OMB optimistic on effort to change contracting mentality

Office of Management and Budget officials believe agencies are ready to collaborate on multi-agency contracts in order to squeeze the most value out of their funds and lessen their employees’ workload.

“Particularly in this tight budgetary environment, agencies have told us they are eager for tools that can help them stretch a dollar further and do more with less,” Moira Mack, a spokeswoman for OMB, said Oct. 5.

Agencies have dealt long enough with interagency contracts that duplicate one another, Mack said.

“We’ve heard from both contractors and federal employees that, for too long, limited staff time has been wasted setting up dozens of duplicative contracts for the exact same items and services,” she said.

Dan Gordon, administrator of the Office of Federal Procurement Policy, issued a memo in September requiring officials to justify interagency contracts and blanket purchase agreements before investing a lot of time in planning for the procurement. A potential interagency contract would first have to get approval from a senior procurement executive or chief acquisition officer.

Officials would also have to search through a federal website listing proposed interagency contracts. If they find one that suits their need, they should cancel their own contract idea. If no contract suits the need, they should gather support from among the agencies to determine interest in the community, which can possibly lead to bulk buying.

However, experts told FCW that OFPP will struggle with parts of its recent guidance on awarding new interagency contracts and building business cases for proposals.

Robert Burton, former deputy OFPP administrator and now partner at the Venable law firm, said Gordon’s guidance may push agencies toward curbing their own interagency contract awards. He said officials will avoid the homework that OFPP requires to write a business case for an interagency contract or a BPA.

Until now, only governmentwide acquisition contracts, which are for IT products and services, required business cases and approval from OFPP.

On the other hand though, the guidance could possibly cause agencies to launch stand-alone contracts without economies of scale, Burton also said. Agencies don’t like to lose control of their operations or money, and they don’t like paying a fee to use another agency’s contract.

Experts also said OFPP will have its hands full in getting agencies on board with the initiative. For instance, agencies may not jump on the idea of going to a website to see what other contracts are available already. Or agencies may use their writing skills to make a proposed contract seem justified. Mack disagreed though.

“The suggestion that agencies would avoid doing reasonable comparison shopping and cost benefit analysis is dead wrong,” she said. “This guidance will help agencies stop wasting time reinventing the wheel.”

She added that OFPP left out a lot of the bureaucracy to encourage agencies in the effort.

In a post on the OMBlog from Sept. 29, the day the OFPP guidance came out, Gordon wrote that agencies have not received the advantages of bulk buying because purchasing wasn’t done in concert.

“Too often in the past, agency spending for many commonly used items was fragmented across multiple departments, programs, and components, which means that agencies often spent time writing hundreds of separate contracts, with pricing that varies widely,” he wrote.

Mack said agencies have started to buy in bulk in recent years and most recently through governmentwide strategic sourcing contracts for office supplies and domestic shipping.

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Reader comments

Thu, Oct 6, 2011

Matt, Nice article. But I have to correct one thing. No one is advocating "Bulk" buying. Bulk buying creates images of warehouses full of material, or the DoD "Mountains of Steel" during Desert Storm. What OFPP is advocating is aggregating similar requirements to get the best possible deal that agencies then can order from those contracts as demand requires. The best term to use is strategic sourcing.

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