2009 Federal List

5 ways to improve procurement

These are the best ideas that nobody is talking about

There are a lot of ideas out there for improving the government’s procurement system. Some seem intelligent (better requirements discipline), while others make little sense or deal with non- or low-priority problems (reducing no-bid contracts).

Here are five suggestions that deserve more attention than they are getting. Most could be implemented relatively easily.

1. Make past-performance evaluations more meaningful. As long as neither outstanding nor mediocre performance is significantly differentiated, past-performance reports will not provide a meaningful incentive for contractors. Eliminate the Federal Acquisition Regulation language that allows a contractor that doesn’t like the evaluation to appeal to a higher level; let them just enter a critique in the file. For large contracts, bring in interviewers trained in eliciting differentiated information to guide evaluators through report cards.

2. Reward vendors for suggesting cost-saving ideas. Before issuing a request for proposals, give potential bidders an opportunity to suggest requirements changes that would result in big cost savings with little performance penalty or recommend other ways the agency could structure the contract to save money. Make the quality of suggestions an evaluation factor for proposals.

3. Revive share-in-savings contracting. In a share-in-savings contract, the vendor is paid, all or in part, based on the savings it generates through the contract. The approach was the subject of a vicious defamation campaign by the Project on Government Oversight — whose officials would rather have a contract fail than see a vendor make a profit — and benign neglect (at best) from the Bush administration. A legal authority that eased the path to share-in-savings lapsed several years ago. In an age of trillion-dollar deficits, it’s time to bring it back as a tool in the contracting toolkit.

4. Use contests as a procurement technique. The Wright brothers developed their airplane in response to a contest in which the first to develop a lighter-than-air flying machine received a prize, and the Defense Advanced Research Projects Agency has successfully used contests for developing all-terrain vehicles. In appropriate situations, contests can elicit a sum of effort from industry and individual inventors that is disproportionate to the cost to the government.

5. Make successful contract management experience a promotion criterion for program officials. Becoming a contracting officer’s technical representative needs to stop being a job assigned to the person who was sick for the meeting in which COTRs were chosen. In 21st-century government, it is a crucial job. To be fair, you’d never know it from the boring way it is described in training programs. Changing COTR training would be proposal No. 6 if I weren’t limited to five.

About the Author

Kelman is professor of public management at Harvard University’s Kennedy School of Government and former administrator of the Office of Federal Procurement Policy. Connect with him on Twitter: @kelmansteve

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