Reforming the Procurement System

Over the last two weeks, three events have highlighted the need for fundamental reform of procurement processes, procedures, and regulations in order to deliver a more efficient and effective procurement system. On July 11th, Joe Jordan, Administrator for Federal Procurement Policy, and Dan Tangherlini, Acting Administrator of the General Services Administrator, briefed the President’s Management Advisory Board on Strategic Sourcing. The briefing highlighted their efforts to increase strategic sourcing throughout government, and it included a discussion of plans for at least 10 new strategic sourcing initiatives over the next two years. The stated goal is to deliver $10 billion in savings by 2014.

On July 18th, the Coalition for Government Procurement conducted a Forum on the Future of Multiple Award Contracting. At the Forum, much of the discussion among both the government and industry panelists focused on contract duplication. As outlined by Bloomberg Government, the number of multiple award IDIQ contracts has grown from 437 in 2006 to at least 1182 in 2012. This growth in contract duplication is unsustainable for government and industry, and as emphasized by the panelists, ultimately increases costs to the taxpayer.

Finally, also on July 18th, Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs, posted a blog on OMBlog asking the public for feedback on the Administration’s regulatory review initiative. This initiative is pursuant to the President’s Executive Order 13,563, Improving Regulation and Regulatory Review. In the blog, Administrator Sunstein wrote the following:

To improve our review and make it as ambitious as possible, we are announcing today, an opportunity for members of the public to offer their ideas. Which rules are outdated? Which ones are imposing unjustified costs? Which ones can be improved or made more effective? Submit your ideas at They will be given careful consideration.

In the spirit of Administrator Sunstein’s request, the Comment of the Week provides the following recommendations for a more efficient and effective procurement system:

  • Reduce contract duplication. As evidenced by the Bloomberg Government analysis, the growth in multiple award contracts (MACs)for the same or similar services and/or products is out of control. Each time a solicitation for a multiple award contract is issued, it means government and industry spend increasingly scarce bid and proposals and administrative funds to compete for, evaluate, and manage new contracts. These costs ultimately are passed on to the taxpayer through higher overall contract costs and/or prices. One approach might be to leverage the existing multiple award schedules to supplement and/or support MAC opportunities. Certainly, this idea and others should be explored, but we should not wait. As one erudite panelist noted, we collectively can no longer afford it!
  • Improve the requirements development process. Improving requirements development immediately will increase competition, reduce costs, and improve outcomes for government, taxpayer and industry. Clear, sound government requirements and commitments create the real economic incentives for contractors to compete. Requirements development is critical to best value outcomes that save the taxpayer money. Too often there is a focus on form (process), even to the point of duplication, over substance (requirements). It is time to focus on the substance!
  • Put “commercial” back in commercial item contracting. Since the bipartisan enactment of the Federal Acquisition Streamlining Act of 1994, which authorized commercial item contracting, regulation creep and growth government-unique contract terms has diluted the efficiency and effectiveness of commercial item contracting. Costly, burdensome regulations and contract terms that limit the effectiveness and/or increase the costs of commercial item contracting should be eliminated to the maximum extent practicable. This effort includes a review of multiple award schedule terms and conditions. Consistent with the President’s Executive Order 13,563, it is time to re-energize commercial item contracting!
  • Address data reporting. Data is not a free good. In response to government data reporting requirements, contractors invest in systems and infrastructures to track, collect and report the mandated data. Too often, agencies and/or departments within agencies include unique and conflicting data reporting requirements in their contracts. As a result, contractors make multiple investments to address these differing requirements. Government and industry should work together to adopt efficient and effective reporting requirements to the extent the data is needed. This effort should be ground in standard commercial practice and assure that contractor reporting will not be required for data that is already in the government’s possession. Sound, efficient, and effective data requirements can be a win for government, taxpayers, and industry!

Over the coming weeks, we will continue to highlight each of these areas and the opportunity for fundamental improvements to our procurement system. Finally, perhaps it is time for a comprehensive Myth-Busters summit between government and industry on how we can collectively improve the efficiency and effectiveness of the procurement system. The Coalition is ready to host such an event.

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