Have a (hot) seat

David Safavian jumps into fray as new head of federal procurement

David Safavian became head of the Office of Federal Procurement Policy in November.

Rick Steele

David Safavian became head of the Office of Federal Procurement Policy in November in one of the most heated climates in government. The job thrust him into the middle of such controversial issues as competitive sourcing and the recent spate of procurement problems at the General Services Administration, the Air Force and other agencies.

Safavian brings to the job an understanding of both public and private sectors, as well as of Congress. Before working at the Office of Management and Budget, he was chief of staff for GSA Administrator Stephen Perry and also worked for two congressmen.

His plans include making small changes to procurement policies and regulations, including the A-76 circular.

Safavian earned a bachelor's degree in political science from St. Louis University and a law degree from Michigan State University's Detroit College of Law. He also received a master's degree in tax law from Georgetown University. Safavian recently spoke with Jason Miller, senior writer at Washington Technology's sister publication, Government Computer News.

Miller: How is the health of the federal procurement system?

Safavian: Things are moving along adequately, but they can be improved. There have been some anomalies, such as the Air Force's procurement scandal involving Boeing Co. and Darleen Druyun, some of the issues going on at the General Services Administration and a couple of other agencies that are struggling.

Those, I believe, are anomalies, and you can't draw upon those to say the procurement system is a mess. Those are instances that highlight some of the weaknesses we might need to take a look at and fix. In fact, they are being fixed.

We must look, first and foremost, at the coming retirement boom in the next five years: Seventy percent of our senior executives are eligible for retirement, and 40 percent of midlevel managers are ready to retire. If we see the brain drain that a lot of people have talked about, we are in some real trouble. That is one of the challenges I have volunteered to take on.

Miller: What areas of procurement policy and regulation will the administration focus upon over the next year?

Safavian: The areas we will be looking at are the human capital strategies of the acquisition workforce, suspension and debarment. We will take a hard look at how the regulations work and the processes. My initial sense is they penalize small businesses, and they don't necessarily act as a deterrent for large ones. I want to talk to the members of the Interagency Suspension and Debarment Committee and get their take on where they think there is room for improvement.

Our emphasis on A-76 has not been reduced. The fact that we will look at other issues that are procurement related shouldn't be taken as a signal that we will back off A-76. As agencies continue to master the process, we are seeing a growing momentum for competitive sourcing. We do have some policy issues that have to be resolved, and I suspect we will have to look at ways to improve the circular.

Miller: What areas of A-76 do you think need to be improved?

Safavian: Congress got employee protest rights right. It strikes a good balance and provides a mechanism that valid protests have a pathway to be heard. But there is not a mechanism for anyone to throw protest after protest out there as a means of delay.

Sen. Joseph Leiberman's (D-Conn.) staff made a point of asking us to look at the overhead rate, which has been a pretty controversial area. The labor side thinks the overhead rate is too high, and the corporate side thinks the rate is too low. My sense is if both sides are complaining, than maybe we have something that is just about right, as arbitrary as that 12 percent rate is.

Miller: How will the administration continue to explain the benefits of A-76 to agencies and their unions?

Safavian: The more information out there, the better. You can attack our methodology, but it is pretty hard to attack the bottom-line cost savings for competitive sourcing that we identified in the 2003 report and that are validated in the upcoming 2004 report. In 2003, we saved net $1.1 billion as a result of our competitive-sourcing activities.

It is hard to argue that this is not generating efficiencies. In 2004, we had a greater savings rate, despite the fact we had fewer competitions. That tells us agencies are getting much better at running the competitions, using this as a regular management tool.

Unfortunately, this has become truly a polarizing issue. There are few competitions that our friends in the labor movement would ever support, and there are few areas where the private sector would not support a competition. My hope is to be able to have a working relationship with some of the union heads in this town. Now that I've been confirmed, I am free to reach out to them, and I intend to do so. They will never like competitive sourcing, but maybe we can address some of their concerns.

The fact of the matter is the in-house team wins nine of 10 competitions, so claims of unfairness don't necessarily resonate now. We need to make sure there are no systemic problems that are causing an unfair advantage for either side. If there are, we will take them on.

Miller: The administration has been very slow in finalizing the regulations for share in savings. What is the hold-up?

Safavian: It is a fair criticism. We have been slow in turning those regulations out. We met with [Virginia Republican Rep. Tom] Davis' staff and told them that the rule is ready to go, and the OFPP policy is ready to go out. We are doing some final checks and vetting, and we are aggressively looking for and encouraging agencies to use the share-in-savings authority.

The reason we haven't seen share in saving used is because they haven't had any guidance from us. If I were a senior procurement executive, no way would I use share in savings without guidance from OMB. Now that we will have the guidance out, we will strongly encourage agencies to use this authority and go back to the Hill for authority to be extended.

Miller: With all these complex procurements and the protests that have followed, is the Government Accountability Office expecting too much from federal agency contracting officers?

Safavian: A couple of factors are at work here. One is that the process by which we purchase is becoming increasingly technical, because of various requirements under the law, because of the complexity of products and services we are buying and the scope, because of the manpower crunch some agencies face with acquisition workforce.

As our transactions grow, competition in the private sector becomes fiercer by the day. And there is no incentive not to protest. My sense is that it is worth discussing [a plan] to bring some sort of parallel measure to what we have in the civil court system.

Should we be discussing whether, if a court or board or GAO finds that there is no valid basis for the protest, then the loser should pay? We need to identify ways to ensure as much as possible, that the people who are protesting have a valid claim rather than being people who feel like they lost the contract and might as well protest.

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