The Lectern

Steve Kelman


By Steve Kelman

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Government employment still appeals

The New York Times recently ran a big advertising supplement by a company called Universum, which does surveys of college students in various countries to ask them about their idea of an ideal place to work. This year, Universum – based in Sweden -- did its first survey among US college students, surveying almost 62,000 undergraduates at 362 colleges. The result of the effort was list of the top 100 employers, as the students see it, in the categories of business, engineering, IT and natural sciences.
From the perspective of people worried about the ability of government to attract young people, the news was much better than I would have ever expected.
Let's start with two amazing results. NASA came in first place on the list of top employers for engineers, ahead of number 2-ranked Google. (Google was ranked number 1 for business jobs.)  And the National Institutes of Health came in first place for natural science jobs, ahead of number 2-ranked Mayo Clinic.
In general, a select group of government agencies did extremely well in these rankings. Government agencies had nine of the top 100 for jobs in business (this seems to be a catch-all category -- the highest-ranking government agency here was the FBI, number 8), 13 of the top 100 for engineering jobs (following first-ranked NASA were the Department of Energy at 8, the Environmental Protection Agency at 14, and the FBI at 17), 14 of the top 100 for natural science jobs (following first-ranked NIH were the Centers for Disease Control at 4, the Peace Corps at 6, EPA at 7, and NASA at 8). Of especial interest perhaps to readers of this blog, government had 16 of the top 100 for IT jobs -- with NASA (ranked 10th), NSA, CIA, DOD, the State Department, and the Air Force all ranking higher as IT employers than, say, the IT consulting firm Accenture (ranked 38).
It is very possible that, in these insecure economic times, the security of a government job looms heavily in the minds of many students -- although of course this may become an obsolete impression as budget cuts start to take effect. It is also of course true that the agencies to which students are attracted are the more glamorous parts of government. And, of course, given the dysfunctional hiring system, there's a big gap between interest and actually being able to land a job.
But, glass-half-full guy that I am, I prefer to concentrate on the good news. In this era of government-bashing, there are still a fair number of agencies that get amazingly high marks from students. That's good raw material to work with. Our responsibilities in government are, I think, two. One is to improve the hiring system to give these kids a chance to get jobs before they are scooped up by the many private businesses on these top-100 lists. The second is to give new hires interesting work -- significant responsibilities, a chance to learn (including making mistakes), and mentoring -- so government can not just recruit but also retain them.

Posted on Dec 05, 2011 at 7:27 PM5 comments

Steve Kelman, broken record: More on contracting cost savings

Yes, I know I have been writing and talking about this for a long time, but this really is serious. Really tight budgets are on their way, contracting should and will be asked to help out, and helping out reflects the pennypinching, deal-seeking features of the contracting culture.  (I mean this as a compliment.)
I participated in a panel on this topic at the recent National Contract Management Association government conference, and want to share the ideas I shared with the overflow crowd there. Since people have different levels of tolerance for being the first on your block to try something new, I am listing them in order from "nobody's ever done this before" all the way to "this is so old it is getting new again."
The "nobody's even done this before" idea is for the government to ask potential bidders on a contract during a draft request for proposals stage, before the contract (or task order) goes out for bid, to suggest ways the government could tweak the requirements to save significant money for little or no performance decrement -- and then to reward any bidders whose ideas are adopted in the final RFP with some number of evaluation points for each idea accepted. I discuss this idea in greater detail in an FCW column I just published.
Moving to ideas that a few have tried but haven't really taken off yet, I have two. One will be of no surprise to anybody who has followed my preaching on this for years -- look for opportunities for share-in-savings contracting, where a contractor is paid, all or in part, in the form of a share of the savings their effort generates. Needless to say, in a tight budget environment, this becomes even more attractive.

There are two things to keep in mind though. One is that a big barrier to these contracts has been the first-year funding of fees the government would need to pay the contractor if the contract is cancelled -- this is a big budget hit many agencies have not been willing to take. However, I believe that contractors may be willing to accept only nominal termination liabilities as long as their ownership of the intellectual property of the contract is clear. If they own the intellectual property and therefore if benefit realization will stop if the contract is terminated, it would be stupid for the government to terminate a successful contract. On the other hand, if the contract is unsuccessful, the contractor won't care if it is terminated (indeed, may prefer termination).

