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By Steve Kelman

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Will Trump make acquisition great again?

Donald Trump at a September 2016 campaign event in Aston, Pa.  Photo: Evan El-Amin / Shutterstock.com

Photo: Evan El-Amin / Shutterstock.com

Just after the election, I wrote a blog post asking whether President-elect Donald Trump was likely to have a management agenda at all. My concern was based on the observation that most in the traditional Republican management community had not supported Trump and thus had not produced the campaign policy papers proposing any government management agenda, the way previous Democrats and Republicans had.

The FCW.com report last week that two respected IT veterans and former feds, Casey Coleman and Karen Evans, would serve on the so-called landing teams for the General Services Administration and Office of Management and Budget respectively, somewhat alleviates those concerns. But the exact role of these teams for Trump, and particularly whether participation might be a signal of whether a job was in the offing, has been somewhat unclear.

However, at this point the question of whether Trump's administration will have a formal management agenda -- a document with policy positions and priorities -- has been overshadowed by the actions of the president-elect himself, which have given procurement policy a visibility unparalleled, I think, in U.S. public management history.

In my last blog post, I noted that Trump already had been involved in two high-profile procurement issues: his contract for the Trump-renovated Old Post Office Building hotel (which my friends Steve Schooner and Dan Gordon have loudly advocating cancelling on the grounds that when Trump assumes office the contract will violate procurement regulations); and his pressure on Carrier to cancel plans to outsource jobs to Mexico (which may have involved suggestions, also contrary to procurement regulations, that Carrier’s parent UTC could lose military contracts in retaliation for moving the jobs).

Then, the day after that post was published, Trump inserted himself into yet another acquisition issue -- the military’s contract with Boeing for development and production of the next generation Air Force One. He tweeted that Boeing’s “costs are out of control, more than $4 billion,” adding the admonition, “Cancel order!”

There was a fair amount of brouhaha over this tweet. Some noted that it came shortly after a statement by Boeing’s CEO criticizing Trump’s views on trade, which could be harmful to Boeing because of the company’s massive exports to China. Trump also was accused of bullying.

The initial round of reactions also suggested that the $4 billion price tag was taken out of thin air, noting that currently the only Boeing contract for a new Air Force One is for $170 million to develop requirements for the contract. Further examination, though, showed there were indeed Air Force documents that estimate eventual total costs at around $4 billion, though most of those costs were for special features and modifications that made the plane dramatically different from an ordinary commercial 747. In all, Politifact rated Trump’s statement as “half true.”

But what really caught my eye was an article in The Wall Street Journal the next day where Trump was quoted as saying he would “personally negotiate the Air Force One price with Boeing.” This statement didn’t get nearly the attention of the original tweet. In a post on the Government Contracts at GW Law Facebook page, Professor Schooner wrote he was “speechless” over Trump’s statement. I assume he meant that as a criticism, but I will confess my reaction was much more positive.

To be sure, we don’t really know whether plane is overpriced in the first place. And clearly, the president of the United States has no time to become involved in procurement contract negotiations very often. But unlike the suggestion that the military might cancel a weapons contract with UTC if the firm moved Carrier jobs to Mexico, there is nothing illegal about the president negotiating with a contractor about their prices. Unorthodox yes, inappropriate no. The argument that it’s never been done this way before is no more convincing than when used to dump on a change effort in any organization.

Indeed, for the president of the United States to send a strong signal to contractors that he wants to be aggressive on prices the government pay is a plus, not a minus. As one commentator on the Facebook page argued, “This is good. Someone has to set an example and if no one is willing to take action let the president drive down costs!”

Beyond that, this transition is bringing unprecedented attention to government acquisition. As another Facebook commenter wrote, “I am glad that he is bringing needed attention to the contracts and acquisition field. No other president will be able to do this. Look at the discussions, interest and focus on our field now.” Trump's interest in dealmaking makes him a natural for interest in government contracting, which is of course in significant measure about that very topic, and it makes the topic a natural for getting more attention from the media and the public.

It would not be a bad thing if this attention encouraged some contracting officials to appreciate better the importance of their jobs. Nor would it be bad if it encouraged some young people starting their careers to think it is cool to work negotiating on behalf of taxpayers.

