A better way to measure competition
Buylines | Policies, strategies and trends to watch
- By Steve Charles
- Aug 21, 2008
Acquisition policy-makers all seem to agree that acquisition planning is the key activity required to make wise procurement decisions, yet the system doesn't measure this activity. Rather, it appears that the more thoroughly it is done - at least for the purchase of technology - the less likely the procurement will be categorized as competitive.
Let's suppose the program people at a customer agency did a thorough job of analyzing and pricing several different technologies and options over the course of 18 months. Various manufacturers had competed hard during this period to show that their technology was the best value. The planners determined what would work best and sent a purchase request with the acquisition package complete with a funding certification to the contracting office. The contracting office returned it a month later stating that an "other-than-full-and-open-competition" justification was needed because brand name items were requested. Writing the justification wasn't hard, but that action instantly classified the procurement as noncompetitive and, as it was larger than $550,000, required sign-off by the competition advocate, who had his own ideas of how the competitive analysis should have been performed.
Was there any point to the program staff's careful acquisition planning when it was summarily dismissed because the contracting office had arrived at a best value recommendation?
I thought of such a scenario when I saw the July 18 memo from the Office of Federal Procurement Policy to chief acquisition officers and senior procurement executives about the need to increase the number of competitive procurements. It seems the system has been stuck for years at the lackluster competition rate of 64 percent of the outlay, so the OFPP is calling for an interagency working group of chief acquisition officers to find ways to nudge the numbers skyward.
I suggest giving competition credit to those program managers who actually do acquisition planning. Stop penalizing them when they figure out a solution by requiring limited or sole-source justifications when their analysis clearly indicates the best path.
The example described involved using the GSA schedule contract ordering procedures, which require that orders for information technology items be preceded by an acquisition plan (Federal Acquisition Regulation Part 7) and a market survey (FAR Part 10) consistent with the agency's IT Strategic Plan (FAR Part 39). When these activities are performed, there is an abundance of meaningful competition during which each manufacturer seeks to prove that it offers the best value. During this sales process, it usually becomes quite apparent which product is best for a particular situation, and everyone knows it.
But then the purchase request goes to the contracting office, and another process begins that seems to ignore all the substantive analysis done beforehand. I'm not sure if this is because contracting officers don't receive proof of this analysis or if they don't understand what they are reading. Regardless, every day we have contracting officers construing the results of planning as sole-source requests, forever classifying the resultant orders as noncompetitive procurements. Industry tends to go along doing whatever it takes to get the order, including orchestrating three competing quotes for the same item even though three quotes for the same item is not considered competitive according to FAR 805-6(a)(2).
Here's an opportunity for the General Services Administration Multiple Award Schedule Advisory Panel to take a leadership role in conjunction with the new Chief Acquisition Officers Interagency Competition Working Group. Let's encourage contracting officers to trust acquisition plans that consider multiple brands as the basis for a best value determination so they can place orders for the technology that offers the best value consistent with FAR 805-1(c)(1). Multiple brands must be considered because checking three schedules for the same item is not competitive according to FAR 805-6(a)(2). The clause that must be deleted is FAR 8.405-6(2) requiring justification if an order references a particular brand. All orders have to be brand specific unless the order is for corn or soybeans.
Let's recognize that meaningful competition occurs long before an order is placed. All we need to do is measure competition where it really occurs, at the acquisition planning and market research stages, so our contracting officers can place orders accordingly. Everyone wins this way. If GSA was clear about this process across all its schedules, agencies would regain confidence in using schedules, better acquisition planning would occur, and we would move the competition average up 10 points.Steve Charles (firstname.lastname@example.org) is co-founder of the consulting firm immixGroup Inc.
Steve Charles is a co-founder of immixGroup, which helps technology companies do business with government. He is a frequent speaker and lecturer on technology and the federal procurement process. He can be reached at Steve_Charles@immixgroup.com or connect with him on LinkedIn at www.linkedin.com/in/stcharles.