Secondly, this contracting method should be used in cases where genuine savings will be generated, not merely as a way to convert upfront capital costs into a water torture of long-lived annual operating costs that may not be a good deal for the government.
A second idea is using reverse auctions for the labor hour rate parts of complex RFP's, which a few agencies have tried. (Full disclosure:  I am on the Board of Advisors of Fedbid, a provider of reverse auction services to the government.) We would never want to subject complex jobs as a whole to a reverse auction process, because the government needs to evaluate quality. But the government can conduct a reverse auction where bidders bid discounts off their established GSA labor hour rates, as a way to establish the final price/cost bids for companies competing on a contract. These labor rates would then go into the evaluation process.

(Note that I am not saying the government should necessarily buy from the low bidder -- the government may well choose to buy from Quality Vendor, who has reduced their average labor hour price from $150 an hour to $120 an hour, over Body Shop Vendor, who has reduced it from $60 to $50. The point of the auction is to get the best deal possible at each price point.)

Moving to something that has now been used enough to be seen as at the cutting edge of mainstream, we should also see procurement contests -- usually seen as a way to encourage innovation -- as a cost-savings approach as well.  From a cost-savings perspective, contests have the virtue that they pay only for success. If nobody solves the government's problem, nothing is paid out. It may be that the government will need to pay more to a winner (that is, the prize amount will need to be larger) than in a conventional procurement, where you often get paid even for non-success, but you won't have to pay for failure. Furthermore, according to the CEO of, which is the leading private-sector site for these contests, government contests that are linked to the public good often don't need to pay as much as similar contests from companies, because public-spirited innovators will work for less money.
Finally, in the "this is so old that it is new again" category -- for the truly risk-averse among us -- I recommend value engineering. This is a hoary technique, enshrined in the Federal Acquisition Regulation (Part 52), involves a contractor during contract performance making change proposals to the government to amend the specifications or something else in the contract in order to save money. The contractor and the government share any resultant savings. This can be used in construction, IT development, or other areas. When I presented this idea at the panel, Debra Sonderman, senior procurement executive of the Interior department, noted that last year Interior saved $100 million on a $1 billion construction budget with value engineering.
Remember that these are just examples!  Contracting folks, think up your own too.
PS. If any younger reader doesn't know what it means to sound like a broken record, ask your parents, a professor, or an older colleague. :p

Posted on Nov 28, 2011 at 7:27 PM12 comments

Putting clarity into contracting

It is widely known that one reason contracts go south is that the government meant one thing when it wrote the contract requirements, and contractors interpret what the government wrote as meaning something else. Out of these differences of understanding grow bad blood, disputes, and lots of money down the drain.

Occasionally, the "misunderstandings" aren't really misunderstandings at all, and reflect an effort by the contractor to exploit ambiguous language to its own benefit. More often, however, the problem is simply that the language was not clear enough, and that the government honestly meant one thing, while the contractor honestly thought the government meant another.
In a panel in which I participated at the recent National Contract Management Association Wasington conference, Claire Grady, the Senior Procurement Executive at the Coast Guard, discussed a fascinating effort at the Coast Guard to deal with this, called a "customer advocacy team." (The customers in question here are the program offices buying the goods and services about which the requirements have been written). The team consists of program people whose job it is to translate what the customer wants into RFP (or contract change order) language that industry will be able to understand. So the job is being done by people who have the perspective of a program office, but communications skills that engineers in program offices often lack.
Grady's presentation was part of a panel at the conference on achieving cost savings in contracting. At the risk of sounding like a broken record -- (do younger blog readers know this expression, or am I pathetically dating myself?) -- this is going to be one of the central jobs of contracting professionals for the foreseeable future.

I am going to be writing over the next few weeks two columns for Federal Computer Week expanding on some of the ideas for how contracting professionals can help. I should say in advance, however, that ideas shouldn't just be the province of Claire or Steve or whomever. Every contracting professional should challenge himself or herself to think of at least one way the government can get a better deal on at least one contract (or task/delivery order) in which you are going to be involved over the next few months, and keep repeating that challenge.

Posted on Nov 18, 2011 at 7:27 PM4 comments

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