her team would be kept up to date, and that she’d prioritize work and shift resources as needed.

• The firm sent us high-quality staff across the board. I’m told that when a project is going well, it creates something of a virtuous cycle inside a consulting firm, enticing the best people to join the team. The actionable takeaway here is to do what you can to get talent you’re satisfied with — pay more for top-tier people if you need to, and don’t hesitate to demand a switch if they fall down on the job or if the person leading their team isn’t a match for your program and culture.

Even with a successful engagement, the rules get in the way and make it a real chore to keep resources that are working well. Given the success of this specific team, we absolutely needed to keep them in the mix. They were not a small business and they didn’t do much business with the government — a good example of the fresh eyes I came to appreciate. They were expensive, but they moved at pace and were highly adaptable. And so we did the dance that everyone does, bending over backwards to find a vehicle or a prime that would let us extend the services without breaking the rules.

Each time we had to re-up or extend their contract, we were forced to re-evaluate whether (and how) to build internal capacity. Despite our abundant resourcing, it always felt we had just enough to keep moving forward. We didn’t think we could afford to let these valuable players go — they were deeply integrated into the team’s work and understood the investment process, the context, the personalities, and the pace. We had growing concerns about cost and knew that this arrangement could not continue indefinitely, but their efficacy made them even harder to unwind.

Though we valued their contributions, it became clear that their process design work, while exceptional, was not unlearnable. We had done enough reps with them that I started to suspect we could carry this work forward ourselves. I didn’t want our program to only be viable if we had outside support.

This was contentious. The consultants made things easier, more polished, and faster, and rolling them off would create more work for senior staff who were already stretched. There was also a real fear that things would break — we still had a significant pipeline of deals to manage and had not yet finished designing our award phase process or the post‑award apparatus. This was the one time Todd Fisher and I got into an actual argument. This debate was less about whether the consultants were valuable and more about risk: Todd viewed the staff augmentation as insurance against missing deal deadlines in a moment of extreme capacity strain. I was weighing that risk against the growing cost, oversight exposure, and long-term dependency. We arrived at a compromise and decided to internalize the process design component but retain surge capacity for the deal team.

Without their help, things moved more slowly. Our analysis was less pristine, and we no longer had professional note-taking in every meeting or folks who could turn detailed decks overnight. But the disasters we feared did not come to pass — we did not miss critical issues that we worried only the consultants would have caught. The system did not fall apart.

Looking back, I’m glad we made the call to bring things in-house. We absolutely needed this team to start, and we benefitted from watching them lead design for many of our processes. We used our final weeks with them to closely observe what they’d done, which positioned us to take over and design later phases of our process without incident. Teams could stand to be more willing to transition ownership of key functions, and I now know to keep an eye out for functions to reabsorb.

CPO could not have succeeded without consultants. Some were indispensable. Others were underwhelming. The process sucked nearly always, even with the best procurement folks helping us out. Hindsight afforded us a few clues as to how we might do this better, and taught me quite a lot about the value of thoughtfully outsourcing to meet the moment.