Lee: Agency Inventories To Open Outsourcing Dialogue

Lee: Agency Inventories To Open Outsourcing Dialog<@VM>The Role and Reviews

Deidre Lee

By Nick Wakeman, Staff Writer



A White House procurement official said that information technology companies will soon get their first peek at inventories compiled by U.S. agencies of activities that are not deemed inherently governmental, offering a potential treasure trove of new opportunities for the private sector.

A notice will be published in the Federal Register by October that the first group of inventories is available, Deidre Lee, the administrator for Federal Procurement Policy at the Office of Management and Budget, told Washington Technology.

Lee said her office is still reviewing some of the inventories submitted by agencies in accordance with the Federal Activities Inventory Reform Act of 1998, which required agencies to provide a list of activities they perform that are not inherently governmental.

"Because it is the first time some people have done [inventories] and there are specific requirements, we have had to talk to some agencies and send the inventories back. But we are moving right along," Lee said.

Industry officials are hopeful that the inventories will lead to more outsourcing projects. In an interview, Lee said that she would only be speculating on that point. "But I think it opens up the dialogue," she said.

The inventories will serve as a useful management tool for agencies throughout government and will help officials question and explain why certain activities are being performed by an agency, she said.

Under the law, the OMB publishes a notice of availability and then the agencies must be ready to release the inventories as requested. Once the list is released, she said, "the agencies need to be up and ready when an inquiry comes in so they can promptly give out the inventory. And if an appeal comes in, they are ready to handle it."

If agency officials deemed work not inherently governmental, those activities will be opened up to competition. Said Lee: "If you decide it can possibly be done by the private sector, you do compete it. And you do a public-private competition. There is also a procedure where the government itself can compete for that work. That's the A-76 piece," she said.

Other items high on Lee's agenda include performance-based contracting, improved training and electronic commerce. "We have some great pieces of legislation and we have a lot of flexibility, but we haven't really implemented all of it as fully as we can," said Lee, who leads the Clinton administration's effort to execute sweeping procurement reforms enacted by Congress several years ago. Lee, who was confirmed in July 1998 by the U.S. Senate for the post of administrator, called training or work force issues the keystone of her implementation strategy. "I say work force, because it is not just the contracting folks." According to Lee, those who need more training and tools to develop and manage contracts better in the changed procurement environment include the end user, the person or office that has the requirements, and procurement officials.

Those reforms included the Federal Acquisition Streamlining Act, which was passed in 1994, and the Federal Acquisition Reform Act and the Information Technology Management Reform Act, also known as the Clinger-Cohen Act, which were passed in 1996.

The reforms were designed to make it simpler for the government to buy commercial products and services, made past performance a key selection criterion of contracts, simplified the process for small purchases and helped usher in performance-based contracts.

One cultural change Lee would like to see is for agency officials to quit dictating how a service is to be delivered. "Instead of saying, 'I'm going to hire 800 engineers and I'll determine every day what they will do,' you say, 'I need a functional information system and it has to deliver a certain capability to 500 people.'"

But changing the way a contract is developed and structured is only part of the solution. Government officials also must find new ways to manage contracts, especially performance-based contracts.

Lee admitted that this shift "is a very big change and it is not going to happen overnight. People have to feel comfortable with it and people have to learn the new tools and techniques."

The Department of Defense "does a good job at this" but civilian agencies "don't do it as much." The emphasis must be on the product or service that is being delivered and how best to structure a contract to meet that result, she said.

"What we are really looking for is great performance that supports the agency's mission, and what we want our work force to do is figure out the best business arrangement. And that is a change in the way people have traditionally looked at contracting," she said.

In the area of electronic commerce, Lee wants to move beyond just posting proposals on the Internet and allow for the receipt of proposals and online negotiations. Another important component is electronic payments, she said.

"Security and authenticity are issues because if you get proposals over the Web, how do you really know who that is," she said. "With [electronic] payments there also are backroom issues involving the data we have to collect. So you have to incorporate the payment into the collection of the appropriate data to make an electronic transaction."

Lee said she expects to see more pilot programs before a full-fledged electronic procurement system is rolled out. "Several are being tested and we are going to get there. We are going to complete the circle," she said. By Nick Wakeman



Deidre Lee, who served as associate administrator for procurement at NASA before becoming administrator for federal procurement policy, has won praise for her role in advancing the procurement reform process.

Lee, who replaced Steve Kelman, administrator of OFPP from 1993 to 1997, provides a critical leadership position in implementing the procurement initiatives, industry and government officials said.

"The issue now isn't new laws but making appropriate use of the laws we have," said J. Patrick Ways, who heads civilian government business development for systems integrator Computer Sciences Corp. of El Segundo, Calif.

Performance-based contracting is a significant and important evolutionary step in government contracting, said Ed Hogan, vice president of marketing for Unisys Federal of McLean, Va.

"This is a continuation away from awarding just to the low bidder. It allows the government to go back to the contractor with a good track record of performance," said Hogan.

The training agenda Lee has put forth "is really going to help advance procurement initiatives," said Stephen Rohleder, managing partner for Andersen Consulting's government practice in Washington. "Training is absolutely necessary to help support the procurement staffs."

"Dee deserves a lot of credit for taking on the difficult challenges of implementing procurement reform," said Alan Balutis, deputy chief information officer at the Department of Commerce. Too many people think when laws are passed, the work is done, he said, but "someone has to do the dirty, difficult job of making the intent of those laws come to fruition."

Lee's background gives her a lot of credibility with the procurement shops around government, said Robert Welch, a procurement executive with the Commerce Department. "She came up through the ranks," said Welch.

Prior to taking the top procurement post at NASA, Lee served in a number of procurement-related jobs at both the space agency and the Department of Defense.

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