By Steve Kelman

Blog archive

A plea: How can we get more resources and talent for post-award contract management?

Shutterstock image: wall of gears.

Within the area of public management, procurement is something of a neglected stepchild -- especially considering the amount of money spent and the significance of contracting for accomplishing the government's work. And post-award contract management is a stepchild of a stepchild, getting scant attention even from people engaged in contracting.

Yet the ultimate success or failure of a contracting effort is very dependent on how well the government manages the contract after it is awarded. Most contracting failures are significantly failures of contract management. In its annual 2015 annual report on the Performance of the Defense Acquisition System, the Department of Defense, citing a 2014 report by the Institute for Defense Analysis, noted that weapons systems "started during the reforms of the mid-1990s -- which encouraged a more 'hands off' and 'let industry do its job' approach and included a significant downsizing of the DoD acquisition workforce -- produced significantly higher funding cost growth than other regimes."

De-emphasizing contract management, in other words, seems to have hurt performance. (Mea culpa: This downsizing took place while I was in government and, though I was not personally involved in it, it was driven by colleagues in DOD with whom I closely worked. It now appears that the "hands off" approach, which was well intentioned, in hindsight went too far.)

Starting a few months ago, I decided to see if something could be done to get the issue of improving post-award contract management more attention. In my first blog on this topic, my only concrete suggestion was one I knew would be controversial -- that the government might need to hire more in-house IT "doers" to improve the government's subject matter expertise for managing contracts.

In this blog, I am returning to this issue, as earlier promised. I want to put a few possible specific initiatives out for discussion to improve the government's access to skills it is very short of, namely subject-matter expertise (e.g., in IT) and contract management skills such as negotiating contract modifications and evaluating contractor deliverables. It is surprising how little any of the areas I mention below (perhaps with the exception of the first) is discussed or written about. In none of these cases, in fact, do I feel I know enough at this point to actually recommend the approaches I will outline.

(1) 18F and the U.S. Digital Service. Both of these represent approaches towards improving IT subject matter expertise in government through short-term access to talented people who are unlikely to work tor the government permanently or even for a very extended length of time. (For blog readers outside the federal IT community, 18F, named after the address of the General Services Administration headquarters at 1800 F Street in Washington, and USDS, which is run out of the Office of Management and Budget, are both efforts to bring smart young techies, including from Silicon Valley, into government.) They are an example of a very good general idea I have long recommended -- because young people do not see themselves as staying with one employer for life the way most of their parents did, we should encourage and make it easier for young people to do short-term gigs.

This approach in theory is an excellent one, which could be expanded to make a bigger dent in SME expertise (18F is already planning to hire more folks). My impression of the practice, however, is that views in the federal IT community about how well 18F and USDS are working are mixed. Critics worry about 18F/USDS folks being arrogant towards existing agency IT staff, including CIOs, and being too political and publicity-eager. There is a substantive worry that their skills may be too limited to digital design and not involve other knowledge necessary to help agencies with legacy systems. My quick view is that 18F and USDS are good enough ideas that it is worth investing resources from both ends to reduce the cultural conflicts and make relationships more collaborative, as well as seeing if it's possible to recruit a wider skillset.

(2) IV&V contracting. IV&V stands for "independent verification and validation." IV&V contracts are ones that, at a minimum, hire an outside organization to do a final check of the functionality of newly developed software, and may give the IV&V contractor other tasks as well. This is a very low-visibility corner of IT contracting.

Doing a word search on FCW.com, I found only one article in the last 10 years that dealt substantively with IV&V, the others mostly listed vendors who had won various IV&V contracts. That one exception involved a 2011 GAO report on DHS IT contracting that noted DHS had no policies for when IV&V contracts should be awarded and "were unaware of the extent to which [IV&V was] being used on major IT acquisition programs, associated expenditures, or if those expenditures are producing satisfactory results." How successful is this kind of contracting in helping the government? Should government be looking to use it more, or to apply it to a wider array of contract management activities?

(3) Personal services contracting. Part 37.104 of the Federal Acquisition Regulation prohibits "personal services contracting" without specific statutory authorization -- defined as situations where an individual from outside the organization is under more or less constant supervision and direction from a government manager, so they become like an employee.

There are legitimate arguments against personal services contracting (the official explanation is that an employee must be hired using the civil service system, not through contracting), but I think that the disapprobrium at this point may reflect ancient and now-unexamined tradition as much as anything. In 2007, the Acquisition Advisory Panel on service contracting recommended a statutory elimination of the bar on personal services contracting, but nothing ever came of this. One possibility would be to have a specific statutory exemption for personal services contracting for contract management, perhaps limited to IT.

My remarks on all these three ideas may make me sound more committed to them than I am. In all three cases, as I noted above, I actually don't know enough to have an opinion. Nor do I want to limit the alternatives to these three.

That's why I really want to get a dialogue going, involving government program and contracting folks, contractors, independent experts such at the Procurement Roundtable, or those providing advice to government on good contracting, such as ASI Government and Censeo, and the Office of Federal Procurement Policy. The idea would be to learn more so that we as a community can figure out how best to improve post-award contract management. There is a lot of money at stake in managing contracts well, or poorly. We cannot afford to do nothing.

I invite blog readers to comment on this blog or to write independently in other outlets about the subject of improving contract management. If there is anybody who has improvement ideas that you would like me to discuss in a subsequent post, contact me at steve_kelman@hks.harvard.edu.

Let's try to make some progress here!

Posted by Steve Kelman on Jan 11, 2016 at 11:40 AM


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