Stan Soloway


Acquisition efforts on a collision course

Stark disconnect exists between legislative efforts, agency implementation

Rep. Darryl Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, will introduce this month the Federal Information Technology Acquisition Reform Act (FITARA), the first major IT reform legislation since the groundbreaking Clinger-Cohen Act of 1996.

Similarly, it is expected that Sen. Tom Carper, D-Del., chairman of the Homeland Security and Governmental Affairs Committee, will also introduce a significant IT acquisition reform bill.

While the two bills will have substantive differences, they will share a basic objective— fostering an IT acquisition capability in government that enables access to the best solutions at the best price, through an acquisition process that is founded in best commercial practices.

That is the right objective. But achieving that objective faces a huge, often ignored, hurdle. Even as the government seeks to gain access to the best technology solutions through the most diverse array of commercial providers, current acquisition policy and practice is actually headed in the opposite direction. 

For example, in the commercial world, companies distinguish between commodity IT and more complex requirements. They understand that one size does not fit all and when a product or service should be bought largely on the basis of price versus where the complexity demands a more rigorous, value-based, approach. 

At the Feb. 27 House hearing on FITARA, at which I had the privilege of testifying, both Chairman Issa and Ranking Member Elijah Cummings acknowledged this critical dichotomy. Yet, throughout the government, we are seeing just the opposite—a default to acquiring almost everything as if it were a commodity, including the overuse of lowest price, technically acceptable  (LPTA) acquisition strategies and an imbalanced emphasis on price at the expense of outcomes. 

We are also witnessing a worrisome growth in government-unique compliance requirements that are unknown and unnecessary in the commercial marketplace.

In  a commercial, fixed-price contract, would you allow, let alone expect, the customer to demand access to and question all of your cost details when you complete the required work and submit an invoice for the agreed upon price? Of course not.

But that is happening routinely across government today. And what about audits? At least two major companies  are considering dropping one or more of their GSA schedules because the General Services Administration is demanding audit access to the companies’ full book of commercial business, something that no commercial entity would ever tolerate—and which, even in the government marketplace, is contrary to established law and policy. 

Then there are the Defense Department’s repeated attempts to get statutory changes made to the definition of a "commercial item or service." Those changes would cause many commercial firms that only entered the government market after the acquisition reforms of the 1990s to quickly, and necessarily, exit.

In short, we have a collision of trends. Recognizing that the government must be able to access the full array of solutions, Congress is renewing its efforts to legislate smart, commercial-like behavior, while too many agency acquisition organizations and leaders are going the other way.

Dan Gordon, the immediate past administrator of the Office of Federal Procurement Policy, suggests this bias is in large part driven by years of the acquisition community being “beaten down.” Clearly, budget chaos is also playing a big role, as is fear of protests. But whatever the reason, if the goal of FITARA or Sen. Carper’s legislation is to truly adopt commercial best practices, this dominant and disturbing trend must be reversed.

In the end, it is as much a question of sustained agency leadership messaging and well constructed workforce development and training, as it is a question of new legislative authority. We need to objectively assess whether federal acquisition and technology leadership consistently communicates the right messages.

And we need to objectively assess whether our workforce development efforts, in which the government invests tens of millions of dollars a year, are in fact teaching effectively that which needs to be taught.

Only then will the legislative objectives set forth in the House and Senate bills be truly achievable.

Reader Comments

Mon, Mar 4, 2013

Yes, it is always critically important to not be concerned about what you're paying for and emphasize that it's a fixed price contract. Quality be damned and true "marketplace competition" be damned. Every private entity in the world just pays the price without asking the why. The price is the price so take it or leave it. For instance, the last time I bought a car, it clearly said what the MSRP was on the car window so I just paid sticker at the first dealership that sold the horseless carriage. I also ensured that I didn't buy one that truly met my needs following careful consideration, I just bought what was the latest offered by the manufacturer rather than something truly reliable based on field experience amongst thousands of users. That is totally how it works in the private sector. Your points are both factually valid and insightful sir. I cannot see how such reform efforts may go astray when this type of thinking is being fed into the foundation of understanding. I tip my bonnet to you!

Mon, Mar 4, 2013 Don Page Alexandria VA

Stan, As usual, a very well informed and articulated assessment of some of the troubles surrounding Fed Acquisition. Certainly the knowledge and experience levels among Fed Acq professionals is at the root of the issue. I would add, though, that the complexity of Fed procurement 'rules', if you will, make it difficult for the people in Acquisition roles to execute with consistency while keeping the desired business results of their organizations ahead of the process. Fear of either oversight inquisition or protested awards or both causes a near paralytic state that increases public and private sector cost and dramatically increases the risk of an undesirable procurement outcomes. We need to take a look at what Fed Acquisition professionals are being taught, check how the various oversight communities are holding them accountable for proper implementation and execution, and continue your efforts to get the public side and the private side on the same page with respect to the ‘rules’.

Sun, Mar 3, 2013 Industry Friend

Stan, While your members bridle against apparently intrusive audit demands unforeseen by existing GSA regs and underlying law, we need to remember where this thrust comes from. It comes from untold thousands, probably worth tens of billions of dollars, of cases where the vendor did not come clean about its commercial pricing. This is necessary, among other reasons, to determine how good a deal the govt is going to get vis-a-vis all customers of a particular vendor for one service. There are violations of TINA, the FCA, and related statute constantly. The government is overwhelmed as it is to make prudent checks of compliance. The government has seen or suspected enough misbehavior, both documented and suggested by numerous transactions and findings in audits and other investigations, from some companies and thus needs to look at their books. This is only human nature, given track records to date. Yes, this will add a lot to the procurement cycle, just when we needed to speed it up. There also will be added costs and real risks to proprietary info, and GSA hardly has a pristine record in keeping commercial secrets. It is up to you to initiate a new ethical thrust among yo members; many still act as if there are no bright red lines marking unethical, noncompliant, and criminal behavior--and few ever get penalized. You should also raise the concerns you have frankly with GSA, even if the present environment screams that the timing for this is really bad. But it is the product of playing fast and loose for so many years. If companies are too unhappy, they can walk away. In almost every case, the government and the Nation can endure without them. Smart money says many of them need the gov business desperately, even with much lower profitability, and are not used to playing by the rules to the necessary degree.

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