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By Steve Kelman

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Procurement policy and the transition sweepstakes

Shutterstock image. Copyright: Vector Goddess.

The quadrennial process of jockeying for jobs and policy priorities that occurs when a new administration is elected is underway.

The higher-visibility sweepstakes involve political jobs in the administration. Right now, attention is focused on cabinet positions, but once those are filled attention will shift to subcabinet appointments at increasingly lower levels over time. I had some experience with this sweepstakes when looking for a political appointment at the beginning of the Clinton administration, and was amazed, from my Cambridge perch, how many people had turned their participation in the jobs sweepstakes into something resembling a full-time job. These individuals amassed letters (which still existed in those days) and phone calls to transition staff from anybody and everybody who might help them. I remember people discussing the exchange rate for different forms of endorsement -- a phone call was worth as much as several letters, for example -- and I was on the receiving end of a number of communications from other job seekers. They would note that we had known each other in, say, elementary school, and ask if I could help persuade somebody working on appointments whom I knew.

I am not looking for a job in the new administration, and I am fairly certain President-elect Donald Trump's team would have no interest in me if I were. However, I would be pleased to have some influence on procurement policy priorities of the administration.

My sweepstakes ticket for this is a memo on procurement policy I was commissioned to write last spring as part of a larger series of Memos to National Leaders. This collection of writings on various management and governance issues was published recently by the National Academy of Public Administration, a congressionally chartered society for distinguished government practitioners and university-based academics. This is an expanded version of a series of memos first published by NAPA for the 2012 election.

My report is titled, “Procurement: Focusing on Performance and Results.” I very consciously wanted my memo not merely to be a laundry list of many recommendations, but rather to consist of a smaller number of recommendations around a common theme. I chose the theme of performance and results out of a view that this would appeal to a broader audience outside the procurement system itself, rather than themes more inwardly directed to the system’s inhabitants.

I obviously wrote my report without knowing Donald Trump would become president and that he actually would appear to have some procurement policy priorities, which seem mainly to be negotiating more aggressively with contractors. This is a view with which I actually have some sympathy, but readers will not be surprised to learn that my recommendations are broader.

The recommendations are divided into three areas:

  1. develop more information about contract performance;
  2. pivot to post-award contract management; and
  3. expand forms of contracting that pay for success.

 

Here I will only discuss the recommendations briefly; blog readers are welcome to look at the link to the whole memo.

The public, and even the government, has remarkably little information to allow judgments about how well the procurement system is performing. When I was administrator of the Office of Federal Procurement Policy in the 1990s, I was frankly shocked to learn in how poor a position we were even inside the government to reach non-anecdotal judgments about overall system performance.

Much of this is due to the incredible number and variety of contracts, which makes apples-to-apples comparisons so hard. So in the report I suggested a more tractable, limited goal: disclosing to the public prices paid for commodity products or services the government buys in large contracts negotiated for governmentwide use. The benefits of such disclosure would be increased transparency and use of the data for procurement performance improvement.

Even this more limited goal is far more complicated to realize than appears at first glance. I recommended therefore that the government get its feet wet for disclosure by disclosing prices the government pays for airline tickets, small package delivery, and chicken parts for the military. After I finished the report, I came up with another idea for how to inaugurate such disclosure -- by publishing prices the government pays for the most-widely bought hammers.

Those of a certain age will recognize my reason: there was a widespread myth perpetrated in the 1980s that the government paid $600 to buy a hammer. This was completely false, but publication of the real prices, which are dramatically lower than that, would both provide information on an easy-to-understand item and also lay to rest a hoary fairy tale.

My second group of recommendations focused on increasing the attention the system pays to managing contracts after they are awarded. Post-award management is where the rubber hits the road, where contracts succeed or fail -- yet this has traditionally been a stepchild of the procurement process, lacking resources and focus. This is a theme I began promoting in this blog last year and to which I return here. I make a number of recommendations centered around upgrading the job of the contracting officer’s representative, who has day-to-day responsibility for monitoring contract performance, starting with making this more like a full-time job and less like an “other duties as assigned” add-on. The would include reinventing training for these folks to center less on regulatory requirements and more on skills in performance measurement and conflict resolution.

The kind of “pivot” I recommend cannot be achieved by one speech or memo. If this is going to happen, the procurement community at the most-senior level -- the Office of Federal Procurement Policy Administrator and the Chief Acquisition Officers Council -- must make this a project.

My third recommendation is to increase the use of contracting methods that pay for success. Right now, the pre-eminent example is prize challenges, run out of the General Services Administration site Challenge.gov by Kelly Olson. When the government issues a challenge, it outlines the results it wants and invites anyone to propose a solution. The winner or winners receive a prize -- usually cash and sometimes other forms of recognition.

This is full pay for success: The government pays out nothing if there is no successful solution. And challenges also have a demonstrated ability to attract non-traditional players as opposed to the familiar government contractor faces.

Challenges are in my view the single most-significant procurement innovation of the last eight years, and arguably of the last few decades. Obviously, they can’t be used for everything (one could hardly develop a several-hundred-million-dollar IT system with challenges), but there is still room to expand use of this innovation dramatically.

Other pay-for-success ways to contract should also be expanded (from a currently very low base). These include “pay by the drink” contracting, where a contractor develops a system for processing some kind of transaction at their own expense, and is paid once the system is up and running as a per-transaction fee. Another is share-in-savings contracting, where a contractor is paid all or in part as a proportion of the savings their effort generates.

Policy recommendations have a somewhat more vague and diffuse audience than job searches. They may be read by “landing teams” working on the transition at a given agency, and passed on to nominees for political positions. They may be read later on by actual nominees when they arrive at their agencies. Some, particularly those affiliated with a think tank or lobby group, may use organizational staff or even hired communications specialists to promote the dissemination of ideas in policy papers or media outlets.

I have no hired promoter. To get my transition ideas out there, I use my FCW blog and my Twitter feed. So readers, please take a look at my report. If you like the ideas there -- or other ideas that are coming from other transition documents -- spread the word on social media you use. This may be a new, and more grassroots, way to vet ideas for the new administration than how this has been done in the past.

P.S. With many people not working between Christmas and New Year's, I will myself take a vacation from the blog for next week. I will return the week of Jan. 2.

Posted by Steve Kelman on Dec 19, 2016 at 2:13 PM


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