Coping with contracting

Federal agencies face changes in their acquisition environments coming from several fronts, and officials are doing their best to cope with them, according to a new report issued today by the Professional Services Council.

Agencies stand to be affected by a possible change in presidential administrations, changes in Congress' makeup, ongoing initiatives such as competitive sourcing and an emphasis on performance-based contracting, changes in the business community, and various legislative and regulatory shifts, said Stan Soloway, president of the council.

As a result, "a clear, complete view of the acquisition landscape may never have been as important — or as hard to obtain," states the report, "Business As Unusual."

The report, based on council members' interviews with 36 federal officials, does not offer quantified data. Instead, its authors sought to describe the feelings and opinions of those surveyed.

Performance-based contracting was one area that drew attention, Soloway said. Agency officials, urged by new initiatives from the Office of Federal Procurement Policy, are struggling to learn how to craft contracts that leave the contractors free to determine the best ways to fulfill the agency's needs.

"We're seeing it take hold, and it is moving forward," but slowly, said Diane Shute, a partner at Grant Thornton LLP, which joined the council in conducting the survey and writing the report.

Agency officials also are grappling with a renewed scrutiny of adherence to laws and rules, fostered by incidents of abuse during the past couple years. Congress has threatened new laws, and officials at the Defense Department and General Services Administration launched the Get It Right program hoping to stave off legislation.

"I don't think we had a single interview where the person felt we needed more regulations and more laws," Soloway said. "The sense is that we have enough laws, and the people who are violating them know that they are. It's not like they're slipping through some loophole."

Competitive sourcing remains contentious, Soloway said. Agencies are supposed to identify work that agency employees do that could be done by private contractors, and open some of it to private competition, forcing the employees to prove they can do the work more effectively.

However, agency employees typically win 90 percent of the competitions, making it unappealing to private firms, Soloway said. Many of the officials interviewed said they had an average of less than two contractors bidding on a given project.

If agency employees win 90 percent of the time and two private firms bid, he noted, each private firm has only a one in 20 shot.

Many agency officials are reshaping their procurement departments, pushed by the Services Acquisition and Reform Act of 2003. Among other things, the act requires agencies to appoint a chief acquisition officer as part of an effort to unify the procurement process.

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