Contract management becomes top priority for White House

Dan Gordon, administrator of the Office of Federal Procurement Policy, issued a stern warning last week to a contracting community that has been too tolerant of poor performance in the past.

“Contract management is front and center—front and center—in our focus,” Gordon said Dec. 10 during a panel discussion on procurement reforms. Gordon and the Obama administration intend to root out negligent behavior in government acquisition by having agencies better manage the contracts they award.

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“We have got to stop situations where everybody knows that there are sham arrangements going on out there, but no one pays attention. We’re paying attention,” Gordon said.

He was referring to the Small Business Administration’s decision in October to suspend GTSI Corp. for alleged fraud, which, for many people, was one of the biggest news stories of 2010. GTSI was accused of using two small-business prime contractors as a front to funnel itself work and revenue from a contract set aside just for small businesses. GTSI was a subcontractor to the two small businesses on that contract. In November, SBA officials also suspended EG Solutions and MultimaxArray FirstSource, the two small businesses involved. GTSI has since been reinstated as a contractor and the two other companies are still suspended.

“We are taking this seriously, folks,” Gordon said.

Gordon’s push for better contract management after the award is a change from the last decade. Back in the 1990s, officials were analyzing the award process. They were considering how to judge evaluation criteria and past performance history, as well as get a good competition for a contract.

Now though, Gordon said, agencies have to keep tabs on their contracts once they’re awarded. By doing that, agencies should get what they pay for and be able to correct the course if work takes an unintended direction. Gordon said agencies need to pay close attention to the phases where they plan a procurement and define its requirements, but he went so far as to say the post-award management is more important than the planning and the defined requirements.

“The days when no one pays attention to what contractors do after we’ve made the award are over,” Gordon said.

This fundamental shift in focus has become critical because the government is contracting out more services than it is buying products nowadays, said Steve Schooner, a law professor at George Washington University and former associate administrator for procurement law and legislation at OFPP, who was on the panel with Gordon.

“I cannot tell you how important it is to hear the administrator for federal procurement policy talk about the importance of contract management," he said.

Schooner said Gordon’s leadership on better management and more contact between industry and government will be as beneficial to contractors as it is to agencies. Contractors often don’t feel like agency officials can talk with them and that they have no one to call if there’s an issue.

Buying services is much more complex than purchasing products, which further complicates the relationship between the contractor and the agency if two sides don't communicate, he said.

“You wouldn’t have renovations done in your home and not visit the site,” Schooner said.

In the end, management and communication between the two sides will make for a more successful relationship, he said.