P.S. Monday morning, as this blog was coming out, Trump tweeted on the largest weapon system currently being developed, the F-35 Joint Strike Fighter. “The F-35 program and cost is out of control,” he wrote. Billions of dollars can and will be saved on military (and other) purchases after January 20th.” 

This new tweet underlines all the messages in my blog post. Trump is paying attention to contracting issues, and I do not think this is a bad thing at all. Here’s a new hashtag for tweets on Trump and procurement: #theprocurementpresident.”

Posted by Steve Kelman on Dec 12, 2016 at 1:55 PM


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Reader comments

Mon, Dec 19, 2016

Concerning the Dec. 14 comment from Ms. Davie: you are so completely and painfully polite in pushing back on the idea of questioning Trump's blast at some Federal acquisitions. But if we continue to Let the Inmates Run the Asylum we will probably never have: better contractor selections, better performance instead of today's limp standards, an end to flaming COIs that are routinely tolerated and often driven by future employment, and an increase in competition which at present levels and industry concentration are stifling the growth of new players to challenge today's staggering, stumbling Big Contractors. The comment seems to think the workforce deceives little or no scrutiny--perhaps little responsibility or accountability. Or so the comment seems in its tone. Something's up. It may not be good. But the way we do business is going to change.

Fri, Dec 16, 2016 Al

Folks, sometimes a program costs too much and someone has to kill it. We don't live in an infinite-budget environment, reality is not optional. While Trump may be right or wrong about this specific case, there should be a culture of killing bad projects. My advice is don't take this one literally, just take him seriously. It will take a lot of getting used to . . .

Fri, Dec 16, 2016 Observer

At PSC gathering and elsewhere, there seems to be a spike of concern about the new administration. Though possibly big spending for infra and Defense will occur, there is growing feeling that the Trump people will "crack down" on contractors. Wise ones will look over their shoulders more frequently. But the really savvy colleagues will realize there will be more pressure on them to price realistically and to deliver more in accordance with budgets, specs, and schedules. The industry has been delivering many jobs that have not met contract terms with little or now penalty. Sure, there is the constantly incoming tide of annoying regs, intrusive reports, etc. But that's a cost of doing business. Don't expect the Trump people to study things to death. Traditionally, the industry likes studies and complex rule making for the delays they give rise to. Trump does not need new regs to put the spotlight on waste and contractor abuse. Best to sharpen up one's operations and be more careful than ever in pricing. You may think you have a new friend of business at the White House, but you really have a more demanding customer. It will be somewhat of a new day for government contractors. Real tech companies--which almost all large contractors are not--have nothing to worry about. But the butts-in-seats crowd and others doing standard government stuff should have deep concerns and take steps to preserve profitability and reputation.

Wed, Dec 14, 2016 Mel Ostrow

Professor K and esteemed colleagues: of course Trump needs (someone else) to do the fine work before he blasts a program or contractor. In time, he will have those assistants and devote limited time to this surprising activity. But there should be no mistaking he smells the acrid rot of acquisition as done today. And while he is insensitive to some times of COI, he is obviously repelled by the collusion, as he might call it eventually, between buyer and seller to do things not in the National Interest but for reason of profit, compensation, future cushy jobs. Over runs and schedules busts are easily accepted today, and Trump knows that. Program managers change the baselines so often and cleverly that it is nearly impossible to track vendor performance. No one suffers when a program goes bad, real bad. Trump, in his crude way, is likely to press for doing much better and will try to break the continuity of "this is the way we always do it." The concept of an MCI with its sense of entitlement and ability to waste big bucks repels him. He does not like getting ripped off. The concern in the industry is palpable, and there is good reason for there to be concern. The earth might move this time

Wed, Dec 14, 2016 Mary Davie

I have major concerns about instant reactions to seemingly large costs without any facts by which the reaction that the cost is "too high" is based upon. So are we now ok with questioning the work and effectiveness of the cost and pricing and technical teams who most likely spent years conducting market research, working on technical specs, conducting competition, conducting negotiations and evaluations to arrive at what they determined to be a fair and reasonable price? This is dangerous. There's nothing wrong with bringing more attention to the procurement process and of course wanting to pay less, but I don't think that's what this is. Let's have some faith in our workforce and some respect for the complexity of what they work on before instant judgement is made.

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