Incentives: Cheering on the bargain shoppers

Agencies want price-hunters and bargain shoppers in their acquisition offices so they can pay the least amount of money for what they need. But where is the motivation for a contracting officer to be the best price-hunter and bargain shopper?

These days, the negative incentives far outweigh any positive ones for contracting officers, and Joe Jordan, administrator of the Office of Federal Procurement Policy, wants to change that.

At a breakfast Sept. 11 hosted by the Coalition for Government Procurement, Jordan talked about incentives for employee for good buying, noting that employees are more often punished than praised.

He said if all the agencies compared prices for a particular laptop, the procurement officer doesn’t get a bonus for getting the best price on the laptop. On the other hand, the officer who paid the highest price might be embarrassed or the officer’s boss might be disappointed because their agency was paying more than all the rest of the agencies. Jordan asked what the added incentive was for the contracting officer to get the lowest price.

“So, there is a great negative incentive but not a great positive incentive,” he said. As administrator, he said he can make a difference there. He can properly create other good ways to drive lower prices.

In his speech, he changed subjects at that point, giving no ideas for positive incentives. However, he may be handed an idea. There could potentially be a bonus for getting the lowest price and being a bargain IT shopper.

Rep. Darrell Issa (R-Calif.), chairman of the Oversight and Government Reform Committee, is considering an IT procurement reform bill that includes monetary rewards. The bill would have administration officials establish policies for agencies to reward any federal employee or team of employees with a cash bonus, if their work warrants it. They could also get a promotion or a non-monetary award. The bill hasn’t been officially introduced in the House.

Without a cash bonus, employees still like a pat on the back or a high-five, former federal managers said.

“It’s your job to do a good job, but when someone does extraordinary [work], that should be clearly recognized,” said Roger Waldron, president of the Coalition for Government Procurement and former senior procurement executive at the General Services Administration. Recognition can make other employees believe they can do it too and it will encourage them to go beyond their daily routine.

This year, the coalition created a savings award for the acquisition workforce in its Excellence in Partnership awards.

Bob Woods, president of Topside Consulting and a former GSA official, suggested agencies should award teams for their work. There are so many people involved in a procurement, such as attorneys, the contracting officer, and the program managers. On top of that, he said, in the Federal Telecommunications Service 2000 contract, employees in the congressional affairs office had an important role in the procurement by keeping members of Congress abreast of the major endeavor.

He said people are stunned when they’re awarded.

“You want to keep it in the forefront of their mind,” he said.

About the Author

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

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