CIO Perspective

Program management: The contractor's role

The fifth and final key element to delivering successful IT programs is developing the proper relationships with the contractor or contractors supporting the program. Most government agencies cannot execute large IT programs without outside support, and those relationships have both formal and informal aspects.

The formal aspect of a contractor relationship includes the procurement and the resulting contract in which the scope of work, terms and incentives are codified. That is where the procurement organization, with the contracting officer or officers being part of the team, must work closely with or even be embedded as part of the program management office (PMO) to make sure contracts are structured to best support what the program is seeking to achieve.

Yet there are aspects of the procurement process that I have found particularly disturbing in reviewing many government IT programs. Take, for example, the lowest price, technically acceptable (LPTA) procurement approach. If the government is buying commodity items or services, and the implementation and execution risks are low, LPTA is a good choice. Too often, however, LPTA is being used on key development and implementation contracts for large IT programs.

I have been steadfast in my belief that paying a reasonable premium to a better qualified contractor that will lower overall program execution risk is always the right decision. The price of failure on such programs is so much greater than any premium the government would pay to a contractor that, on balance, the government should be using "best value" criteria for contractor selections on its large, complex IT programs.

I also wish to reiterate a point I made in my column on the people factor in programs:

"The federal government would improve its ability to buy IT substantially if the contracting officers reported to the program managers and were measured not just on following the procurement regulations but on deliverables provided by the contractor and the success of the program. Program managers are often stuck with contract vehicles that are ill suited to the work that needs to be done, and they have no recourse."

The informal aspect of a contractor relationship, meanwhile, is the management of the contractor via the PMO. When reviewing a program, I look to see whether the contractor employees are well integrated into the program and clearly understand their role and the roles of others, and whether there is open and candid communication among the parties. That type of environment will enable team members to identify issues early, share and discuss innovative ideas, and make informed decisions.

In a well-integrated and functional program, there should be a sense of one team on which the government and contractor employees are working together effectively to meet program objectives. I refer to such an environment as "badgeless" because program members feel they are part of a team and it matters little whether they are a government or contractor employee. They are there to get the job done.

An effective way to achieve a well-integrated team is to ensure that, although the government must respect the formal scope defined in the statement of work, the government PM makes sure the contractor's program leaders understand the full range of program execution and are integrated well into the PMO.

Further, the government PM should be leery of accepting the dictum that "it is the contractor's fault" when things go awry. I reviewed more than a hundred programs when I was in government, and my determination is that there was typically shared culpability. The government PM needs to be unbiased in determining what is wrong and what steps should be taken to get back on track.

Likewise, a contractor's program leaders should understand the ultimate success outcomes for the program and be prepared to support changes to the program even if they are not in a contractor's near-term best interest. The contractor also needs to be as efficient and effective as possible in execution, even if it means sacrificing near-term revenue opportunities.

It was quite unsettling to me when contractors would seek to defend their current staffing levels even in the face of low productivity and quality problems. Government PMs are looking for contractor leaders to help fix these issues, not defend their own near-term self-interest. If companies want to build a solid reputation for delivery excellence, they should develop a culture of both competence and efficiency -- and recognize that helping the government achieve its objectives is well aligned with companies' long-term growth prospects.

Reader comments

Fri, Sep 19, 2014 Richard Spires

In response to the post, let me give you a couple of IRS examples. The program management and teamwork shown during the development of the Modernized e-File program was excellent. This program first delivered electronic return processing for the business returns (1120s). I recall when then Commissioner Mark Everson (this was back in 2006) wanted to mandate the largest corporations to e-file, he asked his senior leadership team whether we could deliver for the next filing season. The Modernized e-File program team devised a plan to ensure delivery of the needed capability that Debbie Nolan (at the time head of Large and Medium Sized Businesses unit at IRS) and I took back to the Commissioner. He mandated that the largest corporations e-file and even though there was a lot of griping by industry, it went very smoothly. Subsequently, Modernized e-File has also replaced the aging system for processing of the individual returns (the 1040s). Another example was the initial implementation of the Integrated Financial System (IFS). This actually did not get off to a good start, but about a year into the program, there was an overhaul of the governance process and weekly governance meetings attended by the senior program, business, and IT leadership were established to ensure implementation stayed on track and that all obstacles were quickly addressed. It resulted in a well-formed and capable team of government and contractors that delivered a modern financial system for the IRS.

Mon, Sep 15, 2014

Mr. Spires. Could you please relate specific achievements (successes, right?) of the BSMP at the IRS to your recommendations in this interesting guest column? Have been searching for examples where Program Management has, in fact, been demonstrably good. Perhaps there are good examples in your IRS experiences.

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