You Can’t Buy that…Or Maybe You Can?

bildeDear readers over the holiday season I did my fair share of shopping. Presents for my family were a must, but I also might have added one or two small gifts for myself. Maybe. But here’s the thing, as I hit up the mall and battled my fellow last minute shoppers, I was struck with a fear, how do I find the perfect gift for everyone on my list? Santa really does have a tough job. Finding the right present at the right price is a difficult task.

So you can imagine, finding the right technology or the right set of office chairs can be even more challenge for government procurers. Contracting officers have to think of price, usability, durability, ethics and even more when selecting a new product.

To help keep contracting in line when making purchases is the Federal Acquisitions Regulations or the FAR. The document has more than 99 parts and thousands of subchapters compiled together from hundreds of years of laws and regulations. The idea is that the document can answer any and all of your contracting questions. The rub however is that its sheer size can be intimating and can feel very restrictive.

But for Michael Fischetti, Executive Director, National Contract Management Association, the FAR is a practical, understandable and flexible document. “The FAR is adaptable to current government mission requirements and business trends in e-commerce, technology, and weapon systems and services. From cloud computing to future smart phone business transactions, almost anything can be met through the acquisition structure provided in the FAR. In short, the FAR is not the problem, people are.”

He told Chris Dorobek on the DorobekINSIDER program that the FAR is absolutely necessary to provide structure and guidance for government.

For almost three centuries Congress has enacting contracting requirements. Those requirements need to be codified somewhere hence the creation of the FAR. “Much of what in the FAR is already in statute, so to throw out the FAR would require the rescintoin of a variety of laws that in all practicality, I don’t see Congress ever doing,” explained Fischetti.

While regulations are critical to making sure government is above board, Dorobek argued that the FAR inhibits the government’s ability to procure new technologies in an agile way. On this point Fischetti agrees. “You are absolutely right. But I would argue that those issues and concerns aren’t being generated by the FAR. It’s internal agencies.”

Over time bureaucracy tends to creep into any system – the FAR is no exception. “Everyone wants to have a say in what is purchased and everybody wants to approve purchases. You have a chain that goes up and down different layers of a government agency. The FAR doesn’t mandate all of that,” explained Fischetti. “The contracting officer is the only one required to do most things. It’s agencies that have allowed the creep to develop. The FAR isn’t the problem, the problem is the way we organize and manage ourselves. The lack of agility is a human resources issue.”

But just because Fischetti believes people are to blame for some of the FAR’s complexities he does agree that the contracting document could be streamlined and simplified a bit.

Many agencies have tried to de-FAR. For example, the Defense Department went through a process where they streamlined and got rid of any unnecessary wording. “Maybe it’s time to do that to the FAR itself. A slight re-tweak, but at the end of the day, most of its principles would remain intact.”

One of the biggest complaints about the FAR is that it is too difficult and intimidating for new businesses to understand. The complexity makes companies, especially those in Silicon Valley hesitant to want to do business with the government that can lead to draught in innovation.

However, Fischetti notes the seemingly cumbersome regulations are there for a reason. “Part 12 of the FAR deals with commercial purchasing. Over time that section has been laden with requirements. Congress said regardless of commercial, we want a special clause on a drug free workplace, or trafficking in persons, ect. That’s all great stuff. It’s hard to argue against on most of those things, but it’s not how commercial buys. They don’t necessarily worry about that unless they have to. You go into Thailand and buy shirts that are very cheap. You may not be buying them from people that are paid equitably, or working under proper conditions. The regulations are about smart people, business oriented, mission oriented, goal oriented individuals that work together in teams and see the big picture.”

The VA trying to help both commercial businesses and contracting officials better understand the market so they can reach out to each other more effectively. “The VA is setting up a new course at their academy, called Market Intelligence. It’s a class teaching government managers, requirements folks, programs managers, and contracting managers, how to go about constantly surveying the market. The FAR talks about market research and highly encourages it. In market research your just doing research for a potential new requirement. The ability of government managers to know how to do that is key.”

Additionally the FAR could be improved in the area of cost accounting standards and approved accounting systems. “We might be able to offer exceptions and ways of letting small startup companies that don’t want to set up an accounting system to meet government cost reimbursement requirements still work with government. I think that could and should be done so that you get to that level of innovation,” said Fischetti.

To Fix the FAR – Government Needs to Fix Human Capital

Fischetti noted that people are the biggest barrier to effective contracting. “We need to address the professional development issue. We need to change the way we hire. The contracting process is an exemplification, a sort of an external visible example of issues within the government itself. You could look at other areas of government and probably find similar situations where contracting managers can’t hire who they really want.”

One of the missteps last year for government was the rollout of Many insiders said poor contracting was to blame for the troubled rollout. But Fischetti disagrees, “With it wasn’t actually the contractual situation of relationship that caused a problem. It was program management. In the development of no one knew who was in charge. One of the reasons is there is no program for development of leaders in contracting. How can anything succeed if there isn’t chain a command? The Professional Services Council issued a report calling for a wider recognition of program management.”

There are so many myths surrounding the FAR – most of which aren’t true. The Office of Management and Budget and the Office of Federal Procurement Policy have both launched myth busting campaigns. “There is such a folklore around the FAR. I’m always amazed. You wouldn’t believe sometimes the lore or general counsel opinions that prohibit government agencies from their going out and leaving their desk or talking to anybody. Contracting officers often believe if they have one conversation with one company they need to have the same conversation with 150,000 other companies. It’s not true.”

In the most basic terms, Fischetti explained the FAR like a grocery story. “The FAR is like the internal process you probably go through when you go to the grocery store. You go down an aisle and you chose one aisle over another. You probably chose one product over another product, and you were making best value decisions on the fly. All the FAR does is try to codify that decision because it is public funds and people need to account for what they spend. It’s not your money, so you have to say well here’s the reason why.”

This interview is part of a series on the DorobekINSIDER looking at the FAR. Others in the series include:

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Peter Sperry

I would have a bit more confidence in his analysis if he understood the nation has not yet existed for three centuries and Congress could have no more than a 226 year track record. It is one thing to get the basics wrong but at a certain point, it really does undermine credibility.

Also it seems more than a bit counterintuitive that polices optimized for the 18th and 19th century are the best way to address challenges of the 21st.