Reforms are just a start

Fifteen years ago, I was in the midst of academic research on information technology procurement, which ended up published in 1990 as the book "Procurement and Public Management."

As I was collecting the data, I surveyed a sample of program customers about their satisfaction with vendor performance on their most recent large IT contract. The average satisfaction level, on a 1-10 scale, was 6.9.

Two of my students at the Kennedy School of Government are currently completing a project for the General Services Administration that has allowed them to gather current data on customer satisfaction with vendor performance on orders from the IT services schedules, using the same question wording I used 15 years ago. Though they haven't fully analyzed their data yet, early results suggest that in the past 15 years, satisfaction with vendor performance has soared to about 9.5.

These contrasting numbers summarize the impact of procurement reform on government IT. There have been some significant changes. Among them:

  • The introduction of past performance as a crucial factor for awarding contracts.
  • The move from low-bid to best-value contracting.
  • Improved communication between government and industry during the pre-procurement process.
  • The disappearance of the bid-protest culture of winning business by suing your customer.

As a result of these changes, the tone of the government marketplace has shifted toward one emphasizing vendor performance as a key to vendor success. This is good news.

What mistakes did procurement reform make?

Although I am not sure this is so, it is at least possible that the procurement workforce, including auditors for cost-based contracts, was downsized too much. We didn't pay enough attention to bolstering and reinventing contract/program management.

More importantly, what remains in procurement reforms? A lot!

Too many IT people see procurement reform just as a way to buy faster. That's important, of course, but it's only a small part of what reform is about. We need to make better purchases, especially for large systems development/modernization buys where the success rate is still distressingly low.

We still need to get much better at establishing and monitoring performance metrics; strongly encouraging vendor performance through share-in-savings, fixed-price incentive-fee contracts and award fees with greater bite; and managing contracts after award. The government needs to improve development and control of requirements. It also needs to be willing to bite some bullets on the business process re-engineering necessary to avoid extensive software customization for new systems.

And we need to fight with all our determination the efforts of reactionaries to use every problem or scandal — real or imagined — as an excuse to turn the system back to a time when it didn't matter if you accomplished anything, as long as you kept your nose clean.

In all, a rich agenda for the next 15 years!

Kelman is a professor of public management at Harvard University's Kennedy School and former administrator of the Office of Federal Procurement Policy. He can be reached at steve_kelman@harvard.edu.

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