Procurement Reform Ripples Through Industry

Procurement reform will take a giant leap forward when legislation that makes major changes in the government's information technology acquisition process takes effect early next month.

"What we have is a new environment... [that] allows the government to look at new ways of doing business," Milton Cooper, president of the systems group at Computer Sciences Corp., El Segundo, Calif., said in testimony prepared for the hearing before members of a Senate subcommittee that provides oversight of government management.

This new environment has caused NASA, the Department of Energy, the Department of Defense, the Health Care Financing Administration and others to consider performance-based contracting or outsourcing as a means to improve efficiency in their IT investments and operations, Cooper said.

ITMRA, which was signed into law by President Bill Clinton in February, will permit agencies to run their own procurements and dramatically change the IT oversight role of the General Services Administration.

ITMRA also eliminates the bid protest system through GSA and calls for the appointment of chief information officer positions within the government's agencies and departments to lend accountability for agency information technology management.

Cooper and other industry officials appeared at the hearing along with government officials to discuss the impact of the reforms.

Federal agencies will have much more latitude in how they do business under the new commercial procurement model, said Alan Hald, vice chairman of MicroAge Inc., Tempe, Ariz., and chairman of CompTIA public policy committee. CompTIA represents 6,300 microcomputer resellers, equipment and semiconductor manufacturers, software publishers, distributors, integrators and service and long distance companies.

Agencies can get better service and prices if they use this latitude to act "as would a private firm shopping the commercial marketplace for information technology solutions," Hald said. "The larger integrators may grab a larger share of the market because they have the marketing resources in place to work closely with agencies," said Bob Dornan, vice president of Federal Sources Inc., McLean, Va.

"We are hopeful that CIOs will be akin to their commercial counterparts in accomplishing their mission of effectively and efficiently acquiring and managing agency technology resources," said Hald.

But no one is ready to light cigars just yet. "The federal government continues to have a mixed record of integrating IT into its operations. Although it spent more than $25 billion in 1995 on information technology, the federal government has lacked consistently effective leadership and organization required to assure that it makes the most of these resources," said John Koskinen, deputy director for management at the Office of Management and Budget.

GSA's Joe Thompson, chairman of the chief information officers working group, told lawmakers that more than 80 senior IT executives from 28 departments and independent agencies have joined together in a federal chief information officer working group to implement the CIO concept across the government. That working group, he said, includes others called to testify before the subcommittee, including OMB's Koskinen, Chris Hoenig and Dave McClure from GAO, Emmet Paige, assistant secretary of defense, and Steve Yohai, the CIO of Housing and Urban Development.

"The focus of the CIO is on technology investments: the selection, planning and control of large technology acquisitions and the applications of technology to improve service to customers, reduce costs and increase productivity," Thompson said.

Industry officials generally agree that the reforms will help the government catch up with commercial practices.

"The focus has shifted away from process to results," said Steven Smith, managing partner of federal government practice at Andersen Consulting, Chicago, in a telephone interview following his testimony.

"Before the reform, promises were more important than hard facts. Now we monitor expenses with greater scrutiny and realization of benefits after projects," he said.

Horror stories of procurement of outdated products, which at times took up to two years, are a thing of the past, Smith said.

"It's long-overdue reform. The government is now picking up the best commercial practices," said Steve Carrier, vice president of business development at Northrop Grumman Corp.