Acquisition reform: Some progress, more to be done

President Clinton and Congress ushered in a new era in federal contracting last year by fundamentally revamping the way the government buys goods and services.

The legislation shepherded by ex-Senator and current Defense Secretary William Cohen (R-Me.) and former Rep. William Clinger (R-Pa.) promised to revolutionize the way government and private industry do business together at every level. The General Accounting Office has estimated that the reforms could reap taxpayers a $36 billion windfall every year.

But one year later forecasts of dramatic change and billions in savings are running up against the reality of incremental progress. Gains have been made - the government is buying higher-quality goods and services more reasonably than ever and availing itself of new information technology - but there's still more to be done.

Put bluntly the laws are right on target but implementation needs further attention. Throughout government procurement officials have seemed reluctant to fully embrace the most important tools handed to them with last year's package of laws and regulations. These tools challenge contractors to bring innovation and savings to government. They include:

* The "quick down-select" process that empowers agencies to quickly determine which contractors are most qualified to perform the work.

* Immediate negotiation procedures that allow officials to approach the contractor with requests for changes to a proposal.

* Contractual "off ramps" that allow procurement officers and contractors to sever dealings under certain conditions.

Procurement officials are embracing many new laws including full-scale pilot projects that would pay contractors based on how much the government saves. Such programs have been road-tested successfully at the state level but the most exciting prospects have yet to be implemented. For example the Internal Revenue Service has announced it is willing to explore such an innovation in its Tax Systems Modernization program. This is an important first step and the hope is that it will inspire other agencies to follow suit. Yet few federal agencies have fully implemented the laws.

Steven Kelman outgoing administrator of the Office of Management and Budget's Office of Federal Procurement Policy has acknowledged these issues but the reality is this: The Clinton administration and Congress need to be more aggressive or else acquisition reform will become yet another law marked by the best intentions but unsatisfactory results.

Here's what they can do to advance the results attained so far:

* Appoint another visionary leader. Kelman plans to return to academia this month. Crucial to the continued success of procurement reform is a similarly aggressive official whose appointment inspires the bureaucracy to get on board. One official who has helped this issue come to the forefront of government reform is Robert Welch the Treasury Department's director of office procurement who was a key player in promoting Vice President Al Gore's "reinventing government" program. New congressional leadership such as that offered by Rep. Steve Horn (R-Calif.) is needed to continue the vigilance and passion for reform. However in order to achieve true acquisition reform compliance is needed in all areas of the federal government not just at OFPP.

* Increase congressional participation. Congressional oversight is necessary to sustain reform. Congress also should reward agencies and employees that use the new procurement process to secure the best deal for taxpayers. When a procurement results in an increase in revenue or operational efficiencies a percentage of the benefit should be returned to the agency to fund other innovations.

* Eliminate the protest process. Kelman told Congress in 1995 that the bid protest process is inefficient and a disincentive. Contractors need to recognize that the protest process discourages innovation.

* Recognize and prepare for cultural challenges. Managers agency directors members of Congress and contractors alike need to educate their staffs and actively encourage them to take advantage of the laws.

After years of effort a new federal procurement system is in place. President Clinton and Congress now need to spend as much time making sure the legislation is implemented as they did crafting it. The administration and Capitol Hill also should encourage and reward those agencies as well as officials that embrace these innovations.-- Rohleder is a partner at Andersen Consulting Washington D.C. a global management and information technology consulting firm.