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Unleashing Change: A Study of Organizational Renewal in Government  by Steven Kelman, Brookings Institution Press, 2005, 308 pages, $29.95 (paperback), ISBN-13: 978-0-8157-4899-1, ISBN-10: 0-8157-4899-X

Reviewed by Vernon J. Edwards

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Those who buy Steven Kelman’s new book looking for a personal account of the acquisition reform movement of the 1990s will be disappointed. The book is not a memoir, but a social science treatise. Kelman’s purpose is not to recount his personal experiences as a reformer, but to challenge the prescriptions for organizational change offered by management "gurus" like John P. Kotter, who claim that people resist change and that leaders must induce change by changing attitudes and using "shock and awe" tactics.

Using acquisition reform as a test case, Kelman—the Administrator of the Office of Federal Procurement Policy from 1994 to 1997 and the leader of that era’s acquisition reform movement—marshals survey data and multiple regression analysis to show that organizational change is a political process. He argues that there is a "change vanguard" in every organization which is discontented with the status quo and that leaders can use them to recruit others and to form a movement large enough to overcome organizational inertia and opposition.

Anyone who worked in acquisition during the late 1980s and early 1990s knows that many persons were unhappy with the contracting process and wanted to change it. During the years 1994 through 1997 the Clinton Administration seized upon their discontent to initiate reform, the main objective being to streamline the process of awarding contracts. Amid many alarums and excursions, and with no small amount of ballyhoo, many changes were made. Of course, critics now question the merits of some of those changes, even asserting that they have contributed to the emergence of a "culture of lawlessness" in contracting.

Kelman from the outset disclaims any intention of determining "whether reform substantively improved the procurement system." He is concerned only with the possibilities and processes of organizational change, and he assumes that acquisition reform was "successful." I am not competent to judge the social science in this book, but the idea of a "change vanguard" makes sense to me. Time will tell if other social scientists find Kelman’s book to be a useful contribution to the literature of organization. But as I read it I could not stop thinking about Staughton Lynd’s famous question: Knowledge for what? And I wanted to know: Change for what? Change to what effect? Change for how long?

Kelman says that the objective of reform was to reduce bureaucracy in the procurement system, and that bureaucracy has three components: rules, hierarchy, and specialization. Kelman is especially exercised by the bureaucratic evils brought about by excessive emphasis on following rules, both formal and informal. Three "rules" merit special mention by him, and I’ll quote his statements of them from page 11:

Contractors were not allowed to speak one-on-one with government officials while the government was preparing a procurement… In the bid solicitation, the government was required to specify precisely what it wanted (so bidders could bid on the same thing)… The past performance of bidders on earlier contracts could not be used as an evaluation criterion.

Of course, these were not really rules at all. Long before reform government officials could and did meet one-on-one with contractors while they prepared solicitations; agencies were permitted, and even encouraged, to use functional and performance specifications in lieu of design specifications; and agencies did evaluate past performance. What Kelman calls rules were really practices, and were often based on ignorance of the rules and/or fear of protests abetted by excessively conservative lawyers.

Acquisition reform was effected by exhorting contracting personnel to be brave and to innovate, by relaxing existing rules and, ironically, by adding new rules. It took a while for contracting officers to take advantage of some of the reforms, such as the new rules for buying commercial items and the relaxation of requirements for submission and certification of cost or pricing data. Other reforms, like credit cards and multiple award task order contracts, were quickly seized upon. Unfortunately, they were often abused, which resulted in yet more rules. The ultimate effect of other reforms, like the FAR Part 15 Rewrite, is unclear. Some reforms have become persistent nuisances, like performance-based contracting. On the whole, the reforms made it easier to get on contract quickly, but did not ensure better quality or lower prices, and sometimes worked against them. By and large they did not have much effect on contract administration.

