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Apr 30, 2007

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KSB (original)

Jeff Hamilton,

I just got around to your color commentary, with sexual extension, concerning this conversation. It seems it arouses you, and as you tag someone w the metrosexual label, perhaps we have found your desired frame of mind and body.

This stuff we are discussing isn't sexy, although the discussants might be--on their days off--but it is a crushing, boring set of subjects. The most excited we can get is saving the taxpayers money, while allowing corporations to make a decent, if not outrageous, profit. Doing both at the same time--call it partnering?--could be like a perfectly timed dual orgasm (figuratively, of course). Getting the system working right is just as improbable, especially in middle age.

There I go again.

Yours faithfully and richly,

KSB

KSBR

Ah, Connie. You bring back memories of earnest colleagues who have learned to hold their noses in the swill of "our industry." Sounds like you have a GPS locator on Steverino. If he left OFPP in 97 (10 years ago, n'est-ce pas?), I retained him about 3-4 years later, rather than 10 years ago. I had only met him once before in his office, on an unrelated policy matter. I'm no big fan of his, but I don't think he's crooked or unethical or stupid. He's just a bit pie-in-the-sky and suffers from not knowing what really motivates companies; he's never been in the belly of the beast. One can stump him w little questions, such as: How do you really think companies make money in this business, Steve?
One thing this thread needs to ponder is the mantra that comes from the trade associations, some but not all companies, and some government officials: insistence that the "system is not broken." I view that assertion as defensive and debateable--those who voice it fear some wholesale change. But we are faced with the fact that system looks adequate (if overly complex and slow) on paper, and it appears that only a small number of transactions seem to go bad. But that is an illusion--the government rarely gets a really good deal and rarely gets more than average performance from its contractors. And there's still not enough competition. Lockheed'[s recent disgraceful performance w the Coast Guard and Navy (LCS-3) is an obvious indicator.
We won't see big change under Bush, but we might under McCaine or Thompson (not Giuliani or Romney), and a lot from Hillary ("I will cut 500 thousand contractors") and Obama.
I enjoyed Friday morning hearing from a friend at a defense contractor who voiced near-panicked concern about McCain's comment in the debate that he would cut big money out of "defense acquisition" because there was so much waste in it.

Danielle

Wow. Jeff, you outdid yourself this time. Bottom line is POGO is doing its job if it gets people hot thinking about procurement issues.
Danielle

Jeff Hamiliton

Leave it to POGO to make government contracting hot. Actually, POGO has turned government procurement into a Shakespearian soap opera. Kelman is clearly either Darth Vader and/or King Richard. Both references might be giving him too much credit. He’s probably more like the Wizard of Oz. Pull that curtain of Harvard away from him and he’s short and naked. The IGs then are either the band of merry men or the rebels. They have good hearts, well intentioned, but they can only do what they can faced with such overwhelming odds. K Street Buddy Redux is that crazy scamp Chevy Chase, with his “Ah, Danielle there you go again,” you ignorant slut, comment. KSBR wants to be a good guy, but he can’t help but listen to his pants. Uh, around the back POGO, I mean his wallet. There’s a regular K Street Buddy too, but POGO Blog readers theorize he’s off smoking cigars and drinking single malt scotch. He might be the Smoking Man? Danielle has to be Fiona from Shrek. You know the scene where she kicks the bad guys butts Matrix style! Scott Amey is Danielle’s prim and proper metrosexual. Connie is a tough one. Her defense of Danielle is almost pornographic. Connie’s knowledge of procurement points to the GAO or CRS. She’s got to be a little OCD mixed with knee-high leather boots. What’s with the Effigy email address? Someone’s got a complex there. Can we talk this much about contracting and not mention Tom Davis? Defender of all things contractor. He’s kind of a preppy Jabba the Hut. Tom Davis has this Harvard connection too. What is it with that place? Harvard is a Death Star that just breeds greed and ego!

As we rapidly approach half a trillion dollars in government contracts this story, and its colorful cast is not going away soon. A76, CAS, 1423 Panel, Acquisition Reform and auditors have never been sexier. Stay tuned!

