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BGov Brief: Removing Wasteful and Duplicate Contracts in Federal Government

In September of 2011, President Obama issued a memorandum to reduce wasteful duplication in federal contracting.  The memorandum was part of President Obama’s Campaign to Cut Waste. The memorandum requires that starting January 1, 2012, all agencies will submit their business cases to a White House database before opening any new contracts for bids. The requirement is for all government-wide contracts and for other contracts with an estimated value of $250 million or more. For contracts that are planned to begin in 2014, the threshold to report to the White House drops to $50 million. All contracting officers must develop a business case that shows they have explored any existing contracts to avoid duplication, rather than starting a new contract.


The White House is hoping that agencies will work together to consolidate contracts and streamline the procurement process for agencies. By working together on contracts and avoiding duplication, the government can hopefully save millions of dollars. The current administration has its eyes set on saving money and reducing work for everyone involved in procurement, not only government - but industry as well.


In a brief written by Brian Friel, BGOV Analyst, Friel identifies ways that the government can help remove wasteful and duplicate contracts in the federal government. One of the ways mentioned is by taking a look at high-risk contracts defined by the GAO. Since 2005, GAO has issued a listing of contracts most at risk for waste, fraud, abuse and mismanagement. As Friel reports, the Administrator of the Office of Federal Procurement Policy at the White House, Daniel Gordon, stated that one option is to remove GAO’s high-risk distinction from contracts. By opening up contracts to multiple agencies, savings can occur and duplication can be avoided.


Friel acknowledges that avoiding duplication in government contracts is no easy task. When duplication occurs, companies who are planning to make the bid and submit proposals can drive up contract costs. Likewise, government is forced to staff more people and administer more costs, driving up the costs for government.


A final solution that Friel proposes is that agencies can combine their buying power. If agencies can work together to buy materials of a similar need, costs will be driven down and agencies will be more transparent in the purchasing process.


Like many different areas of government, one of the challenges for limiting wasteful spending from contracts is that there are not enough skilled and trained contract officers. The government is currently in need of more acquisitions professionals to monitor and enter into contracts with companies, ensuring that all qualifications are met, and that wasteful spending and duplication is avoided.


****For an inside look at BGOV and the data, insights and analysis used in the referenced brief by Brian Friel, please contact bgov@bloomberg.com or 1-877-498-3587****

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Tags: acquisition, acquisitions, jobs

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Comment by Jerry Rhoads on January 5, 2012 at 8:29am

It is great that the WH is collecting this data, but what are they doing with it? Will the data collected consist meaningful (and measurable) statistics that can be analyzed and [hopefully] used to identify contracts that are true duplicates?

In a perfect world there would be one contracting office each cabinet level department such as DHS, DOJ, DOI, and the like. Instead there are many procurement shops within the sub agencies and there lies your duplication of contracts. Maybe what we need to do is tackle the people issue first i.e. not just adding Contracting Officers, but streamlining and centralizing the contracting offices.

--My two cents

Jerry

Comment by Jaime Gracia on January 4, 2012 at 7:13pm

This is really a vast cultural shift, as waste in rampant via duplication. However, these initiatives are not really new, they are just getting more attention. What we see is that agencies, and the subcomponents, see themselves as unique, and thus eliminating any possibilities of standardization. Granted there are inherent differences, but there should be a bigger push to try and consolidate many of these requirements as the "uniqueness" cited as an excuse are normally not valid reasoning that ultimately leads to waste and delays.

Contract costs are not driven up as a result of industry's actions. Rather, the costs of doing business with the government are the costs that industry faces, and they do go up as a result of industry expending administrative efforts on multiple vehicles. It is inefficient, and also hurts government. 

The information on what is available needs to be communicated across government, in this should be done through diligent market research. Having the information readily available about how to execute a need would greatly help the acquisition workforce, as they try to meet their customers needs, but often do not have the resources to do their jobs as effectively as they could be doing as a result.

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