In January of 2009, OMB to issued an Open Government Directive [PDF - 86 KB] to prompt executive departments and agencies to take specific actions to implement the principles of transparency, participation, and collaboration. The directive specifically calls upon executive agencies to use innovative methods such as prizes and challenges to obtain ideas from and to increase collaboration with the public, including those in the private sector, non-profit, and academic communities. 

Section 105 of the America COMPETES Reauthorization Act of 2010 [PDF - 300 KB] provides federal departments and agencies with the authority to plan and execute challenges and competitions, and specifically authorizes the use of appropriated funds for these purposes.