Increasing Competition Means Raising the Bar on Value

From The Acquisition Corner

As part of the Obama Administration’s call for reform of the federal acquisition process, the Office of Management and Budget (OMB) recently issued a second set of memos with guidance on increasing competition for better outcomes. These memos are a continuation of original OMB guidance released in July, which outlined ways to improve acquisition processes, make better use of information related to contractors’ past performance, and balance the blended contractor and federal workforce. These initiatives are designed for agencies to achieve a 7 percent cost savings of their baseline contract spending by fiscal 2011, with overall expected savings of $40 billion annually.

In an effort to achieve these goals, OMB guidance states that improved acquisition outcomes through increased competition can be achieved by focusing on requirements and outreach to potential vendors. While this guidance can certainly go a long way to improve acquisition outcomes, OMB has fallen short in providing the specificity agencies need to execute these initiatives. Moreover, OMB also fails to mention one of the fundamental weaknesses in the current state of competition, which is to improve the quality of the vendors competing on federal contracts. OMB falls into the trap of focusing on quantity, which only exacerbates the competition problem by continuing the fixation of focusing on symptoms and not the disease. It does not help the government be a more strategic buyer nor promote innovation.

Many firms that offer innovative solutions are often brushed aside by the archaic decisions by agencies that award contract vehicles acting as gate keepers for who can compete on federal contracts. These processes are designed to treat all firms the same, but therein lies the problem. By restructuring these processes, improvements in competition quality can be realized, as the government can review the experience of firms and what they bring to the government in their totality. If higher quality businesses could qualify for such contracting vehicles and opportunities to compete, value could increase and costs could decrease.

The guidance also fails to provide clear instruction on collaboration, where real opportunities exist to leverage tools and technologies to exchange information with industry and improve knowledge transfer. The ability to leverage Acquisition 2.0 methods, as piloted in the Better Buy Project, demonstrates the potential of these initiatives that can and should be rolled out government-wide in an effort to standardize and improve how the government buys. These collaboration tools can help execute on the OMB guidance, which is to better understand the market, improve requirements development, and create opportunities for increased competition. This will ultimately set the stage for creating a performance-based acquisition construct and allow for a focused approach on oversight and accountability. Acquisition leaders who view these tools and techniques as unrealistic or time-wasters are not only missing out on real opportunities, but also possibly preventing the transformation of the acquisition process into a world-class, 21st century buying organization that these tools could help realize.

Only through the improved caliber of the supplier base can increased competition and quality be achieved, and it is the responsibility of government leaders to not only provide guidance, but the tools and techniques agencies need to accomplish the President’s goals for improving acquisition outcomes.

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Mary Davie

Jaime – you’ve hit the nail on the head. Quality vs quantity. I’ve been part of many conversations where the focus has been on quantity alone and we need to focus on the requirements definition and market research to ensure we’re getting to the right folks and collaborating with them to get the best ideas for government.

Jaime Gracia

One of the main issues I have seen is with stifling innovation. Many great firms with solutions beneficial to the government are turned away because they are unable to complete the eligibility checklists for government work. A firm’s complete solution package, based on outcomes in their totality, needs to be included in allowing these firms to be eligible for vehicles and contracts.

David Dejewski

The more clear and open the government is, the better the selection. The better the selection, the higher the quality.
Unfortunately, I have found three things continuously hindering quality selection:
1. The government person who initiates the requirement often has limited experience. The learning curve is steep for them: SOW, time line, LOE, IGCE, etc. It’s overwhelming. This factor alone squeezes the patience out of what might otherwise be a good process. Even with KO “hand holding,” there is growing tension throughout the process that often produces a “just buy it already!” attitude.
2. We keep very little by way of an institutional body of knowledge (think Lego blocks here) that KO’s and requirement generators can draw from, reassemble in rapid fashion, and produce a quality request. Where it does exist, it does so in tribal pockets. In many organization, each acquisition is a “custom job.” While customization is a valid part of the process, there is a lot we can do to leverage re-use and minimize variance and time.
3. A phenomenon I refer to as a “superiority complex” prevents us from realizing a lot of value. I once had a senior acquisition professional say to me “Contractors are like pencils. If one breaks or gets dull, you just throw them away and get another one.” This kind of thinking is self-destructive & prevents us from seeing value – even when a wide range of value is right in front of us.

To some extent, I believe that competition is there and would naturally bloom in the right system. We just don’t get past ourselves enough to see it, nurture it, and harvest it.

Jaime Gracia

You are correct in that requirements development is a fundamental issue. This goes to training in a holistic approach, in addition to ensuring open and productive communication between programs and contracting. I believe the Web 2.0 tools and the Gov 2.0 initiatives can go a long way to leveraging this need. The comment about contractors being pencils is disturbing and disappointing on many levels, but that is not a unique thought process. Culture is another important factor that needs to be reformed, through thoughtful and inclusive leadership.