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Improving Federal Acquisitions: Let’s Do It Right

Over on Federal Computer Week, Dr. Steve Kelman has written several blog posts on The Lectern in a series of issues related to improving federal acquisitions and communications, specifically information technology projects. Although I have commented on the specific blog posts, I wanted to have a more in depth discussion here.

Improving Federal IT Acquisitions

I felt the wrong questions were being asked.

…Early in the conversation, Dan Gordon, on the panel as the administrator of the federal Office of Federal Procurement Policy, posed an important question in a very interesting way. He asked: “I am guessing that many in industry know when they read an RFP [request for proposals] that the government is putting out to bid a program that is likely to fail. Yet I am also guessing that industry seldom says this to the government. What can we do to change this?”…

Many issues are raised with this line of questioning. First, what benefit would industry have at this stage in the acquisition to be offering advice on an RFP? None really. In fact, I believe that this type of information would put industry at a disadvantage, since the government would never pull an RFP or even consider reshaping requirements since an enormous amount of effort and time have been dedicated at this point. For large IT acquisitions, it sometimes takes years before and RFP gets issued. Although sometimes requirements are so poorly written that cancelling an RFP and starting over really is the best solution, this seldom happens. Programs fail before they even start, and taxpayers get fleeced. This story is all too common in federal procurement.

The real issue here is to get the requirements properly structured so that the program can be successful from the beginning. Using the current Federal Acquisition Regulation (FAR), all the tools already exist in Market Research (FAR Part 10), andExchanges with Industry Before Receipt of Proposals (FAR 15.201). So why are these techniques seldom used? What can be done to improve this process?

Contracting personnel, in addition to project and program managers, need to understand that the current process is not working. The fear of protest, possibly unethical behavior, or unknowingly giving away proprietary information (i.e. risk aversion) needs to change. If these fears proved to be the case, the FAR would outright prohibit any exchanges with industry in the first place. Government personnel need to understand that programs fail at the beginning, due to poor acquisition planning and poorly defined requirements. Almost any Government Accountability Office report on acquisition failures will undoubtedly have these statements in the Executive Summary. What was the definition of madness again?

One initiative that needs to be expanded and fully embraced is the General Service Administration’s Better Buy Project. This initiative has had successful trial runs using Gov 2.0 techniques (e.g. blogs, Wikis, etc.) to solicit input and feedback on both the federal acquisition process, but also on specific procurements using crowdsourcing methodologies to help improve the communications process between GSA and industry. There is no more equal playing field than using these techniques, since everyone has the opportunity provide input and helping ensure a procurement is successful from the beginning.

The biggest barriers are of course cultural. What is very telling are some of the comments from both sides of the issue on Dr. Kelman’s post, illustrating the great divide and skepticism that exists from increased access and communications.

Government’s Side:

…One major issue is: companies do not necessarily want to hand over their expert critiques to the government for free. Companies often find their top ideas used to fix a bad requirement–that is free consulting. They are giving away their ability to differentiate themselves from other firms that don’t see the flaws and/or don’t know how to solve them. Secondly, if companies were truly partners with the government, this would not be a problem. However, neither government nor contractors really want to be partners, in fact. If they were, they would accept the consequences together of bad outcomes, and the companies would make no money. No one has ever seen a government contract that reads remotely like a partnership agreement. Partnering is hackneyed, misleading, self-serving, and false in just about all its usages in the government contracting arena…

Given a chance, I believe that industry would gladly help the government resolve issues up front in the requirements development process, again if given the chance. I do not believe it is practical, nor realistic, to think that industry will voluntarily tell the government an RFP is a disaster. Several reasons include the fact that these comments will fall on deaf ears, or worse, adversely affect a company’s image.Further, the notion of best value seems to be elusive, as lowest costs seems to be the primary source of contract awards. Why bother adding value when lowest cost is desired. Perhaps value engineering should be part of every project, and adding the lessons learned to future engagements.

However, it is the partnership that will ultimately lead to program success. The comments left by this reader are unfortunately not uncommon, and somewhat true. Many firms have a vested interest in the status quo, and do not seem eager to change their approach. I also do not see the practically in using industry feedback as some kind of evaluation factor as Dr. Kelman suggests. This approach would undoubtedly lead to self-serving “improvement requests,” which is what best value is supposed to correct for anyway; what is in the best interest of the government (e.g. exceeding requirements and differentiating a proposed solution).

Industry’s Side:

…Both responses to your suggestion are accurate. We, as contractors, don’t want to be in the position of suggesting to an agency that their pursuit position is incorrect. We never know who accesses those types of comments nor how they may react to suggestions to improve their position. The second suggestion is more prevalent than many expect. “Cut and paste” RFIs and Sources Sought requests generally include inadequacies, inconsistencies and contradictory pictures of the agency’s true environment. These are indications that they technical involvement necessary is absent or lacking and making suggestions as to how to correct these are often not received well. In addition, fear of OCI issues has reached a point where these same contracts people will not even talk with or accept input from industry well in advance of the solicitation release. Until contracting people understand that the government encourages interaction with industry up to the release of a solicitation, these issues will not go away…

I do not believe that technical incompetence is the primary issue. I believe, and have experienced, that technical competence for a program is a function of acquiring that knowledge that normally exists internally. The fragmented way that the government buys is normally the culprit, where programs develop requirements in a vacuum without conducting a thorough stakeholder analysis, soliciting feedback or input for proper requirements development, then kick it over the fence to acquisition and contract shops. At this stage, not knowing the procurement or even the customer in some cases, contracting shops try to getting the procurement of their desk and take shortcuts at the detriment of the program, as the reader suggests. Using boilerplate information, templates, and checklists are a great way to streamline an acquisition. There is certainly nothing wrong with this approach, as I certainly use these tools with federal clients. However, tailoring the information carefully is vital, and sometimes this quality control is lacking in federal procurements.

The Organization Conflict of Interest (OCI) issue is another barrier to increased communications from industry. Many firms fear that being proactive in helping shape requirements will OCI-themselves out of competition for a particular procurement. This is a major issue that needs more thoughtful analysis, as the point of crowdsourcing is to solicit information from all parties equally, and allow for even greater opportunities for competition with requirements that are not overly restrictive and well understood by industry. Firms should not be penalized, nor should they have fear of being penalized. The government is doing itself a disservice by not properly proving these protections.

Overall, the closed-door mentality to communications is doing the opposite of what the latest acquisition reforms are trying to accomplish. I hope the Office of Management and Budget provides further guidance on this issue, and give industry a greater say in helping the government execute its acquisition reforms. All parties would benefit, especially the taxpayer in the end.

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Andrew Humulock

The Government is moving towards FAR subpart 37.6-the idea of leaving the “approach” to the SOO up to the Contractor and basing payments on stated objectives. Although, there is pushback from Federal Officials wanting to go FFP to control pricing. But then, the contractor has to “build in” risk into their bids thus causing higher pricing.

Jaime Gracia

Risk transfer if of course part of pricing, but ultimately a better managed contract is possible with FFP as opposed to T&M, which will lead to lower prices and better delivery.