What Agency Leaders Need to Know About Federal Acquisition

This article was originally posted by Michael Keegan on the IBM Center for the Business of Government Blog.

Most agencies in the U.S. government rely on products—goods and services—acquired through contracts to perform core functions, pursue agency objectives, and achieve mission success. In FY12, the federal government acquired $517 billion worth of products through contracts. Contract expenditures amount to 16 percent of total federal spending. Purchases range from simple products, like office supplies or landscaping, to much more complex prod­ucts, like advanced weapons systems and program management services.

Because of the critical role that contracts play for over $500 billion in federal spending, government executives who understand the basics of the procurement system will be much more adept at leveraging that system to fulfill their objectives than those who simply rely on technical experts. Knowing the rules of the road for acquiring goods and services can mean the differ­ence between mission achievement and mission failure; this is especially true in the area of information technology, where some 80% of government spending is estimated to come from private-sector engagement.In short, acquisition can be a strategic enabler for government executives, or it can lead to significant problems in program cost, schedule, and performance goals.

A Guide for Agency Leaders on Federal Acquisition: Major Challenges Facing Government, by Trevor L.Brown, The Ohio State University provides government executives with a roadmap for understanding how best to proceed when interacting with a critically important element of government management -- federal procurement!

Generally, political overseers and agency leaders themselves focus on acquisition usually when things go wrong. That’s too late. A primary purpose of this report is to highlight the importance of acquisition in pursuit of agency objectives and educate agency leaders about how the acquisi­tion process takes place. This report provides:

  • An overview of the regulatory and oversight architecture that governs acquisition practice,
  • As well as the acquisition process during the pre-award and award phases—from the decision to buy rather than make a product, to the selection of a vendor, and on through the design of the contract to govern the exchange

It also provides answers to eight key questions facing every federal agency leaders around the federal acquisition process. These questions include: Why do federal agencies contract for goods and services? What is the overarching goal for any purchase? What are the three basic phases of the federal acquisition life cycle?

At first blush, these questions may seem very basic, but that's because this report is not designed for acquisition personnel, who are already experts on the finer points of purchasing. Instead, it is designed for those managing agencies and programs that rely on purchased products to fulfill agency missions and objectives. For some of these agen­cies, strategically managing acquisition is as important as managing human, technological, or financial resources. The intent here is to familiarize agency leaders and directors with the fed­eral acquisition process so they can manage their agencies and programs effectively. It does this by presenting:

  • Information on the pattern and composition of federal contract spending
  • What federal agency leaders need to know about the key aspects of federal acquisition
  • Acquisition challenges facing agency leaders
  • Strategies to overcome these challenges

The Brown report continues the IBM Center’s long interest in the federal procurement process. The Center recently published Controlling Federal Spending by Managing the Long Tail of Procurement by David Wyld. In that report, Professor Wyld describes “tail spend,” which is procurement outlays that are outside of an organization’s core spending and core supplier groups, covering many miscellaneous expenditure categories.

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