Driving Progressive Procurement Driving Progressive Procurement by mmcsx

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Procurement
   Acquisition Services Directorate Guides Agencies
   Trained Professionals Key to Government Acquisition Success
   BTA Delivers Business Services on Time, on Budget
   Industry Faces Challenges in Government Contracting


Driving Progressive Procurement
SPECIAL REPORT: Procurement
By Jeff Erlichman

The current Procurement process isn’t optimal for what the federal government needs, and the Administration is
committed to transforming it.

For IT, the process can be as simple as making a phone call and giving a government authorized credit card number.
Or it can be as complex as issuing line after line of detailed requirements and then evaluating competing offers from
hundreds of vetted suppliers. Both are types of Procurement.

Procurement is the acquisition of goods and/or services at the best possible total cost of ownership. A good
Procurement buys a quality product or service in the right quantity, at the right time, at the right place and through
the right source using an approved contracting vehicle.

It sounds straightforward doesn‟t it?

The Administration Acts
So, why on March 4, 2009 did President Obama tell government to use fixed-price contracts rather than cost-based
contracts? Why is he asking OMB to come up with new government wide guidance governing the use of all types of
contracts and what are the parameters for outsourcing, by September 2009?

Federal CIO Vivek Kundra told an AFCEA meeting audience that “the current Procurement process isn‟t optimal for
what the federal government needs, and this administration is committed to transforming that.”

He further said “the Data.gov Web site will enable the public and industry to access agency data and create new
solutions the government can use. Democratizing agency data could help the government save money.”

What Kundra proposes is to use a combination of “improved access to information, better-defined requirements and
more accountability” to improve Procurement.

But if it were just that easy! On using fixed-price contracts, Harvard professor and former OFPP administrator Steve
Kelman wrote recently in Federal Computer Week:

“There are two potential problems, distinct though often mixed together. One is a situation in which the government
knows what it wants, but it‟s unclear how much effort it will take a contractor to meet the requirement... A second
kind of problem is where government isn‟t, or can‟t be, specific about what it wants. In such situations, a fixed-priced
contract is meaningless, because it is unclear what the
customer will get for the price.”

Kelman believes there are opportunities for increasing fixed-price contracting. “For example, some requirements get
competed and re-competed without changing dramatically. It should be possible to convert these projects to fixed-
price.”

Both Kundra and Kelman said part of government‟s problem partly lies with poor requirements from the federal
government.

A poorly specified requirement will produce a poorly delivered service. Requirements changes, which are common,
then require negotiating change orders in a sole-source environment, potentially negating benefits of a fixed price
according to Kelman.

All of this sounds as if there is a lot of work to do. So, what is government currently doing to meet the goals of the
Obama Procurement memo and employ a Procurement process that works for everyone – buyers, sellers and
taxpayers?

A New Direction in Government Contracting

On March 4, 2009, President Obama issued a Memorandum for the Heads of Executive Departments and Agencies on
Government Contracting. It promises to alter the way government buys IT equipment and services.

Below are excerpts from the memo:

The subject: Government Contracting.

Excessive reliance by executive agencies on sole-source contracts (or contracts with a limited number of sources) and
cost-reimbursement contracts creates a risk that taxpayer funds will be spent on contracts that are wasteful,
inefficient, subject to misuse, or otherwise not well designed to serve the needs of the Federal Government or the
interests of the American taxpayer. Reports by agency Inspectors General, the Government Accountability Office
(GAO), and other independent reviewing bodies have shown that noncompetitive and cost-reimbursement contracts
have been misused, resulting in wasted taxpayer resources, poor contractor performance, and inadequate
accountability for results.

When awarding Government contracts, the Federal Government must strive for an open and competitive process…

It is the policy of the Federal Government that executive agencies shall not engage in noncompetitive contracts except
in those circumstances where their use can be fully justified and where appropriate safeguards have been put in place
to protect the taxpayer. In addition, there shall be a preference for fixed-price type contracts. Cost-reimbursement
contracts shall be used only when circumstances do not allow the agency to define its requirements sufficiently to
allow for a fixed-price type contract...

I further direct the Director of OMB, in collaboration with the aforementioned officials and councils, and with input
from the public, to develop and issue by September 30, 2009, Government-wide guidance to:
(1) govern the appropriate use and oversight of sole-source and other types of noncompetitive contracts and to
maximize the use of full and open competition and other competitive procurement processes;
(2) govern the appropriate use and oversight of all contract types, in full consideration of the agency‟s needs, and to
minimize risk and maximize the value of Government contracts generally, consistent with the regulations to be
promulgated pursuant to section 864 of Public Law 110-417;
(3) assist agencies in assessing the capacity and ability of the Federal acquisition workforce to develop, manage, and
oversee acquisitions appropriately; and
(4) clarify when governmental outsourcing for services is and is not appropriate, consistent with section 321 of Public
Law 110-417 (31 U.S.C. 501 note).



