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Ideas to Improve Federal Acquisition and the Better Buy Project

From The Acquisition Corner

This week saw the launch of the Better Buy Project, a joint project of the National Academy of Public Administration and the American Council for Technology-Industry Advisory Council in conjunction with the General Services Administration. According to the website:

…The acquisition process represents one of the most important areas of collaboration between government and the private sector.

Unfortunately, it is also among the most complex and least transparent. The Better Buy Project is an experiment dedicated to the belief that there’s a lot of room for improvement in the way government buys products and services. We’re testing this hypothesis by asking for your ideas on how to make acquisition process more open, transparent and collaborative.

The best part of this project is that the U.S. General Services Administration (GSA) GSA would really like to adopt some of your best ideas. Promising ideas will be selected by GSA to be piloted on an upcoming acquisition, where lessons learned will be captured for future implementation. But that really depends on us, and the ideas we’re able to produce…

To that end, I certainly will be actively involved in adding my opinions and ideas to improving the process. To improve my ideas, one of the best leaders in common-sense approaches to the federal acquisition process, Steve Kelman, wrote a blog post that discusses some of the issues I have had and will refine, in addition to some others that are worth considering. Here are five of his suggestions that deserve more attention than they are getting, with my comments and ideas for further improvement.

1. Make past-performance evaluations more meaningful.

I have stated on several occasions (here and here) that past performance needs be one of the most important, if not the most important factor in evaluations during source selection. However, improved contract management strategies are needed through training and leadership to ensure contractors are evaluated and rated in a fair and timely manner. One of the issues with documenting past performance is undue influence by contractors, who have a lengthy and cumbersome process to challenge reviews they do not like or agree with. I absolutely agree with Dr. Kelman that the Federal Acquisition Regulation (FAR) language should be eliminated that allows a contractor that doesn’t like the evaluation to appeal to a higher level. Government officials should have the flexibility and the authority to evaluate performance, and just let contractors critique the review in the file. The onus should be on the contractor to refute the bad review, and not be allowed endless appeals in an effort to ensure a review is in line with industry demands.

2. Reward vendors for suggesting cost-saving ideas.

This is one the fundamental principles of using Web 2.0 technologies to exchange information between the Government and industry. Although the FAR encourages the exchange of information with industry during pre-contract award phases, contract personnel often view this activity as undue influence or not to be encouraged. Instead, the Government continues to push unrealistic and poorly planned solicitations without thorough vetting of requirements. The ideal environment for the Government is one where collaboration tools are leveraged to effectively share knowledge about requirements during the pre-solicitation phase, where these participatory exchanges can be used to evaluate who will provide the best savings to the Government. Further, these exchanges and collaborative environment can also help transition into a performance-based contracting atmosphere where the Government can get out of the requirements development business all together and focus on needs, objectives, and mission.

3. Revive share-in-saving (SIS) contracting.

This technique works by paying the contractor, all or in part, based on the savings it generates through the contract. According to Dr. Kelman, he was not fond of what he called a “vicious defamation campaign by the Project on Government Oversight — whose officials would rather have a contract fail than see a vendor make a profit — and benign neglect (at best) from the Bush administration.” Although Dr. Kelman does not elaborate, I was not encouraged with the few attempts at SIS across Government.

In theory, this contracting method is not new or particularly innovative, but certainly a best practice of world-class procurement. My issue with this technique is what is needed to be successful; clearly specified outcomes (e.g. generating savings by eliminating inefficient business practices, conservation measures, identifying new revenue centers, etc.), clearly defined incentives and performance measures, and commitment from top management and leadership. These precursors have been an Achilles heel of Government and the acquisition community for various reasons (i.e. workforce numbers and quality, training, etc.). I believe step one is shoring up the acquisition workforce, train them, ensure the capabilities are present to execute these initiatives, and then move forward on process improvement and instituting best practice techniques in parallel to see real changes and improvements.

4. Use contests as a procurement technique.

This item is similar to competitive prototyping at Defense, and another best-in-class technique to help defray the expensive costs of large procurements, properly manage and transfer risks, and improve technological maturity for better investment decisions. The Government cannot continue to dump millions, and in some cases billions, into unproven technologies without defined requirements without clear, accurate, and realistic cost, schedule, and performance outcomes (e.g. Future Combat Systems).

5. Make successful contract management experience a promotion criterion for program officials.

Accountability needs to be the name of the game for successful outcomes. This has to come down from leadership, and to make contracting a strategic imperative for successful Government operations. Contracting touches most of operations, and needs to have the attention and investment in resources needed to fix the process, save money, and bring the acquisition workforce back to the center stage of being important players in the process of Government management. Because accountability seems to be a foreign concept, in addition to simply not having enough bodies, personnel who are not qualified are promoted and continue to experience problems managing contracts. I have often written about the need to focus on skills and capabilities in rebuilding the workforce upfront, but accountability needs to be front and center at the backend as well.

I look forward to further input by senior leaders’ such as Dr. Kelman into helping shape the direction into improving the acquisition process, in addition to the evolution of the Better Buy Project and implementation of the suggestion and ideas from this initiative. These programs will go a long way towards improving how the Government buys and manage its resources.

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Kitty Wooley

Jaime, this is very clear and thoughtful – thank you.

It seems to me that Federal Student Aid had a share-in-savings contract when it developed the Common Origination and Disbursement (COD) system a few years ago. That system, which combined Pell Grant and Direct Loan processing, rolled out in April, 2002. I think it would be useful if NAPA or Dr. Kelman were to study the outcome of that contract, in order to determine whether it worked out as intended. Then, there would be lessons learned to go with the theory.

Jaime Gracia

Thanks for the feedback Kitty. One of the issues is lack of data on SiS, so I’ll pass the information along and see what we find.