Connie the Contractor

KSBR -

Connie here. Danielle is right on all points, and you are correct on most. I agree that all-in-all, if you factor in both actions and dollars, it is not clear that contract specialists are any more overburdened that they ever were. I have a sneaky suspicion that those championing the need to hire a lot more contracting personnel are using it as an excuse to stave off more fundamental reforms to the procurement process. After all, what difference does it make how many traffic cops you hire if the speed limit is 500 MPH.

And yes, the 1423 Panel had both some very knowledgeable types and some very odd (and unknowledgeable) people who did not belong there. But, that’s politics.

I don’t think you are fair to criticize Danielle for not focusing on the program offices. POGO’s principal focus has been on the contracting process, i.e., how the govt buys, not the acquisition or program function, i.e., what to buy? No doubt many of the program and acquisition types have their problems, but that issue goes way beyond the contracting process.

BTW, I found you comment the other day about having hired Kelman as a consultant about ten years ago intriguing. It got me thinking about who you might be. His last day at OFPP was Sept. 12, 1997. He boarded a plane the next morning and went back to Boston (actually he had purchased a house in Lexington, MA.) I know he began to consult within a week or two after leaving govt, and I know or knew most of his clients. Hmmm. I’m sure we know one another.

Care to give more hints?

Connie

K Street Buddy Redux

Ah, Danielle, there you go again--largely in the right direction (meaning I agree with almost all your points)! The 1423 panel remains a debacle, including its secret, we-don-t-want-your-comments approach to the draft. It had week bros and sisters, like the former SBA deputy, and non-typical, to be polite "industry" people; it had the good sense to listen to industry outside of formal meetings and eventually make room for some testimony. All in all, the results are more tactical than strategic, and simply roll work forward to already overloaded people like Paul Denett. And it took two years. Shame on those people.
Re the workforce, you can't just look at the contracting officers and staff. The bulk are in the program offices. The KOs actually have a palatable workload--it is the actions, not the dollars, that you need to count. That hasn't changed much, especially w bundling and consolidation of vehicles, and a lot of the actions are much simpler. But leave it to the admin types to constantly complain. That said, the acq types in the PMOs never knew and haven't learned, in great numbers, how to make technical selections of contractors and to oversee them properly. That is why you have disaster after disaster involving our most "illustrious" contractors, like LockMart, NGIT, EDS, CSC. The list goes on and on. The industry doesn't step up to sharing risks w the customers, and secretl treasures every incompetent COTR that comes their way. And higher-ups are fat, dumb, and happy--they have no idea what kind of bag they are holding.
The most interesting comment in last night's Republican debate was when J. McCain said he would go hunting for dollars in the terribly wasteful "defense acquisition" arena. A big benefit to us taxpayers of him not running is giving him time to focus on saving us billions there. His run at FCS the year before last proves that he has the cohones to do it.
Yours truly,
KSBR

Danielle Brian

Davie –

POGO does not blame Steve Kelman for all the misdeeds of "acquisition reform" -- I even believe he started down this road with good intentions. But if there is a single individual who embodies what is wrong with government contracting these days, it would be Kelman, and the havoc he has created as a leading figure in the "acquisition reform" movement. I believe he is now largely scrambling to resuscitate his legacy.

I do think your history of the Section 800 Panel is a little off the mark. First, the Section 800 Panel was an industry invention. It was industry that lobbied to have the Panel created, mostly as a response to the oversight and real reforms (like CICA) that developed during the 1980s defense build-up. The Section 800 Panel was one-half government people, and one-half a combination of industry reps and private sector lawyers who consulted with or represented industry including Raytheon. And nearly all the government panelists ended up leaving the government and representing or consulting with contractors later.

