Kelman: Changes of mind on the GSA scandal

Steve Kelman

In my last blog post, I discussed preparing a class in my introductory management and leadership course for Kennedy School master’s students on the implications of the GSA conference scandal from last spring for how government is organized and managed – in particular how problems like this, and the way the media report them, places a premium in government management on control. (A student from GSA in an executive education program post-scandal reported needing to get 10 signoffs on travel expenses to come, even after participation in the program had been approved.)

I started the class with two quick polls. First I asked those students who had followed the scandal when it broke last spring what their initial reaction had been, with the three alternatives being:

  1. This is terrible, and it’s typical for how government agencies behave;
  2. This is terrible, but it’s not typical for how government agencies behave;
  3. The media is presenting this as a much bigger problem than it really is.

I then gave them the same three alternatives for their views as of the start of the class, after taking their management course so far this semester and reading the background materials on the scandal (the IG report, television coverage, Martha Johnson’s resignation, some congressional testimony, and some “leaked” conference videos from Huffington Post).

The responses were interesting. Their reactions from last spring were:

  • 21 percent terrible and typical;
  • 61 percent terrible but not typical;
  • 18 percent media exaggerating the problem.

After taking part of the management course and reading the material, their opinions had evolved somewhat, though not dramatically:

  • 13 percent terrible and typical;
  • 69 percent terrible but not typical;
  • 19 percent media exaggeration.

To put it mildly, I make no claim that these views – especially the initial reactions from last spring – are representative of the American people. But, especially given that we see a problem of skepticism about government among our students that parallels, although at a much lower level, currents in society as a whole, it was interesting to me that only 20 percent of our students had thought these events were terrible and typical, which to me is good news.

I had the students talk among themselves about the poll results, putting one student from the media-exaggeration camp into each group, and then had the groups brief the whole class. The points the advocates of media exaggeration made that their fellow students found the most convincing were that this involved a tiny amount of money in the government’s budget, and that members of Congress who can’t agree on a deficit reduction deal should be the last to complain about waste at GSA.

We talked about media coverage. I showed them the Google hits I mentioned in my previous blog – that this scandal had gotten infinitely more media attention than the substantive issue GSA head Martha Johnson was spending her time on. One student stated that this was how the media covered business too. I noted that especially in recent years there has been far more critical and hard-hitting coverage of business, but the media still paid significant attention to reporting about quarterly earnings reports, new products, and the substance of the business, in a way that gets done less for government agencies. A student who had been a journalist argued that the media behaved this way because this was what people wanted to read or see – this was being driven by media consumers more than anything.

Finally I put this scandal into the context of what we had been studying about rules vs. empowering employees in the design of government organizations. This kind of environment – and also, as a student had noted in the previous class, the higher ethical standard to which government is held – produces a situation where control becomes a very large element of managing government organizations, and where rules and procedures are used to increase control even if they lower the ability to shine and do a good job.

How to manage in this environment, I asked the students?  A number of students were enamored of a reading I gave them by Robert Simons, writing 15 years ago in the Harvard Business Review about “management control in an age of empowerment.” Rules should set boundaries of the unethical and unacceptable, and tell people they must not go outside those boundaries, Simons argues. But inside the boundaries, give people as much room as possible. That is perhaps the wisest lesson to draw from a sad situation.

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

Tue, Dec 11, 2012

I am a small business and can not stand FedBid and have complained to the VA without any response. Fedbid customer service is extremely poor. I was the lowest bidder on one of their reverse auctions and lost it because the FEDBID Customer service rep never sent the proper documents to the buyer. It also cost me future orders because the Federal Prison was standarizing that product. All you have to do is look at who owns FedBid, who is on the board and where they are located and you can figure out why they are being shoved down everyones throats. Our Government helping their Big buddies make money. FedBid has made more in fees on some bids then I actually made and I had to ship the product and wait for my money. Fedbid blocked me from bidding because I would not pay them their fee on a contract until the order shipped and the customer did not want it to ship for 8 months because of construction. They cost me business and did not even care. They are a scum company that does not care for the Small Women Owned business or any small business for that matter as long as they get their money. Why do we have purchasing agents in Government, FedBizOpps, etc. just to have everyone send it to FedBid. We either need to get rid of FedBid or a lot of Government Employee Positions because the tax payers are paying more money for products because of FedBid. Someone needs to investigate this company as it is a joke.

Sun, Nov 4, 2012 Scott Reston, VA

Even worse than harming SBs, Fedbid actually costs the government more money than it would spend in the traditional GSA '3 quote' methodology. Somewhat amazed that the government hasn't figured this out yet. It took industry about 3 minutes yo figure out how to work the ridiculous reverse auction platform. Imagine not having to give your best price up front, but rather being able to wait and see if anyone gets close to where you are willing to go. On top of that, most agencies pay a 3% fee to FEDBID for the privilege of paying more money for the same products. DOS is especially affected given the CPO's reliance and outright endorsement of FB, even if they are only paying a 1% fee.

Mon, Oct 22, 2012

Dr. Kelman, who sits on the board of FedBid should devote some of his time and attention to how that entity's policies, vis a vis Reverse Auctions are negatively affecting small business concerns. Some contracting officers have abdicated their responsibilities to FedBid which becomes the 'tail that wags the dog.' Requests by SBs result in canned, trite responses which appear to stonewall legitimate requests for information. Once Congresss turns its attention to FedBid, it'll make the GSA scandal look like small potatos.

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