Future of procurement reform looks to past performance
- By Steve Kelman
- May 24, 1998
When reading a recent issue of FCW I was struck by three articles that dramatically illustrate the revolution in the government/vendor relationship over the past few years.
The first was a front-page story headlined "Raytheon backs off plan to sell AF IDIQ contracts." Raytheon, the new owner of Hughes Data Systems, had considered unloading the company's Air Force Desktop V contract because providing off-the-shelf PC hardware and software is a low-margin business compared to the weapons systems work Raytheon does for the Pentagon.
The article, however, reported that Raytheon had decided against selling the contract because the Air Force wanted Raytheon to stick with the contract, and "Raytheon reportedly realized its efforts to divest itself of the contracts could harm relationships with Air Force commands responsible for the acquisition of 'big-ticket' electronic systems."
The article quoted Bob Dornan, senior vice president of Federal Sources Inc., as saying, "Clearly the move to including substantial weight on past performance is well-established. It would be a no-brainer to hold it against a vendor for not fulfilling their contractual obligation."
The same issue of FCW featured an article about Federal Data Corp. buying a number of other companies. The article noted chief executive officer Dan Young's views on changes in the federal information technology marketplace. The old system was ripe for change, he stated, because protests were out of control, and agencies were having trouble getting new technology. In the new world, "the attitude that the customer can select whomever he wants is 'permeating every part of government, even to the contract shop level.'... The contract shops are using the new power to select vendors who have performed well in the past. That was not the case before reform."
Finally, in the same issue of FCW, there was a small piece about a procurement that GSA's excellent for-hire acquisition office, the Federal Computer Acquisition Center, is conducting for the FBI. "Using past performance evaluations," the story began, "a General Services Administration contract office chose four companies out of more than a dozen that have the best chance of winning a $430 million systems integration deal at the FBI."
Fedcac is out front on using the two-phase source-selection procedure authorized by the rewrite of Part l5 of the Federal Acquisition Regulation, which allows an advisory down-select without full-blown vendor proposals. The bottom line: Good past performance is important for getting a chance to play.
Three stories in one week. There also had been a letter to the editor of another publication just a week earlier taking exception to an article by a lawyer criticizing "excessive" use of past performance. The author, a retired fed, wrote to the lawyer: "You obviously have not been a government procurement official charged with following all federal rules, while at the same time getting the best deal for the taxpayers. I have, and I found past performance to be a good measure to hold contractors responsible for their actions."
There's a new world out there, and many government executives are noticing. Last week I taught a class for Harvard's Strategic Computing Program to an audience of mostly state and local IT folks and a few feds. Class members and I discussed the relationship between streamlining the procurement process and getting better value from IT investments. The class noted that streamlining allowed the government quicker access to new technology, and it saved time and energy. I think that's a positive effect. But I also think, as important as streamlining is, we should never forget that the main goal of reinventing government is to deliver better value from our programs for taxpayers. So when you think of procurement reform, don't just think about how you can get on a contract quicker. Think about innovations, such as the use of past performance, that allow the government to do things not only faster but also better.
Kelman, former administrator of the Office of Federal Procurement Policy, teaches at Harvard's Kennedy School of Government.