Kelman: Unsung heroes of contracting

Phil Salmeri understands performance contracting, and he tries to help government folks do the same

At a National Contract Management Association event some time ago, I ran into Phil Salmeri, a contracting officer at the Naval Surface Warfare Center in Virginia whom I knew when I worked in government. Salmeri retired in 1995. Since then, he has been training government contracting folks.

I asked him what he was up to lately. He said he has been working with various program offices in the Defense Department on performance-based contracting. When I asked him to tell me about some of his experiences, I heard some interesting stories.

One of the projects Salmeri worked on recently was a river-dredging contract for the Army Corps of Engineers. In the past, the government specified what dredging activities a contractor should undertake. In this case, the first question Salmeri asked was: “Why do you want to dredge the river?” In a manner slightly reminiscent of the joke about why the chicken crossed the road, the reply was: “So boats can go in and out.”

Salmeri followed by asking how they knew whether boats would be able to go in and out. The answer was the river needed to be cleared 100 feet wide by 12 feet deep. Thus was born a performance-based contract for dredging services.

The corps no longer tells contractors how to dredge the river. It uses a Global Positioning System tool to check compliance with the performance requirements. The only difficulty Salmeri had in selling the new approach was that some people worried it might increase contractor profits, which they considered a reason to fret even though it would also cost the government less.

People need to remember that win-win is better than lose-lose.

Salmeri had another story about a communications upgrade at a military base. In the past, the government would provide a wiring diagram for each building and specify what wiring and cabling the contractor would need to install.

Salmeri asked the engineers how they knew what to ask for. They said they started with the capabilities they needed and then developed specifications they believed would meet those requirements.

Salmeri urged the engineers to give the contractors the wiring diagram and the capabilities needed in terms of capacity, speed and ability to upgrade. Then he encouraged them to let the contractors bid based on those requirements.

A larger story emerges from those two stories. The contracting community is understaffed and has many overseers. It is a punching bag for the media and politicians.

Despite all that, many contracting officials strive to improve how they serve their agencies and the public. We don’t hear about them much. They are working below the radar. And they haven’t received enough encouragement.

That needs to change. Office of Federal Procurement Policy Administrator Paul Denett should offer vocal, public support for contracting professionals who try innovative ways to get the best value for the government — even though every innovation may not succeed. Denett should know. He is that kind of contracting professional.

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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