By Steve Kelman

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Who would want the OFPP job now?

It was very disconcerting to see President Obama rushing to schedule a media event and issuing a memorandum to agencies on government contracting – before any of the administration’s management team is in place. Due to the unfortunate withdrawal of Nancy Killefer as Deputy Director for Management in the Office of Management and Budget, there is currently not even a nominee for this position.

The person in this position would normally be in charge of recommending an administrator for the Office of Federal Procurement Policy (OFPP, the job I held in the Clinton administration from 1993 to 1997). Given the timelines here, it is unlikely there will be an OFPP administrator on the job before September 30, the date by which Obama wants agencies to submit their plans for executing the action items in the presidential memorandum.

The presidential memorandum seems basically to be a fleshing out of various campaign remarks about “no-bid” (sole-source) and cost-reimbursement contracts. But in an area as technical as procurement, it is not a good idea simply to translate campaign rhetoric into the nuts-and-bolts of government management. It would be hard to find a contracting expert who regards “no-bid” contracts as even among the top ten problems facing the procurement system.

The president’s remarks note that cost-reimbursement contracting has doubled in the past eight years, suggesting a phenomenon that has spiraled out of control – except that all contracting has doubled over this period, so the share of cost-reimbursement contracting hasn’t risen. I think I am more sympathetic than many to the idea that the government should aggressively be looking for opportunities to issue more fixed-price contracts than we do, particularly on repetitive service requirements and even perhaps some software code development, but I believe (and I suspect most contracting experts would agree with me), that it is a higher priority to seek to increase use of performance and cost incentives in cost-reimbursement (or time and materials) work than to attack cost-reimbursement contracting per se across the board.

While many contracting experts would endorse the thrust of the administration’s approach to major weapons systems procurement, we know from long experience that these changes are extraordinarily difficult to implement – or they would have been implemented a long time ago. There are no silver bullets for many of the dilemmas of weapons system contracting.

The presidential memo is silent on issues that are a higher priority for contracting experts, such as the size and skills of the acquisition workforce, the challenges of improving contract management, commercial item acquisition, performance-based contracting, and even cost-cutting efforts such as reverse auctions.

This is not a memo that would have been guided by professional contracting experts, inside or outside government.

With a procurement policy agenda outlined before the government’s procurement leadership is even nominated, much less confirmed, it is hard to see who is going to want the job of OFPP administrator.

Posted by Steve Kelman on Mar 04, 2009 at 12:08 PM


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