Agencies should create 'vendor management office,' officials urge

Federal officials and industry executives have proposed that agencies create vendor management offices to maintain close scrutiny of contractors and the quality of their work.

The President’s Management Advisory Board approved the recommendation Sept. 23 for the President’s Management Council, which the advisors have already been closely with. Jeffrey Zients, chief performance officer and deputy director for management at the Office of Management and Budget, said there is a lot of support from senior officials at departments and the council will make sure departments begin testing out these pilot offices and other recommendations from the advisory board.

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The advisory board’s industry and government members recommend that several agencies launch these pilot offices to assess vendors’ actual performance and compliance with the contract.

The purpose for the offices is to make sure companies are delivering what their contract requires of them. Enrique Salem, president and CEO of Symantec and a board member, said these offices aren’t for managing a project, but for overseeing contractors.

Under this recommendation, the pilot offices would be connected to both an agency’s central IT office and its acquisition office, among other parts of the organization handling the business operations, to get a broad view of what's happening throughout the agency.

In developing the recommendations, the advisory board’s IT vendor subcommittee found that with agencies lacking a broad view of an agency's operations, “vendors take advantage of a siloed environment that enables redundant technologies to ‘sprout like weeds.’” As examples, government’s agencies use hundreds of different human-resource and financial management systems, as well as project management and identity management systems.

“No doubt, we are being taken advantage of by vendors by virtue of the fact that we don’t have that bird’s eye view across our enterprise,” said David Hayes, deputy secretary of the Interior Department, during a board discussion.

The proposed offices would help a department’s disparate offices understand that they need a centralized view of what’s happening around them, he said.

But strategic sourcing and buying in bulk can save money, along with watching contractors closer.

For the new offices, agency officials would have to set clear cost savings goals.

Salem said when private-sector companies decide their cost savings expectations, they realized afterward the goals could have been higher.

“Once you get a focus on this area, it’s amazing how rapidly you are able to squeeze such savings out of the vendor side,” Salem said.

As important though, the pilot offices would need to hire employees who are experts in the IT field. Those employees need that proficiency to oversee vendors and the complex projects. Federal managers, at times, defer technical issues that affect a project's performance to the vendor because they lack the expertise.

In addition, the advisory board found that money and timetables get most of a manager’s attention. Project managers typically focus on keeping their project on budget and on schedule. However, they struggle to evaluate the quality of the vendor’s work and whether companies are meeting the agency’s business needs.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.


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