To be honest, I haven't been following the latest twists and turns in the Air Force's tanker procurement. This program has been marred by repeated congressional interference and a bid protest on the previous procurement that, depending on your point of view, either showed the Air Force could do nothing right or (closer to my view) that bid protest lawyers can almost always find some errors in a complex procurement such that a world where big procurements are almost always protested is a recipe for disaster for the procurement system.
I did know that the Air Force had issued a new request for proposal and that the familiar passel of congressional supporters of Boeing and Northrop Grumman had made their familiar comments. However, not until I read a recent supplement on the aerospace industry in the Financial Times that I actually got a feel for the tanker acquisition strategy.
It was not good news.
According to the Financial Times, the RFP includes 373 mandatory requirements, all graded simply pass-fail. There is no "extra credit" for any features beyond the mandatory requirements. Although the article is not clear on this (and thus I may be misinterpreting the RFP), it might be that each mandatory requirement is actually given equal weight in scoring.
This approach reflects every nightmare that many of us have had about the impact of the bid protest environment and the fear industry on how we do procurement. To "protest-proof" the RFP, and protect itself from criticism, the Air Force has removed human judgment from the process, and stated that it is not willing to reward quality at all. All requirements are mandatory (no credit for coming up with something that is valuable but not mandatory). All grades are pass-fail -- sort of like a parody of the civil service system. This is the procurement equivalent of the old paint-by-numbers approach to teaching people to be artists, an approach more suited to the culture of Chairman Mao's China than to a high-tech Air Force.
This is not a recipe for a procurement system that delivers value to agencies or taxpayers. It should be a warning signal to Dan Gordon, Obama’s nominee for OFPP administrator, and the administration's procurement leadership of problems that need to be overcome.
Posted on Nov 20, 2009 at 2:05 PM0 comments
At a talk at the recent IBM conference on the Obama administration’s public management research agenda, Jeff Zients, the government's chief performance officer and OMB's deputy director for management, devoted some attention to contracting.
Zients will be the boss of Dan Gordon, assuming the Senate confirms Gordon as the Office of Federal Procurement Policy administrator, and of course will have a significant influence over Gordon's agenda and priorities. (Full disclosure: My wife Shelley Metzenbaum recently started working for Zients at OMB as program associate director for performance and personnel.)
Zients revealed that he sees cost savings from contracting as being a source of "early wins" for down payments for deficit reductions. Pretty much unmentioned were the items discussed in the administration's March contracting memo, which appeared before the arrival of either Zients or Gordon and which generally played to at best mixed reviews from the procurement community.
Instead, Zients specifically mentioned efforts to "leverage scale" to get better prices on commodities -- a push for strategic sourcing. I wouldn't be surprised to see very focused efforts by Zients and Gordon to work with GSA and agencies to find specific early targets for strategic sourcing contracts.
Zients, and even OMB Director Peter Orzag, will need to be involved at the Deputy Secretary level -- higher than these issues have ever been raised before -- to gain the commitments to use these contracts that are a prerequisite for getting the best prices from leveraged buying. And I expect a number of initiatives from the administration to develop innovative approaches to generating cost savings, including, I hope, giving contract bidders credit during source selection for proposing ways to save money by revising the specs or performance standards in a solicitation and -- if the administration chooses to be really daring (the way Zients frequently notes he wants to be) -- to push for a revival of share-in-savings contracting.
(Incidentally, in recent blog, FCW's Matthew Weigelt noticed a statement Zients made at a Senate hearing in which Sen. Claire McCaskill (D-Mo.) criticized interagency contracting, stating that agencies should not charge other agencies fees for products or service. "Essentially, they’re on the same team and shouldn’t be making money off of each other," she added, according to Weigelt.
In response to McCaskill's statement, Zients called the practice "bizarre." Well, Zients apparently did not mean that the GSA or others need to stop their interagency work. In fact, he has frequently argued that pooling purchasing power is critical to ensuring the government gets the best possible prices and best possible service. Certainly, interagency contracting can be misused, but it can also bring needed competition to the procurement environment, as well as better access to contracting expertise for agencies. Zients has since assured a number of people that he is not an opponent of interagency contracting.
Posted on Nov 17, 2009 at 2:33 PM0 comments
Since last spring, China's government has been blocking access to YouTube; then this summer, after the disturbances in Xinjiang province, the government started blocking Facebook. Some Chinese can get access to these blocked sites through so-called "proxy servers," but this represents -- in my view -- a doomed attempt by the Chinese government to have the Internet and block it, too.
Yesterday morning I found in my inbox a message from a Chinese Facebook friend that informed me Facebook was no longer blocked in China. I haven't been able to confirm this -- I have sent Facebook messages to a number of other Chinese Facebook friends about this, but haven't heard back.
President Barack Obama has just left for Asia and will be visiting China next week. I saw a Facebook post yesterday from Zhang Erping, a Chinese former Kennedy School student and critic of the regime there, asking that the president raise the issue of Internet blocking during his trip. It would strike a Web 2.0 blow for human rights, and be consistent with the president's own interest in new technologies and social media, for him to raise the issue of Internet blocking while he is there.
Perhaps he can paraphrase Ronald Reagan's challenge to Gorbachev and say to Hu Jintao, China's president: "Mr. President, write on my wall."
Posted on Nov 13, 2009 at 8:20 AM4 comments
Back around 2001, Steve Schooner, who is now the co-director of the Government Procurement Law Program at George Washington University, attracted significant attention and controversy with his criticism of 1990s procurement reform for gutting contract oversight and legal protections. For several years, the two of us did a "Steve and Steve Show," appearing at various contracting gatherings debating procurement policy. Throughout the years, Schooner and I remained friends -- he had worked for a while at the Office of Federal Procurement Policy while I was there. More recently, we actually co-authored some op-ed articles, which attracted attention of the sort that comes when a prominent Democrat and a prominent Republican in Congress co-sponsor legislation.
Steve recently wrote a brief background paper on contracting policy in the new administration for an IBM Center for the Business of Government conference on the public management research agenda. Reading the paper, it seems that our previous disagreements have disappeared. Noting that developing countries need to focus their procurement system efforts on reducing corruption, he notes that "the United States can do better." (I have frequently stated that we don't want to design a procurement system in the U.S. that would be fit for Paraguay or Gabon.) One of the primary challenges he identified for the system was "neutralizing the toxic environment" in which "resources are shifted from pursuing value-based outcomes to creating compliance and risk avoidance regimes." His paper concludes:
History demonstrates that a rules-based, command and control procurement system will not provide the flexibility, speed, and customer satisfaction necessary for a heavily outsourced government to effectively perform its missions. Nor will such an approach maximize the value of taxpayer dollars spent. Performance objectives -- outcomes, rather than processes -- must move to the forefront of acquisition reform.
The only exception I take to this whole paragraph is the split infinitive in the first sentence!
Schooner's paper reminds me a bit of my own experiences as a college student in the '60s. My political views stayed more or less constant, but in the view of others I appeared to shift from being pretty far on the left to pretty far on the right, just because the political climate on campus had shifted so dramatically to the left. Steve's new statements actually shed very important light on the state of the contracting system right now: There is so much emphasis on oversight, control and legalisms, and so little on results, that even a member of the community who is a procurement lawyer and has an above-average desire to make sure the system has oversight and legal protections thinks things have gone much too far.
Given the Obama administration's stated preference for a government oriented toward results, this represents a strategic challenge for Jeff Zients, the chief performance officer, and for Daniel Gordon, slated to become the new OFPP administrator.
Posted on Nov 12, 2009 at 8:14 AM4 comments