Letter: Economics, budget issues important in government affairs

Regarding the comment piece, Wagner: The cost analysis muddle, a reader writes: I have learned that most people in government, including IGs, Congressmen and ESPECIALLY their staffs, have no clue about operations costs and the way the productive world actually operates. Retired Senator Breaux, to his great credit, recently admitted he only learned of these matters now that he is in business. In my firm, I see government's business naivete; collide with reality whenever we hire government people into industry and they're stunned to see that their paycheck is eerily dependent upon company revenue. What's so spooky to them, is every day reality for the shrinking productive majority. Now that's really spooky!

The truth is Government employees live in a Socialist enclave and they develop a completely Socialist mentality. They quickly lose sight of the fact that the vitality of their unproductive enclave depends entirely upon the success of the United States economy. Unfortunately, their Socialist mentality increasingly hinders the economic success of every productive venture they touch. This Socialist mindset is bad for government and worse for the rest of us.

There is some truth, however, in the notion that an already budgeted office can either be used or not used. In fact, we have seen DOD and DHS organizations make it very hard for their managers to contract via any other agency's contract organizations or vehicles. After all, agencies have built the contract shops and contracts. Why not make people shop there?

The answer to that question (for the benefit of those who apparently slept through Microeconomics) brings us back to the former Soviet Union. That's where government would decide that everyone in a given part of Moscow had to buy at their assigned local meat shop. After all, the meat shop was subsidized; so why not force people to shop there to guarantee the shops would stay busy?

The problem is when everyone in an area has to shop at a particular store, the butcher gets smug and comfy with his monopoly. Customer service, if it ever existed in that shop, evaporates.  Since every part of Moscow needs its own shop, the supply of qualified butchers is strained. Soon, some shops have only unqualified butchers. Service goes from just bad, to slow and bad. Long lines form.

If you are a DOD or DHS manager with general acquisition needs in this wartime environment, all this Soviet-style inefficiency may sound frustratingly familiar to you. Unlike IGs, Congressmen, and the GAO, you understand that sloppy service and long wait times represent cost. 

In the U.S. Federal acquisition environment, the question becomes why does every government organization need to budget for contracting shops and independent IDIQ contract operations, when another government agency has been established to specialize in general acquisition? Astonishingly, in one of the most spectacular innovations in the history of government anywhere, this "other government" Agency has been using an efficient non-Socialist model for many years.  

That agency is the General Services Administration, Federal Acquisition Service.  As the name implies the GSA serves the entire government. Yes, it charges a fee but only when they it's working. Just like a business.  And just like a business, GSA refers the people it supports
as "clients."  Have you ever heard a DOD or DHS contracting officer refer to their monopolized clientele as clients? I haven't.

The answer to the question, "Why does every federal agency need its own?"; is simple. They don't! They should use GSA and stop starving it. Why are Congress and DOD trying to kill GSA by starvation? It's the Socialist mentality at work.  Our own special little Cold War rages right here in the Federal Acquisition community. 

What can be done? First, it will take some gu s and enlightened Western-style leadership.  Here are my thoughts:

1)       Industry Groups should deliver on-line training in real-world economics and it's interaction with government. Hire people like Senator Breaux to offer up their real world revelations. Fuel government interest by publicly belittling IGs and GAO officials who issue negative pronouncements based on cost with language that exhibits complete ignorance of the most basic principles of cost-benefit analysis. (The arrogance in the system needs a good dose of shame.)
2)      Ask your Congressmen and their staffers if they prefer capitalism to Socialism. (We all know their red-white-and-blue response in advance.) Then ask your Congress to read this. Then ask them which side of this Cold War they will be on.
3)      Challenge at every opportunity your senior DOD and DHS Acquisition officials into removing all their Socialist obstacles to the use of GSA vehicles and assisted services.
4)      Pressure Department heads of to offer up the costs of their redundant contracting operations as much needed savings.
5)      Stop studying and counting acquisition employees and contracts. OPM should start consolidating the contracting specialist from the Fed's Acquisition line of business in GSA.
6)      Allow the GSA Regions to compete with each other and manage their own margins. (Everyone is local to everyone in the Internet age.)
7)      Let fee-for-service offices that fail to do just that.
8)      Allow DOD and DHS clients to shop for the best acquisition support for their important missions.
9)      Remind current GSA leadership that they pretty much had it right in 2002 (even outside FEDSIM).  They should ONLY fix what was broken. Start with standard interpretations of the regulations.
10)     Fire the GSA CFO and bring back the more flexible funds management ASAP.
11)     Rationalize, clarify, and simplify acquisition laws and regulations as a matter of national security. Understand that minor and unintentional violation is going to happen. IGs should identify trends for managers.  Annual review of the trends by managers should simply drive training goals not personal vilification within GSA.
12)      Focus the IGs on egregious and clearly intentional violation of the laws. Boost the penalties for these special and rare cases to the level of treason with capital punishment. (For example, the recently convicted Senior Air Force acquisition official would have been jailed for life or administered a lethal injection for her true crime.)  
13)     Work the issue of structural inefficiency in the acquisition system to the leading Presidential candidates. (You want change? I got your change?)

The bottom line is this: Staff shortages, sloppy service, and long wait times represent an economic cost that piles on top of the wasteful budgeted costs of DOD and DHS contracting shops.  In wartime, they can constitute much worse than economic cost. This problem affects every American. It needs swift fixing.

Anonymous

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