Benefits of contract management need no proof

Many high-level administration officials and contracting experts say they believe improving the early stage of the procurement process will yield savings down the line. They have no doubt that if enough money goes to enhancing contracting offices’ resources and abilities, the investment will more than pay for itself.

So when Steve Kelman, former administrator of the Office of Federal Procurement Policy and now a professor at Harvard University, wrote a column in Federal Computer Week proposing an experiment to test those assumptions, I asked experts to share their thoughts on what such an experiment might entail and what it could show us.

In his column (“Can we radically improve service contract management?”), Kelman proposed allocating a significant amount of money to boost management resources for a set of 20 service contracts while giving no such money to a set of similar contracts. His notion was that the experiment would prove whether — and how much — money could be saved by front-loading investment in contract management.

“If costs go down and/or performance goes up on the contracts receiving additional resources, we should use that approach more broadly in the future,” Kelman wrote. “If there is no improvement, we will need to re-examine assumptions about the impact of adding resources and how easy it might be to cut contracting costs through better management.”

Many acquisition experts who already believe in contract management as a money-saver liked Kelman’s idea. “We already know that it does work, but to get more data is certainly useful,” said Allan Burman, former OFPP administrator and now president of Jefferson Solutions.

Nevertheless, he also said the experiment would take a lot of work without the promise of empirically sound results. Generating relevant data would be tough because no two service contracts are identical, he said.

Officials would need to establish criteria for the experiment and set baseline conditions for the contracts, perhaps choosing a certain type of service or a cross-section, said Diann McCoy, practice management executive at ASI Government.

She added that the experiment could go beyond saving money to demonstrate the intangible benefits of such an approach.

Indeed, Peter Tuttle, senior acquisition manager at Distributed Solutions, said the outcome of the experiment could be just the sort of proof officials need to convince appropriators that it is worthwhile to invest more money in contract management.

The need for sound data

Dan Gordon, administrator of OFPP, said the government as a whole is already investing in the ideas Kelman cited. Officials are improving training in contract oversight, particularly for contracting officers' technical representatives, who are the government’s eyes and ears on a contract’s performance. The administration is also developing a career path for IT program management, Gordon said.

“We are very focused on improving contract management” by minimizing high-risk contracts and keeping contractors accountable, he added.

“While what [Kelman] sets out in his blog is obviously just an outline, it is certainly an idea worth exploring,” he added.

Others, however, say the experiment wouldn’t yield enough results to justify the effort.

For example, Shay Assad, director of procurement, acquisition policy and strategic sourcing at the Defense Department, praised the idea but said the experiment is not necessary to prove the principles of good management.

“I don’t think we need to conduct an experiment to assign double or triple the contracting staff in any one organization in order to validate that point,” Assad said.

In fact, DOD is already working to improve its contracting shops. Several years ago, officials embarked on an initiative to assess the acquisition workforce’s needs. They gathered input from most of the employees and all senior leaders to identify competency gaps, and officials are using that knowledge to help employees become smarter buyers. Last year, DOD focused on initiatives aimed at recruiting, hiring, training and encouraging employees to stay in the acquisition field.

Assad said he agrees with Kelman’s premise that the government would benefit from having more employees focused on contract management, but Assad added that he has all the proof he needs.

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Reader comments

Fri, Mar 11, 2011 Jaime Gracia Washington, DC

Although I agree overall at the need of technical expertise knowledge in Government, that technical acumen is clearly with industry. Therefore, government needs to maximize the opportunities of knowledge transfer from industry to better develop and manage requirements. Further, I think it is also vital to have trained COTRs and PMs for this contract management oversight and governance. Focus on solutions and not the symptom of past mistakes. Throwing bodies at a solution is not a real solution. It is a quality versus quantity issue.

Wed, Mar 2, 2011

Besides a shortage of qualified Contracting Officers caused by the cut backs of the 1980's (and the very accurate prediction then that we would suffer now), the Government procurement force needs to better understand industry and how commerce works. The old addage that "Contractors are crooks" is no way to train a workforce, nor tolerate. Procurement officials should be required to spend two years in industry via a job swap program so that both Government and Industry people can better understand the reality of the work environment and both become team players that work together efficiently and effectively.

Wed, Mar 2, 2011

Program management is essential, but that's not the government's most critical deficiency. The critical deficiency is the government's lack of technical subject matter knowledge for complex procurements, as the previous poster described with the drone example. Without technical expertise the government can't write requirements for procurements. They can't effectively evaluate contractor proposals and they can't build effective validation testing, etc. The government tries to fill the void of engineering, computer science, scientific subject-matter expertise by hiring private sector advisors to structure procurements. But ultimately, the government needs people with both mission responsibility and technical expertise who are as smart or smarter than the vendors that they select. Instead, what happens today is that procurement officials pull old content off the shelf and re-use it over and over again because they lack the technical knowledge to generate new requirements. So the same old, outdated requirements show up in procurement after procurement. This hamstrings responses by putting vendors in the difficult position of pointing out that the government's requirements are obsolete or uniformed, but the vendor still needs to avoid getting their solution thrown out for non-compliance. So in short, either the government needs to import competent technical managers or procurement rules should be amended to provide better ways for vendors to demonstrate that what the government is asking for may not be in the government's own best interests.

Wed, Feb 23, 2011

The colossal inefficiency of the Federal government can be traced directly to the invention of the "Program Manager" designation. Working, no doubt, from some Harvard Business Review article, the powers that be determined that no technical expertise was required to manage highly technical programs. The only thing needed was a spreadsheet and a quad chart.

As result, we now have an cadre of middle managers, typically GS 13's and 14's, that consists of Program Managers who must rely on the self-assessments of their contractors to gauge the progress and outcomes of their programs.

When a contractor says that their software can perform accurate facial recognition from a low-res, black and white video image from a drone, the PM, lacking any technical knowledge in the area, blithely accepts the assertion, writes the check, and then briefs the success story.

By the time the truth emerges, the PM has moved on to another program. The new PM, no more qualified than the last, acknowledges the program's shortcomings, but insists that a new acronym, spreadsheet and quad chart will correct the situation.

As near as I can tell, there is no end to this loop.

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