C-Level Commitment
Procurement begins with the acquisition process.

At the CIO level, there is a concerted effort for these senior officials to promote continuous learning and professional
development for the IT workforce. One way this manifests itself is through the Clinger-Cohen Core Competencies and
Learning Objectives that call for CIOs to “ensure that the knowledge, skills and abilities represented in each
competency are resident within their organization.”

The competencies include the skills to: develop acquisition strategy; use acquisition models and methodologies, from
traditional to streamlined; perform post-award IT contract management; use IT acquisition
best practices; and manage software acquisition.

At the same time The Chief Acquisition Officers Council provides a senior level forum that promotes effective
business practices. The goal is to ensure the timely delivery of best value products and services to the
agencies, achieve public policy objectives, and further integrity, fairness, competition, and openness in the federal
acquisition system.

Acquisition Community Assessment
Procurement policy may be made at the senior levels, but for Procurement policy to be effective it has to work
practically in the trenches.

Col. Steven Burden is the program manager for the Army‟s Joint-Automated Identification Technology program. PM
J-AIT is the Army‟s RFID technology leader, providing provide global asset tracking, Web-based RF-ITV services, and
complete program life cycle support. He buys what Warfighters use on the ground.

In a recent interview with 1105 Government Information Group Custom Media, he talked about Procurement and
what advice he would give to IT buyers.

“We in the acquisition community need to carefully think about who exactly the end user is and the types of
environments they will be operating in before making Procurement decisions. It is very easy to decide that a solution
that appears to be less expensive up-front has long-term costs due to sustainability that make it the least cost-
effective.”

Col. Burdon further advocated open communication with the requirements community on whether the
recommendation for a solution is a want or a need. Due to unrealistic requirements (there is that word again) the
acquisition community has often gained a reputation for delivering solutions too late due to unrealistic requirements.

“Finally, keep engaged with the commercial marketplace. There are a lot of companies that are making IT solutions
that are „off-the-shelf‟ that can be the 75% solution now rather than the 99% solution a year from now.”

An Expanding Workforce
Procurement is dependent on an educated, professional workforce – and having more of them. For example when it
comes to fixed-price contracts, Kelman wrote “government needs to understand that more fixed-price contracting
requires more acquisition professionals to develop requirements.”

DOD agrees, predicting more employees and a larger role for the Defense Department‟s acquisition workforce. They
have launched an unprecedented acquisition workforce growth initiative to increase the acquisition community by 15
percent to 20,000 people through fiscal 2015.

And because DOD needs to adhere to the Obama Procurement memo, they are moving to draw clear lines between
what is inherently governmental and what is not. They plan on changing nearly 11,000 contractor support positions to
full-time government employees.

Procurement is the acquisition of goods and/or services at the best possible total cost of ownership. A
good Procurement buys a quality product or service in the right quantity, at the right time, at the
right place and through the right source using an approved contracting vehicle.

Those 11,000 are most likely to need education and training. For that they will turn to organizations such as the
Defense Acquisition University (DAU) or the Federal Acquisition Institute (FAI). These organizations provide the
hands-on knowledge and professional accreditations needed to make the Obama memo not just another White House
memo that the rank and file tepidly embraces.

Read More
Procurement touches everyone. This 1105 Government Information Group Custom Media exclusive report will focus
on the different groups that are involved in the day-to-day business of Procurement.

So, if you are an IT buyer, you need to know what types of Procurement vehicles are available to use and learn about
organizations such as the Acquisition Services Directorate. Read the article titled “The Vision Is Becoming Real” for
answers to those questions and more.

If you are an IT vendor, what are your concerns? Read this article “It Takes Two To Tango”.

If you are a government agency, what best practices can you follow? Detailed examples of “A Transformational
Agency”.

And if you‟re looking for a career in Procurement, then look to this article “Be America‟s Buyer” for direction and
insights.
 Jeff Erlichman is a freelance writer for 1105 Government Information Group‟s Custom Media unit. This Snapshot report
  was commissioned by the Custom Media Group, an independent editorial arm of 1105 Government Information Group.
Specific topics are chosen in response to interest from the vendor community; however, sponsors are not guaranteed content
  contribution or review of content before publication. For more information about 1105 Government Information Group
                         Custom Media, please email us at GIGCustomMedia@1105govinfo.com

								
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