By Steve Kelman

Blog archive

What do supermarket cashiers, gas-station attendants and the dodo have in common?


A thousand people -- about the same number as last year -- are gathering in a huge ballroom in Bethesda, Md., for the annual two-day National Contract Management Association conference, which is targeted to government participants.

Even here, though, half the participants are from industry.

With the restrictions on travel that President Barack Obama recently imposed, we may be seeing more conferences in the DC area, though I have run into some government people from farther away.
 
The most interesting plenary event the first day was a panel of four senior government contracting folks, Nick Nayak (chief procurement officer of the Homeland Security department), Nancy Gunderson (senior procurement executive of the Health and Human Services department), and senior officials from the Defense Contract Management Agency and the Defense Contract Audit Agency.
 
Stan Soloway of the Professional Services Council, who did a great job as moderator, asked the panel to name the two most important trends they saw in contracting over the next two years. Not surprisingly, Nayak and Gunderson said the pressure for cost savings from contracting was the most important thing happening.

Both predicted increasing use of reverse auctions and of strategic sourcing, including (in Nayak's view) a push to make use of strategically sourced contracts closer to mandatory. Soloway said he was hearing from his members that "best value" contracting was disappearing in favor of "low price technically acceptable" source selection, and he was worried. Interestingly, neither Nayak nor Gunderson agreed this was happening in their agencies.

As a long-time supporter of best value approaches, I think we need to distinguish between getting the best deal we can at every price point and choosing the low bidder -- a distinction I'm guessing many in industry don't make. The government should try to lower the hourly rate for Quality Vendor for a certain labor category that started at $150 down to $120, and the hourly rate for Body Shop Vendor that started at $75 down to $60 -- but then it might still chose Quality Vendor over Body Shop Vendor.
 
There was an interesting discussion of a congressional bill called the Data Act that people were afraid is gathering momentum. Everybody was afraid that the requirements of the bill, if passed, would put big time burdens on the workforce without delivering much value. I confess I hadn't heard about this legislation before -- any blog readers want to chime in on this? -- but I would make a distinction between information on contract performance, of which in my view we don't have enough, and various new reporting requirements on contract award, which in my view in a time of constrained resources don't meet the cost-benefit test.
 
Nayak made the most arresting comment, saying that 20 years ago, gas station attendants pumped his gas. Today, self-checkout is replacing cashiers at supermarkets. Some day, he said, some bright kid somewhere will figure out a way to do the “administratrivia” -- repetitive parts of the job -- of a government contracting official without needing a human being. (Indeed, to some significant extent, procurement automation systems already do so.)  The message -- at least for me, though Nick didn't seem to say it explicitly -- is:  contracting people need to find ways to add value through creative ways to structure and manage contracts, or else they will go the way of gas-station attendants. So, for example, making a contribution to reducing the budget deficit is not just a matter of professional pride and of patriotism, but of the kind of activities contracting folks need to be good at just for reasons of self-preservation.
 
By the way, as somebody noted at one of the breakout sessions about the refreshments, muffins were conspicuous by their absence. :p

Posted on Nov 15, 2011 at 12:09 PM


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