Politicizing Procurement

Administration officials are pushing a new wave of procurement initiatives designed to ease contract awards, reward past performance and minimize legal costs, said Steven Kelman, director of the Office of Federal Procurement Policy.

Among the White House initiatives: a prescription to streamline "performance-based contracting" policies, said Kelman, whose office is part of President Clinton's Office of Management and Budget.

Another initiative created a $2.5 billion pilot program that would allow procurement officials to examine bidders' performance on previous contracts, he said at a Sept. 14 meeting hosted by the Association of Small Research, Engineering and Financial Services Companies, Severna Park, Md.

Kelman's new initiatives are being prepared as procurement officials work to implement the sweeping procurement-reform law passed by Congress Sept. 19 -- better known as the Federal Acquisition Streamlining Act. The act, awaiting Clinton's signature, lifts cumbersome regulations on many smaller-scale contracts and creates a federal acquisition computer network.

A White House ceremony intended to wrap it all together is set for Oct. 3, with Vice President Al Gore to take center stage, said Kelman. The new reform wave is intended to boost agencies' use of Requests For Proposals that describe the general goals of each contract, instead of stringent technical requirements.

Such "performance-based contracting" would reduce legal disputes and allow service firms to offer innovative ideas, Kelman said. So far, 26 agencies have signed up to launch a total of 85 performance-based contracts, said Kelman. The contracts will be small, and will include many valued at less than $100,000, he said.

Julie Noufer, vice president for government relations at the Professional Services Council, Vienna, Va., welcomed the initiative. Instead of dictating a technical answer, agencies will ask for "a solution to a problem ... based on results, rather than time or level of effort," she said.

The White House ceremony is part of Kelman's efforts to convince procurement officials that initiatives will benefit them, said Noufer. "Rather than making the agencies act this way, they'll want to act this way because they will see the benefits," she said.

A second initiative, announced in January, seeks to boot use of past performance reviews. A total of 65 contracts worth a total of $2.5 billion have been selected for the initiative's pilot program, which "is nothing but common sense," said Kelman.

The past-performance plan is partially intended to allow new companies to enter the federal marketplace, he said. For example, the guide will allow companies to cite their successes in commercial contracts when seeking government awards, Kelman said. To guide government procurement officials, Kelman said his office will release a policy document by November that describes how past-performance reviews should be conducted.

A third initiative being pushed by Kelman calls for use of alternative dispute-resolution methods, aimed at reducing the incidence of lawsuits.