By Steve Kelman

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A constructive new industry report on improving tech acquisition

Shutterstock image: acquisition merger.

When I was in the government in the 1990s as administrator of the Office of Federal Procurement Policy, it was a pleasure to work with the IT services industry's trade association, the Professional Services Council.  What was so refreshing was PSC's ability to move beyond special pleading for its member companies and seriously consider what was good for the government and taxpayer, and generally to support the procurement reform initiatives the Clinton administration had developed from a taxpayer perspective.

This went so far that I vividly remember a time when the group’s head came to my office and sheepishly stated he was coming to talk about an issue that was important for his members, but not very important to the government (though he didn’t think it hurt the government). Was that ok, he asked? The tone of my dealings with PSC was very different from those with defense industry trade associations, which were much closer to a “what’s in it for us” approach.

PSC is again up to its (good) old tricks with a new report called Delivering Results: A Framework for Federal Government Technology Access and Acquisition. The report frames its overall discussion by presenting as its first guiding principle, “A Common Goal – The Common Good.” Companies want “to help the federal government deliver more effective mission results for the citizens of our nation.” A great place to start!

To me, a good example of PSC’s broader approach is the report’s endorsement of cloud computing, “which gives government the ability to have more rapid access to new ideas while simultaneously eliminating the need for large, up-front capital investments.” Cloud computing is almost certainly often a good idea for the government. And to be sure, cloud computing will provide business opportunities for many IT firms. But there clearly will also be IT industry losers that have large sunk-cost investments in expensive, build-your-own application development -- from a self-interested perspective, this firms would hardly be expected to be enthusiastic.

Most of the report’s proposals would improve government contracting. One suggestion is to include an “innovation template” in those RFPs where innovation is a goal for an acquisition.  Such a template, PSC argues, “can be populated by bidders to call-out specific innovations included in their proposal, their individual and collective costs, and expected returns on investment.” The report also suggests that, “where relevant, RFPs explicitly allow for alternative proposals that will be fully evaluated and scored.” Another very helpful suggestion is to require “post-award ‘kick-off meetings’ between all key government stakeholders and the contractor as a means of ensuring common understanding of requirements and establishment of performance baselines and expectations.” Many agencies do this already, but not all.

Given my views on the potential importance of past performance in the acquisition system, I very much welcomed the proposal that “prime contractor past performance, including relevant commercial past performance, should be a key metric on all solicitations.” I very much wish, though, that PSC had gone the further step of being willing to relinquish a contractor’s ability to get a higher-level review in favor of an ability to have a rebuttal placed in an online contract record, a willingness they sadly and mistakenly have not been willing to voice in the past.

As Jonathan Messinger pointed out in his discussion of the PSC report for the Public Spend Forum, “A number of the recommendations are, of course, what could be called ‘industry-friendly’ suggestions. … That’s not to say those aren’t good ideas or to dismiss them, simply that those likely aren’t recommendations that the government would see as urgently needed.”

The report also frequently emphasizes the need for cooperation between government and industry.  I basically agree with that message. However, despite good will and cooperativeness on both sides, there are always going to be some areas where profit-seeking companies will have an incentive to behave in ways not in the customer’s interest, so cooperation cannot and should not preclude government monitoring. Cooperation is all well and good, but if less-upright contractors are able to get away with taking advantage of the government, this both reduces the ability to cooperate in the future and disadvantages more-conscientious firms. Some version of trust but verify -- hopefully not an overbearing one -- needs to be applied.

Stan Soloway, the longtime head of PSC, will be leaving December 31. Here’s to hoping his successor continues in his public-spirited footsteps.

Posted by Steve Kelman on Dec 17, 2015 at 12:47 PM


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