You're right that many people did not see what was coming, but of course contractors and their allies used the Section 800 Panel to lobby for changes to the pro-taxpayer reforms of the 1980s. Since it was hard to lobby against competition and getting cost or pricing data, the contractors and their allies resorted to scare tactics, like making up stories that the government would not gain access to "cutting edge technologies" or that firms won't do business with government. What was ironic about these claims is that most of the scare tactics were employed by large government contractors who were heavily dependent on government work, and who would have the least interest in inviting "new entrants" into their lines of business. (One industry group even later called competition a “plague.”) For example, one of the "reforms" created was Other Transactions Authority (OTA), which was billed as a way to attract new "non-traditional" businesses to government contracts – those phantom businesses who would like to bid for government work, but who were put off by the red-tape required by contract oversight provisions. Not surprisingly, in reality OTA's however are primarily entered into with traditional contractors – Lockheed Martin, Boeing etc.

You are absolutely right about the Clinton "reinventing government types" taking the Section 800 Panel report and using it as their blueprint for a new procurement regime as part of the larger National Performance Review (NPR). You are also correct that there was a certain bipartisan aspect to it, proving that both sides of the aisle are not above promoting contractor interests. But what did you mean about learning "our lessons about low price?" Nothing required the government to buy from the low price vendor, so long as the evaluation factors for award were properly disclosed to all offerors. That was one of those red herrings spread among Hill staff to convince them that legislative changes were necessary. This was much like the claim that bid protests were slowing the contracting system down.

Now, concerning "oversight groups" wanting to reduce the size of government, I think you have POGO confused with the Clinton-Gore NPR team. It was the NPR team that proposed reducing the size of the civilian workforce by 250,000. And it was Kennedy School people like Elaine Kamarck and Steve Kelman who insisted that if the government could get rid of "overhead" personnel, like contracting people, that greater efficiencies could be achieved.

On the issue of the contracting workforce, POGO isn't necessarily opposed to increasing the size of the workforce, but neither are we favoring it until more research is done. The fact is that the GS-1102 contracting workforce grew enormously over a ten year period -- from approximately 19,000 in 1981 to about 33,000 in 1991 according to GSA's own Federal Acquisition Institute (FAI) reports. But this was during a period of a huge build-up in defense contracting. Then, from 1993 until 1999, the workforce shrank back to about 27,000, and it has remained there since, give or take a thousand. What's significant to consider is that the contracting workforce today is about the same size as it was in 1988, at the end of the enormous Reagan defense build-up. Whether more contracting personnel are needed in the current environment is difficult to say. What is not difficult to say is that training for contracting personnel has "gone to the dogs." Led by acquisition reformers, today's DAU/FAI curriculum is all about partnering and building effective relationships with vendors, rather than the previously taught "hard skills" like cost and price analysis, effective negotiation techniques, and the "nitty gritty" of government contract law and regulation. Remember "should-cost" analyses? Although it has become popular to talk about adoption of commercial practices in government contracting, what has really happened is that contract specialists have been forced to identify with contractors. Rather than employing true commercial purchasing practices, the government has adopted "faux commercial practices," (primarily purchasing practices favored by those selling to the government).

The 1423 Panel on which you served documented many of these "faux commercial practices" like overuse of T&M/LH contracts using so-called "commercial item" practices and the failure of the government to obtain cost or pricing data because the law now either prohibits it, or because it is just culturally discouraged. Davie, I understand that you and a few other government members of the 1423 Panel strongly objected to the Panel's findings in this area.

What POGO really would like to see is a return to the arms-length relationship that we once strived to achieve in government contracting. Perhaps the government wasn't always successful, but that was the goal. Now, the interests of the contractors and their trade associations (PSC, CSA, ITAA etc.) are what some procurement executives seem to champion.

That's too bad -- and it’s not a commercial practice for buyers to worry so much about sellers that they forget whose interests they represent.

Danielle

KStretBuddyRedux

Now, Connie, we shouldn't give Prof. K too much credit for the mess. But, I agree, he is a major contributor. And he likes to pontificate. Having used him a decade ago as a consultant, briefly, I was not impressed with the value of what he delivered.
You and Danielle are generally right. He's mostly wrong, but not completely. Some, especially younger, IGs, tend to be more political and some of what they do is "gotcha." The IG role needs more respect. I think all IGs really ought to report outside their agencies, even to OMB, because there is always tension, a la Doan, with the top dog.

