By Steve Kelman

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Live blogging from the National Contract Management Association World Congress

The Gaylord Opryland Hotel and Convention Center, site of the World Congress of the National Contract Management Association.

I am at the Opryland Convention Center, in a very rainy Nashville, Tenn., for the World Congress of the National Contract Management Association (NCMA) – the association for government contracting professionals in government and companies.

I arrived late Sunday and quickly proceeded to a barbeque dinner just off-site. I immediately noticed just how little the restaurant patrons "looked like America" – it was pretty much a sea of middle-aged white faces, with no blacks, and I did not see any Latinos. The only Asian-Americans were at my table. So it seems country music still attracts only a limited constituency.

The conference is huge (a wild guess from a plenary this morning is perhaps 700 folks, though I don't regard myself as an estimation expert), but government attendance is way down – 75 percent from last year, according to some of the government employees in attendance. They told me that their attendance needed to be approved by the agency head or another high person in the organization as being "mission-critical." I have run into three government people so far who are paying their own way to be here!

Beyond the conference hysteria, another government attendee told me he felt very stressed because he felt attending the conference was very important for doing his job better, but he felt guilty that the few thousand bucks the conference cost could have gone into a pot to reduce furloughs at his agency. This is the sad reality for civil servants in the sequestration world.

Two interesting things I learned this morning:

First, during a plenary session on selling to governments outside the United States, Steve Schooner, the George Washington Law School procurement professor and panel chair, asked the audience whether NCMA should itself encourage participation and membership from non-U.S. government contracting professionals. As of now, the so-called "World Congress" is like our baseball "World Series," an essentially all-American event. Only a few said NCMA should not do this at all; the rest were about equally divided between "yes, but cautiously" and "yes, aggressively." (As a sidebar, this probably reflects the personality split among government contracting professionals about how they in general approach life.)

Listening to Schooner, I became an instant convert to "aggressively." Ten years ago, the meetings of the academic associations for professors studying management in general and public management in particular were nearly 100 percent Americans. Now they are about a quarter non-Americans, with that share split almost equally between Europeans and Asians. The simple reason is that U.S. universities and U.S. research in the social sciences are generally regarded as the best in the world, and non-Americans want to learn from the research and research environment of America's universities.

Similarly, for all our problems, the U.S. government's procurement system may be the best in the world – and certainly is one of the best. Many countries trying to improve their systems, particularly in developing countries, have a dramatic shortage of trained and qualified contracting professionals. It would be a real win-win for NCMA to open itself up to more international participation. A win for NCMA because this could be a source of additional revenue. A win for international participants because these conferences focus on training in contracting best practices. NCMA, go for it!

Second, I had a conversation with a former military officer who has been working for a company that provides big-ticket subsystems for weapons platforms. One of the subsystems they sell is exactly the same item as the company also sells to commercial customers in the commercial marketplace. When they sell this item to the government, they face competition from other firms providing the same type of items, and the item is sold at a fixed price. He told me that they are continuing to sell this item under Part 12 of the Federal Acquisition Regulation, governing commercial items, which precludes gathering government-unique cost information and somewhat simplifies the contract.

However, he said, the contracting officer more and more feels he is going out on a limb to buy this item as a commercial item, even though it is off the shelf. The mood in the Defense Department has shifted back towards acquiring using old-fashioned, highly regulated procedures that make it very unattractive for commercial vendors to sell to the government, which is bad for the government and for taxpayers.

He also told me that his company had started in 1998 by converting a bunch of contracts for aerospace spare parts that were identical to parts widely sold in the commercial marketplace, and had not been developed at government expense, into one commercial contract. Prices went down, lower every year to follow price declines in their commercial sales, and contract administration was much easier for the government. But a few years ago the government customer converted the contract away from a commercial contract to a government-unique contract, again due to pressure against commercial item acquisitions.

There were certainly some abuses in overly wide definitions of "commercial items" in the late 90's, but this does not justify the Defense Department's dramatic swing in the other direction now. One thing that OFPP could do about this is finally to implement the provisions of the Federal Acquisition Reform Act of 1997 removing special provisions for commercial off the shelf items, commercial items that are identical to those sold in the commercial marketplace, so that at least straight off-the-shelf items are protected from the bad environment currently existing in DOD.

Posted on Jul 22, 2013 at 3:34 PM


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