Singapore Pushes Outcome-Based Procurement

Singapore's GovTech agency champions Outcome-Based Procurement (OBP) for all information and communications technology (ICT) solutions where no off-the-shelf product exists and co-creation with industry is required. This approach allows government agencies to present problem statements and desired outcomes, enabling vendors to propose innovative solutions without being tied to a prescribed technology. The goal is to shift from prescriptive requirements to creative, objective-focused results. The OBP workflow is staged, allowing agencies to trial solutions through validation tests before committing to full-scale deployment, and vendors do not need to participate in separate tenders for each phase. This model is part of a broader strategy to crowdsource ideas, sometimes through hackathons held alongside the procurement process to shorten development timelines. Since 2020, all Singaporean government entities have been required to use outcome-based contracts for security services unless there's a strong reason not to. This mirrors a push within the U.S. federal government to adopt similar models, especially for AI. New Office of Management and Budget directives, M-25-21 and M-25-22, mandate that agencies define outcome-based requirements and use performance-based statements of objectives for AI procurement. This approach encourages agencies to focus on what success looks like in measurable, mission-performance terms, such as reducing claims processing times by a certain percentage. The U.S. approach often pairs outcome-based contracting with AI incubators or sandboxes, allowing agencies to test applications in a secure environment before committing to large-scale contracts. The Centers for Medicare & Medicaid Services (CMS), for example, used an outcome-driven contract to procure AI services that modernized operations, including a chatbot that drastically reduced ticket creation time and a tool saving the agency an estimated $3 million per month. This shift is supported by proposed modernizations to the Federal Acquisition Regulation (FAR), which aim to reduce procedural drag and prioritize mission outcomes over rigid compliance. The changes encourage acquisition teams to conduct proactive market research, build requests for proposals around business value, and use flexible pathways like Other Transaction Authority (OTA) to test AI-enabled solutions. Singapore is also heavily investing in AI, committing over S$1 billion for infrastructure and talent, and recently launched the Digital Enterprise Blueprint to help businesses, including SMEs, adopt AI-enabled solutions. In January 2026, Singapore released the world's first Model AI Governance Framework for "Agentic AI," providing guidance on deploying AI agents that can take action on a user's behalf, emphasizing that humans are ultimately accountable.