I have been in Barcelona for a few days at an academic conference, just as Spain is in the daily headlines with new crisis stories about possible bank runs, bailouts, and the collapse of the euro. I don’t want to say that the streets of the city show no evidence that the place is in the middle of a crisis, but you do have to look and ask to find the signs.
The banks are all open, with no lines or visible signs of panic. Despite a 25 percent unemployment rate, there are traffic jams at rush hour on the highways. There are some musicians asking for money in subway stations and on the trains themselves, but not noticeably more than in New York, and almost no beggars on the streets.
In Catalonia (of which Barcelona is the capital), the regional government has imposed a 5 percent wage cut for all civil servants, which includes professors at the (mostly public) universities, though this has not yet occurred at the national level or in many other regional governments. At a private business school where a friend teaches, the signs of crisis are more subtle: the faculty has been told to take economy class on the high-speed rail instead of first class, and the university has seen a dramatic improvement in the quality of people applying for junior-level positions as research assistants (that means lots of overqualified unemployed people are applying). Most people with jobs have received no pay increase for several years.
People I asked all said they had at least one, and sometimes several, friends who were unemployed, though with two-career couples, there was usually still one income. Somebody told me they were surprised recently to see a middle-aged person doing a pizza home delivery, rather than a teenager as would typically have been the case. Restaurant prices are noticeably lower than in sky-high London and Paris, with lots of meal combo specials at quite reasonable prices, and again apparently have stayed stable for several years; at the airport, I was surprised at the number of discounted items in the duty free stores (lots and lots of 20 percent off specials).
I guess one way of thinking about this is that standards of living have gotten high enough in rich countries that a fairly substantial belt-tightening can occur before the average person starts significantly suffering. It is still surprising that the level of unrest is, in spite of everything, so low with so many people unemployed.
Of course, the crisis could get much worse – say, if the Spanish government is shut off from debt markets or if the Euro collapses. What we see now might then be mild compared to that possible future.
In my free time, I have been looking a lot at the work of one of the most amazing architects ever, Antoni Gaudi. I am still amazed at how his mind conceived the concoction of strange shapes, wild colors, and asymmetries his architecture represents – there is nothing like this anywhere in the world. Here’s a link to some pictures of his work. Perhaps as amazing is that many of his buildings were private homes built for rich businessmen. My initial reaction was to wonder how these staid wealthy textile barons supported such unconventional architecture, but I got it when somebody said to me it was a way for the ultra-rich of Barcelona to show off.
Gaudi was very religious, and I spent an afternoon at his unfinished masterpiece the Sagrada Familia church, his take on Gothic. I knew the church was unfinished, and the derricks around it make clear that an attempt is underway almost a century later to complete it (using private contributions). But I was surprised at just how unfinished Sagrada Familia was at the time of Gaudi’s death in 1926. He had been working on it for 42 years; for the last 12 years of his life, it was the only project he was working on. Gaudi was a master of the change order -- I had assumed “unfinished” meant a few touches left to go, but in fact the building was about 10 percent complete when he died. They are estimating the church will be completed in 2035!
In short, a project management disaster…
In the square around the church there are a Burger King, KFC, Subway, and Starbucks.
Posted on May 21, 2012 at 1:59 PM1 comments
During the economic crisis of 2008-2009, I wrote a number of blogs and columns (and also discussed at speaking engagements) the need to urge the government to seek price reductions in existing contracts and to be more aggressive about seeking discounts when new contracts were awarded. In one column, that I must admit went over like a lead balloon, (one commenter asked what I had been drinking when I wrote it), I urged defense contractors to accept a temporary 1 percent reduction in prices for weapons in production and 10 percent for spare parts. In general, I think the government response to this suggestion was underwhelming.
Look, what I was proposing was exactly what was happening at the time in the commercial world, in deals between private buyers and sellers. A good Washington friend had commented to me that bids for renovating his apartment declined noticeably after the economic crisis set in. The media at the time was filled with stories about big companies seeking to re-open lease rental rates and other prices. I remember myself at the depths of the crisis going from counter to counter at an airport rental car center seeking discounts off best published rates – and ended up getting discounts negotiated on the spot. This is not “anti-vendor,” or anti-good relations between government and industry, it is part of how the world works. (When the economy is tight, do vendors hold back from being aggressive on price in the name of industry-government cooperation?)
