Contractors will likely always be used by the federal government—but these days they’re definitely facing more competition for Uncle Sam’s business.

The success of a recent NASA initiative suggests crowd-sourcing—soliciting the help of the American public—is poised to become a government-wide practice.

When NASA scientists were stuck trying to devise a formula for predicting solar flares last year, instead of hiring a contractor to do the work for them, they posted their challenge online and welcomed anybody to solve it.

The result: A retired radio frequency engineer from New Hampshire answered the call, offering analysis that may help the agency predict when solar particles might endanger astronauts. This solution came in less time and at a cheaper cost than it would have taken for a contractor to complete the task.

This method of citizen engagement pays only for performance, meaning an agency might receive an enormous amount of potential solutions, but need only pay for return on investment.

In a memo sent last March, the Office of Management and Budget’s Jeffrey Zients issued guidance on the use of prizes and challenges and called for the creation of a new website that agencies can use to post their challenges. That website, challenge.gov, was unveiled to the public on Monday.

Legal issues, like whether a challenge will involve intellectual property rights, will be addressed on the site.

Alan Chvotkin, executive vice president and counsel for the Professional Services Council, called for a balance between the use of crowd-sourcing and the traditional procurement process. There is currently no system in place to ensure such a balance exists.

Which method would you prefer? Is the challenge, crowd-sourcing method too informal? Or is it a welcome alternative to the sometimes tedious procurement process?