3 disconnects roiling the government market

The Professional Services Council’s annual conference last month featured discussions and presentations on a wide array of issues and trends affecting this industry.

From cybersecurity to energy sustainability and green buying, from the future of homeland security to the fierce competition for resources in a fiscally constrained environment, from fostering innovation to emerging, yet sometimes conflicting, acquisition policies and practices, we covered a lot of ground. But reflecting on the substance of the conference, I am struck by three overarching disconnects that emerged.

First and foremost is the ongoing collision between what the government needs or wants, and how it buys. This was particularly evident in an excellent discussion on fostering innovation that featured the General Services Administration’s Dave McClure, Homeland Security Department CIO Richard Spires, and Peter Highnam from the Intelligence Advanced Research Projects Activity.

The clear disconnect here is between those seeking to drive innovation—as each of them are—and the “system’s” tendency to acquire solutions in an increasingly monochromatic, commoditized and low bid manner. A similar theme emerged, sometimes explicitly and sometimes implicitly, in other discussions as well, including a terrific exchange on key acquisition policies that featured four of the government’s top acquisition officials.

Second, and related, is the continuing disconnect between senior leadership and the front line. The misalignment between the leadership’s intentions and directions and how that has been interpreted in the field was highlighted by Office of Federal Procurement Policy Administrator Dan Gordon in his discussion of the resistance to, or ignorance of, Office of Management and Budget’s important myth busters campaign to foster better and more consistent communications between government and industry

It is also evident in the tendency of government activities, despite leadership guidance to the contrary, to default to fixed price contracts even when logic suggests it is the wrong contract type for the specific requirement (and to then manage them as if they are cost reimbursement contracts). This disconnect is also abundantly clear in the worrisome growth in the use of low price awards even when the government is buying complex services, where such a strategy is particularly risky and wrong.

Moreover, individually and together, each of these trends is directly linked to the ability of both the government and companies to drive innovation and optimize both performance and outcomes.

Finally, it is clear that a disconnect remains between industry and the government itself. On one level, this disconnect is a close cousin to the collision between what the government says it wants to buy and how it buys. For companies, it becomes a high risk guessing game of trying to determine if their customer really wants new and innovative ideas, a less costly modification to an existing program, or just reduced cost for the same deliverable.

But on a broader scale, it also speaks directly to our responsibilities as an industry and to the enormous pressures our government customers face.

Spires posed the issue directly, challenging the executives in the audience to not only be bold and candid, but also to ensure they are both fully attuned to what their customers face and that they are forces for forward progress. Looked at another way, as partners that are so closely joined—and will remain so—in executing the missions of the government, we have to be willing to look inward as well as externally as we chart a path forward.

None of these disconnects is new. In one form or another they have existed for many years. But in many ways they have become more acute, particularly as agency resources have become increasingly constrained. Some can be partially addressed through basic policy guidance but other elements require sustained leadership on both sides of the table.

Given the current fiscal and political environment, none of them can be ignored.