At any rate, I see from a story in this week’s Federal Times, with the in-your-face title “Agencies Press Vendors to Cut Prices – Or Else,” that this issue has re-emerged, now in the context of the budget deficit and shrinking agency budgets. The article began with the brief anecdote: The Equal Employment Opportunity Commission had been paying $800,000 last year for hundreds of BlackBerry smart phones. Then the commission’s IT budget was cut by almost 15 percent. The agency pressed Verizon for some concessions it needed to maintain the service, and the company agreed to bundle cell phone minutes, scrapped underutilized phones from the plan, and moved employees to voice and data plans that would accommodate their phone use. The EEOC cut its costs by $240,000 for this fiscal year.
The article goes on to cite other examples, all driven by budget cutbacks where the agency simply doesn’t have the money any more to buy what it was buying at the same prices, of mid-contract renegotiations and greater aggressiveness on re-competes.
Of course this isn’t pleasant. In some situations, industry profit margins are already cut to the bone, so, like everything else, this shouldn’t be one size fits all. (My guess is that hourly labor rates for some labor categories may be a fairly ripe target for discounting, especially since the discounting off of General Services Administration schedule rates or Indefinite Delivery, Indefinite Quantity contracts can be temporary.) If agencies do this, they should also be giving significant past performance credit to vendors who are willing to understand the government’s situation and step up to the plate – this shouldn’t be punitive, and should provide an opportunity for vendors to show their support for their government customers.
The bottom line is that this is something contracting offices should be looking at aggressively.
Posted on May 16, 2012 at 10:39 AM2 comments
If you talk with contracting people, there is probably no theme that comes up more often than the challenges of working with program people to develop statements of requirements (hopefully performance-based as much as possible) for what they buy. Many program people don't know how to do this, and often they resist doing so -- seeing it as a bunch of bureaucracy imposed on them by contracting weenies.
While not denying that contracting people are capable of imposing valueless bureaucratic requirements on program folks -- sometimes because they just want to, though often because they are required by law -- in this case I think program people should reconsider any instinctive hostility. If you can't put down on paper what you want out of a contract, it is much more likely that the contractor won't give you what you need to get your program to work well, or that you will get overcharged due to rework and wheel-spinning.
Yes, requirements typically change over time, and it is often difficult to know exactly what you want when you are starting buying something new, but it is really in the program's interest -- and not just a bureaucratic requirement -- for program folks to do their best.
There is some good news here. Internet-based tools now exist to walk program people through the development of requirements, taking the contracting jargon out of the process and not demanding that the program folks be walking FAR-ites.
One tool, called Automated Requirements Roadmap Tool (ARRT) and developed for the Defense Acquisition University, basically uses a TurboTax-type interview approach, which is a really good idea. Just as TurboTax doesn't require you understand the tax forms and just asks you a bunch of interview questions -- and then reformats the answers to correspond to the tax forms -- ARRT does the same thing. It asks the program person a number of questions, and then creates a requirements document. ARRT is designed to help develop requirements for buying services, which are often the hardest for program people to do. The program person still needs to know what they want -- no tool can solve that problem -- but the tool basically takes a lot of the bureaucracy out of the process. This tool is available free; all you need to do is register. Thanks to the Defense Acquisition University for making this available.
A second tool, part of the Tailored Acquisition Portal developed by the company ASI Government, is similar in that it allows the program person to sidestep bureaucracy and stay focused on the task at hand. It uses a somewhat different approach to development of the actual requirements, however, focusing more on recurring requirements (for services or products) and centered around the use of templates that fill in most of the features of a requirement. Hence this tool is adapted to specific customers and their specific recurring requirements.
A tool ASI has developed for the Army Medical Command allows, for example, quick development of a requirement to buy contracted nursing services -- most of the elements of the requirement are in the template, and the customer fills in such supporting data as how many nurses are needed, for what period of time, and where, along with details of the source selection criteria (such as whether price or past performance is more important.) ASI is a for-profit company, and they charge customers for their tool, including tailoring the tool to the specific recurring requirements the organization wishes to cover. (Full disclosure: I have no financial connection with ASI Government, but I have spoken at a number of ASI conferences over the years, and received modest speaking fees.)
These great tools, as noted, don't do all the work for the program people. Program people should still consult with a good contracting person in their organization who can help them think through how to express requirements in words (I always like starting with the question: "How will you know if this contract has succeeded after it's done?"). I also am pleased that a number of contracting organizations, and some program organizations, are using actual boundary-spanners expert in both the program (engineering, IT) and contracting worlds to help the two cultures communicate for the purposes of developing better requirements.
Posted on May 10, 2012 at 7:56 AM2 comments