By Steve Kelman
Simplified acquisition procedures for smaller purchases have returned to the contracting officer's toolbox. (GSA image)
One of the products of the procurement reform efforts of the 1990's was regulatory changes to streamline procedures for smaller buys and contracts for commercial items. There were two basic philosophies behind these changes:
1) to reduce requirements on the government in awarding these contracts, speeding up the notoriously slow government procurement process;
2) to reduce government-unique requirements for contractors, mainly to encourage commercial companies, particularly smaller firms with cutting-edge technologies, to do business with the government.
The major regulatory products of this effort were changes to Part 12 of the Federal Acquisition Regulation (FAR) – rules for buying commercial items – and to Part 13 – rules for smaller purchases under $150,000 in value.
As part of all this, in 1994 a test program was established to allow the use of the simplified procedures for smaller purchases up to a $5 million buy (later raised to $6.5 million) if the government was buying a commercial item. The test program was regularly renewed by Congress, but never made permanent. Then, in 2011 it was not renewed (stories differ about whether this was an oversight or a conscious decision). However, in this year's DOD authorization bill, the test program has been reborn (though again extended for two years, not made permanent). So now agencies once again are able to use these simplified procedures.
This may sound like a lot of regulatory gobbledygook; why should anybody care? It is true that the procedures for commercial items in Part 12 of the FAR already streamline the procurement process compared to procurements for non-commercial items. (Government newbies who fret about procurement being too slow should be aware that things used to be much worse.)
However, the smaller-purchase procedures authorized by the test program do allow the process effectively to be speeded up – as DOD noted in its request to restore the authority, including in a contingency contracting environment where speed is particularly important. Relative weights for evaluation factors (such as price and past performance) do not need to be specified in the solicitation, and evaluation itself is simplified. Past performance judgments may be based on the contracting officer's own knowledge or based on customer surveys, rather than requiring a more formal process. Some agencies – although the FAR does not specify this – started refusing to use reverse auctions for contracts over $100,000 after the test program was stopped.
There has been controversy over the years about the second strand of these 1990's-era efforts, involving reduction of requirements for contractors, particularly regarding submission of cost data. (Critics worried that many military-like products supplied by defense contractors were being classified as commercial items and that the lack of cost data made it harder for the government to get a good deal on such items.) Whatever one's views on that debate, people should be able to agree, I think, that allowing the government to move quickly and with fewer administrative resources to buy the kinds of off-the-shelf products and services that are the backbone of this regulatory authority is a good thing.
I would love to hear views from frontline buyers in the government about the practical differences between standard commercial item buying using Part 12 and the more-simplified buying now re-authorized in the FAR 13.5 test program.
Posted on Feb 05, 2013 at 2:19 PM0 comments
As this recent daytime photo shows, Beijing air pollution has reached extreme levels. (photo by Alastair Thornton)
During the inauguration, I blogged about the scenarios, both hopeful and pessimistic, that a number of Democratic friends attending the events had sketched for the next four years. One blog reader noted in a response that China too has new leadership -- although they are beginning a ten-year term, unmarred by any election in between -- and suggested I ask some Chinese about their hopes and worries the next time I was in China.
As luck would have it, I was about to speak to a group of Chinese university students under the auspices of the China Future Leaders program. So I did.
What did these university students say?
Generally, their answers did not surprise me. The most common two hopes the students had for China under its new leader Xi Jingping were for a reduction in inequality and a reduction in corruption. I guess I wasn't surprised because these have been two themes Xi himself has emphasized as goals for his rule -- though it is interesting that the students have basically accepted Xi's own priorities. Both are huge sources of discontent in China, and they are connected. Many senior government and party officials gain enormous wealth through corruption, and people are increasingly annoyed. Indeed, Xi, in his own version of an inaugural address, correctly noted that past Chinese dynasties have typically fallen because of corruption, and stated that if the Communist Party couldn't reduce corruption, it might fall from power as well.