The industry and its customers seem to be reeling from renewed scrutiny--Waxman, other members and committees of Congress, a more aggressive GAO, and yes, more aggressive IGs. Groups like POGO and TAF make their contributions, too. The mass media, with few exceptions, like the NYT, are trying to tune in on the industry, but their efforts are often riddled with errors--and that's true of the lapdog "trade press" that plies government contracting. Like Kelman, they never worked in the belly of the beast, and they miss a lot. You don't have to be in the industry, however, to see some gross rips of the taxpayers, such as a line of cutters that are unseaworthy. And there's no embarrassment or impairment of future business for delivering that garbage.

It's rare to hear, as I did this week, that Parsons is being considered for governmentwide debarment for its many failed projects in Iraq, my favorite being the police academy that leaks real crap into the classrooms and dorms. Speaking of Iraq, Stuart Bowman is a model IG, but then again, he is special.

Davie

Danielle:

Your assessment of "blame" for the acquisition reforms of the 90s is somewhat misplaced. The reforms were based, principally, upon the Section 800 Panel Report. The Section 800 Panel was not an industry body, but rather represented government, both the executive and legislative branch. It was sent to Congress at the end of the Bush 41 Administration. It would also be inaccurate to fail to give credit to Vice President's Gore's efforts to reinvent govnernment in terms of the momentum for adopting the Section 800 Panel Report and certain additional reforms.

The passage of those reforms in the 1990s was a true bi-partisan effort. The reason for those reforms wasn't to make contractors rich or to reduce oversight. The reasons for those reforms were to give the government timely access to the goods and services it needed at prices that represented best value. We had learend our lessons about low price. No one supporting the reforms understood that at the same time the workforce, that would have to administer them, would be reduced every year and that the reductions would be taken by not hiring and training new folks, leaving in the workforce folks who were neither trained nor had the comeptency, skills or tools to implement the new way of doing business - but that's what happened.

Why did this happen? It happened because oversight groups wanted to save money by reducing the size of government. So we reduced the size of government and in so doing we contracted out more work to the private sector. Of course we didn't hire folks in the contracting workforce when folks left and we didn't increase the size of the contracting officer workforce, so we had fewer people to administer more contracts. What's even worse, these new contracts were even more complicated than before, particularly those involving services. We weren't buying just grass cutting, we were buying program management and day to day operations that provided support to taxpayers in a host of social areas. Nothing wrong with doing that, but you have to manage those contracts for them to be successful and you can't manage them if your main focus is getting contracts awarded and there is no rtime left to manage a contract after you've awarded it.

If you want to take acquisition reform to task, then attack the root cause of today's problems, you've got fewer people doing more work without the competencies, skills or tools necessary to do the work to be done. It isn't the reforms or the reformers who created this problem, albeit we left contract adminisntration off the table and there is a lot of work to be done there. It is the folks who think that acquisition is free and doesn't need to be paid for that created the problems we have today.

You want to fix the problems we have today, hire fewer IGs to "shoot the wounded" and hire more contracting officers, fully fund them so that they can get the training they need to do the work and the tools, especially electronic tools, and then you'll find you don't need as many IGs and auditors. We always seem to have enough money to pay for the overseers, but never enough money to pay the folks who have to get the work done. You want to trumpet a cause? Get behind increasing the contracting workforce as a long term commitment, not a one time action.

Connie the Contractor

Danielle -

Unfortunately, your post is quite correct. Mr. Kelman, under the guise of being a Kennedy School “public management” professor has probably rained greater ruin on the integrity of the public contracting process than any other single individual. The “reforms” he championed were little more than a contractor “wish list” masquerading as “reinventing government.” Now that the “chickens are “coming home to roost,” Mr. Kelman attacks those who tell the truth – the IGs. What were you expecting? That the architect of the current contracting debacles will admit he was wrong? Don’t hold your breath.

Connie

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