Rules, hierarchy, and specialization were not and are not the main sources of the problems in contracting. Contracting officer ignorance and incompetence were and are the main problem, and declaring contracting personnel to be professionals did not make them so. The rules were never as restrictive or compelling as people made them out to be. The main problem was not the existence of rules, but that most contracting office managers and contracting officers did not know what the rules were, and still do not, and did not have the professional skills that they needed—such as competitive process design, price analysis, negotiation, and business problem solving—and still do not. Pressured by reformers to serve customers (who are always right), unequipped and unprepared to assist clients (who rely on professionals to decide what to do and to act on their behalf), forced by personnel reductions to take over clerical tasks, and demoralized by their reduction in status to administrative assistants to program personnel, too many contracting officers traded poor bureaucratic practices for poor but expeditious practices. Their conduct has called the legacy of reform into question, forcing Kelman to go on the defense in his Federal Computer Week column and to call for less oversight of the contracting process, culminating in his regrettable "Open Letter to 1102s" of October 20, 2005. (Victor Laszlo? I guess if you’re an IG it’s like being a member of the Gestapo. Don’t be surprised if the contracting folks who read Kelman’s letter rise up to sing La Marseillaise when you show up for a review.)

There is no question that acquisition reform brought about needed changes in contracting law, regulation, and policy. The Federal Acquisition Streamlining Act, the Clinger-Cohen Act, E-commerce, the emphasis on past performance, MACs, and GWACs, the re-energized General Services Administration, etc., were real accomplishments of reform and I admire Kelman for his role in bringing them about. He was our Lawrence of Arabia (or Che Guevara, depending on how you look at it). But did those reforms result in better quality goods and services at better prices? I would like to think so, and I believe that they did in some cases, but I do not really know that they did because no one established benchmarks and tests to determine whether they did or not. Reforms were proclaimed successful almost the moment they were announced, based on anecdotal reports without empirical verification: "[Performance-based contracting produced an] average 15% price reduction and comparable increase in agency satisfaction with contractor performance occurred across all price ranges and types of services for the contracts surveyed." That claim, made by the Office of Federal Procurement Policy in its Report on the Performance-Based Service Contracting Pilot Project, dated May 1998, was entirely unverified by audit, but skeptics were simply fuddy-duddies. Since then, another OFPP study, conducted at the behest of one of Kelman’s successors, Contracting for the Future: Interagency Task Force on Performance-Based Services Acquisition, dated July 2003, concluded: "The working group thinks that the acquisition community should work together to re-shape the expectation that PBSA will save money… There is little current data to support monetary savings, and if such data did exist, it would be extremely difficult to isolate the exact reasons the savings occurred.”

The acquisition reform of the 1990s was rule and process-oriented, gimmicky, faddish, publicity-seeking, and self-congratulatory. It was exciting and fun, and I mostly enjoyed it. But it was not the kind of reform that we most desperately need, which would focus on developing and maintaining a corps of professionally knowledgeable and competent contracting officers, people who could obtain best value by awarding well-written contracts expeditiously and administering them effectively, all the while maintaining their integrity, earning the respect of program officials and contractors, and capturing and keeping the public’s confidence and trust. That kind of reform would have been a lot harder to accomplish, but would have been immensely more effective and lasting.

In the very last sentence of the book, Kelman says: "However procurement looks, it is hard to imagine it will not be different from how it would have looked had reform never renewed the system." Interesting point. In the first chapter, Kelman cites one example of what was wrong with the pre-reform contracting system:

For many years the military had used government specifications ("milspecs") in buying everything from ketchup to chocolate-chip cookie mix, purchasing from the lowest bidder meeting the specification. These milspecs—about twenty pages long for cookie mix, providing detailed instructions on ingredients and baking requirements—were objects of derision; knowledge of the finer points of cookie baking was hardly a core competency of the Defense Department. The specification told how to make cookies but included no performance requirement that a cookie so produced would be one soldiers would want to eat…

Note the use of the past perfect—"had used." It is ironic that he chose that example, because the cookie specification, MIL-C-44072, 30 APR 90, w/change, 12 FEB 03, is still used as a component specification for the Meal, Ready-to-Eat. You can verify that for yourself at www.dscp.dla.mil/subs/support/specs/pcrs/mre/mrem004.htm. It is 26 pages long now and still does not require the delivery of a tasty cookie, but the cookie is no longer purchased from the lowest bidder, so I guess that’s progress. Sic transit reform.

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Vernon J. Edwards is a researcher, writer, and teacher of federal contracting.  Copyright © 2005 by Vernon J. Edwards 


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