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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Reader comments

Wed, Oct 21, 2009 Conor Brankin www.crossvale.com

Ensuring that Past Performance is Meaningful is very important. Moreover coupling Past Performance with Accountability mentioned by Jaime above is key. That is, the vendor should not only be able to boast of Past Performance successes, the evaluation committee should be able to easily find and analyze Past Performance failures.

Sun, Oct 4, 2009 Jaime Gracia Washington, DC

Accountability needs to be at the heart of reform to ensure execution and programs are held to cost, schedule, and performance objectives. Although I agree with most of Dr. Kelman's ideas, I do not believe they can be implemented successfully anytime soon unless the skills and capabilities exist in the acquisition workforce. The current focus seems to be more on numbers. Also, what is the beef with POGO? I usually find their work to be impressive and thoughtful...

Fri, Sep 4, 2009

The idea of using contests is a good one in my opinion. A potentially showstopping impediment is the generalized notion held by many that such competitions may be unfairly conducted. The argument generally takes the view that fairness dictates that all contestants be treated exactly the same in all respects. This limits the potential for the sort of inventiveness and creativity that fostered the Wright (pun intended) design. If this were baseball (yeah I know it's not), we would hold tryouts to see what each player brings to the team. We wouldn't put each of them on the field at the same time at the same position in the lineup because each brings a different set of skills and is at a different stage of his/her own development as a team member. In sum, the competition need only be designed to treat each contestant equitably, not exactly equally. Just my 2 cents.

Fri, Sep 4, 2009 Rich Wilkinson Herndon, VA

Here's a way to improve procurement. Start an undergraduate program leading to a degree in acquisition. Part of the "crisis in the acquisition workforce" is a direct result of the absence of such a program. Today, the only source of acquisition expertise is to the Government's own training programs. If there were college level programs in acquisition, maybe the academic world would come up with an idea or two we haven't though of.

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