The two dominant worries -- pollution and the danger of a war with Japan -- were a little more surprising. The recent pollut -- ion nightmares in Beijing -- where pollution levels were literally "off the charts," worse than the measurement system recognizes -- have finally made more Chinese realize that the disgusting, sickening pollution is not "fog." Here again, the government changed its tune and did not try to cover up the recent pollution catastrophes, going so far as to make the Beijing pollution nightmare the lead story on the evening CCTV news. (I picked up a copy of China Daily, China's quasi-official English-language newspaper, at the USAirways Club in Washington Wednesday afternoon, and the front page featured a sickening picture of the pollution in Tiananmen Square -- here's a screenshot of the story and picture -- and an editorial that called the pollution "appalling.") But this is the first time these university student groups have expressed clear concern about pollution.
The worries about war with Japan were even more surprising, because I had actually asked the student group that came last summer how many were worried about the danger of war with Japan over territorial disputes, and virtually nobody was. This time, about half the group was worried there would be a war between China and Japan over the next decade.
A few students -- but this was definitely a minority -- used the discussion to express hopes that China would become more democratic. I asked the students what their sources of information about the United States were, and one girl said she liked to read books about the U.S. constitution. Several of the students are planning to become journalists, and about three-quarters of them knew about the recent fight between journalists at the reformist Southern Weekend newspaper and the local Communist Party; one student said her hope for the next decade was elimination of censorship.
Posted on Jan 31, 2013 at 2:19 PM1 comments
I recently saw a fascinating article in The Boston Globe that caught my eye, both on its own terms and in terms of possible implications for government.
The article was about the sandwich chain Panera Bread establishing a new "Panera Cares Café" in downtown Boston. The café, owned by the Panera Bread Foundation, looks like any other Panera Bread outlet and has the same menu. However, it has no cash registers. Instead, the menu shows suggested prices for each item. People who can afford it are asked to put that amount or more into collection baskets in the restaurant; those who cannot may eat for free or for whatever amount they feel they can pay. Panera is only asking/hoping that the café will cover its costs; there is no expectation that the outlet will make a profit for the company.
My first reaction to this story was that this is a wonderful idea, and an innovation. Some creative person thought up the idea of giving paying customers at the café the opportunity to keep the operation going for those who can’t afford to pay. This kind of approach was pioneered in India several decades ago, where the Aravind Eye Hospital in Madurai used revenues from paying eye surgery patients to fund free operations to save impoverished villagers from cataract-induced blindness.
In a strange (and not quite analogous) way, the gift shops that are now a major source of museum revenue represent a similar idea, namely getting revenue from one group of customers to fund or partly fund a nonprofit operation that otherwise would be dependent on donations.
So a shout-out to Panera Bread for doing this. (I hope it is not abused by people who could afford to pay and choose not to, or by people taking large amounts of food from the restaurant, perhaps for resale.)
I bring up this story in my blog, though, for slightly different reasons related to government management. First, to remind those in government of the power of innovative ideas. I doubt this idea was associated with profit-and-loss responsibility or financial reward. It was just thinking creatively, something that government folks should be able to do just as well.
Second (and much more speculatively – indeed, some may think I'm crazy), I wonder whether some government agencies might experiment with a version of this idea. I like to believe that there are at least some Americans who would like to make a contribution beyond their taxes, however small, to reducing the federal deficit.
People are of course in principle free to pay more taxes than they owe, but when we fork over our taxes, we are probably thinking more about how much we are paying, and not very much in the mood to help more. But what if some government agencies made available the possibility of an additional voluntary donation towards deficit reduction in the context of paying fees for various government-provided services, such as getting a passport or buying tickets to national parks? Obviously, at best the amount of money such contributions would raise would be the tiniest of drops in the deficit ocean. But it would give citizens a chance to show patriotic engagement – and perhaps send a signal to politicians about some willingness to sacrifice in order to get our deficit down.
OK, so maybe I’m crazy. Any reactions?
Posted on Jan 29, 2013 at 2:19 PM8 comments