Federal Procurement Update: A Meeting of the Contracting Minds

This morning OFPP Administrator Daniel Gordon and George Washington University Professor Steven Schooner spoke at a contracting meeting entitled “Federal Procurement Update.” Moderator Gail Bassin of JBS International presided. I attend many such conferences and meetings to learn about the practical realities of how our government spends over half a trillion dollars on goods and services each year, and to get inside knowledge about the burden placed on contractors.

Today’s panel discussion focused on budgets, in-sourcing and inherently governmental functions, risks shifting to contractors, bid protests, and the need, or lack thereof, for contracting reform.

No one promoted a contracting revolution at today's panel discussion, but one concept reigned: getting it right. The problem is we have a system that is complex, a system that can be political, a system that is catching up with personnel deficiencies, a system that shifted to IT and services, and a system that went through a dramatic increase in federal contract spending. The question is, can we get it right if the system is sometimes wrong?

Here are some of the highlights from the discussion, which I won’t attribute (but those of you who have attended some of these sessions will be able to identify the speaker), for those who didn’t attend, were sleeping, or emailing home about getting the kids off to school and inquiring about what’s for dinner. 

Budgets

• Budgets are shrinking and the government and Department of Defense (DoD) will look to save money by ceasing buying or buying less.
• We need more efficient spending.
• FY 2010 looks to mirror the contract spending in FY 2009 (which was about $539 billion), which is the first time spending has been flat in 12 or more years.
• Spending increases are largely due to the growth of service contracts.

In-sourcing & Inherently Governmental Functions

• In-sourcing isn’t a goal; it’s a re-balancing because contractors were controlling aspects of the government, including procurement shops.
• Hiring 1102s has increased by 10%.
• The government needs the capacity to manage government work.
• Critical functions need to be controlled by government employees, but that’s not to say contractors can’t perform critical functions, including support operations.
• The draft policy on work reserved for federal employees is expected in early 2011.

Risk-Shifting

• Need to be fiscally responsible and buy less and buy smarter.
• Fixed price contracts should be the default when it makes sense.
• Acquisition officials need to work with contractors and need to talk and listen to the industry before and after the award of a contract.
• Interagency contracting can be a good thing providing good prices, excellent customer satisfaction, and return to the government.
• Time-and-material contracts are useful, but the government needs to figure out how to use them. 

Bid Protests

• Protests are up, but nowhere near the peak in the 1990s when there were 3,300.
• The number and trend of protests isn’t troubling considering the money being spent on contracts these days.
• Protesting is a classic form of third-party oversight without hiring more staff, managers, auditors, and Inspectors General.
• The bid protest system is transparent and we can learn lessons from the Government Accountability Office (GAO) and the courts.
• Good debriefings are the key to lowering the number of bid protests. Tell people why they lost.
• GAO only sustained on average 70 protests a year, which isn’t a lot.
• Contracting can’t be bid protest-proof. 

Contracting Reform

• No new regulations or statutes are needed.
• The contracting system has flexibility, but we need to use it.
• We need integrated teams, better acquisition planning, awards, and administration.
• We need relentless focus.
• We need more communications with the contractors.
• We need short-term deliverable to fix problems before we’re too far down the road.
• Metrics often include budgets, costs, and delivery dates, but we should be asking if the agency meet its mission and look at the value provided by the goods or services.

-- Scott Amey

Photo by POGO's Scott Amey

Comments

[Balto. Miracle]

Er, thanks Scott. We could have done without the snide comments about other attendees or the claim this content was somehow "inside" info. You should know (right?) that most of these observations have been made by others and made for years. Virtually nothing new except some updated factoids.

Gordon and Schooner could be crusaders for reform. But they, like 50-75 other personages in town, are part of the very closed loop that has effected startlingly little change in the face of glaring, taxpayer-beating problems for years.

Tell us when you have something new to say or some real progress to report. Don't bother with more "how to think about the problem" stuff.