Does a Secretary of Defense nominee dating back to the Ford Administration signal a return to the good old days? If so, what are the good old days?

If not, what is next for government contracting?

Will government (federal, state, city, local) follow the lead of the automobile industry and create an online marketplace with its suppliers?

By Brian Fisher on Thursday, January 04, 2001 - 01:08 pm:

Bob,

I look forward to the direction of acquisition reform under Secretary-designate Rumsfeld. As we have seen since 1993, the NPR's acquisition initiatives were based upon fairly simple, common sense (and low-political-risk) goals. They left for another day the difficult policy recommendations necessary to reap significantly greater savings. Mr. Rumsfeld commented in 1995 that the NPR's recommendations were so basic and common sense that they were non-ideas:

In any institution other than the federal government, the changes being trumpeted as reinventions would not even be announced, except perhaps on the bulletin board in the hallway. They are the kinds of things that a hospital expects floor nurses to do on their own; that a bank expects branch managers to do on their own; that even a poorly run manufacturer expects supervisors to do on their own - without getting much praise, let alone any extra rewards.

Donald Rumsfeld, Thoughts from Business on Downsizing Government, Heritage Found. Reps. (July 6, 1995) (citing Peter F. Drucker, Really Reinventing Government, Atlantic Monthly (Feb. 1995)).

I would even go so far as to say that the NPR initiatives were simply an exercise in paving the cowpath (i.e., streamlining existing processes, without really evaluating the premises underlying the processes).

In re: "what's next?" I believe that the recommendations submitted by the Acquisition Reform Working Group are a good first step, and worthy of consideration. I also would suggest that the DUSD/AR and OFPP appointees have excellent opportunities to reach out to the front-line procurement folks and ask: How can we help you accomplish your mission? How can we more effectively support your (and your agency's) role?

I think also that the Government must take greater advantage of the capabilities that exist in the commercial arena. This statement encompasses both automating existing processes and eliminating/reducing the barriers/risks so that "pure" commercial businesses will feel comfortable enough to do business with the federal government.

By bob antonio on Thursday, January 04, 2001 - 02:09 pm:

Brian:

I was young when Secretary Rumsfeld served in the Ford Administration. I know that the Commission on Government Procurement's recommendations were in the early stages of implementation. Did Secretary Rumsfield give any idea of what he would do?

(I liked the quote.)

By Eric Ottinger on Thursday, January 04, 2001 - 03:24 pm:

Bob and all,

I don’t think our retreads are going to be stuck back in the 70s. While they have been out doing other things, they have seen or heard about some of the nice things that the private side has accomplished, and they are going to want the same in the Government.

I expect that the new folks will continue pretty much along the same Acquisition Reform path, with the rhetoric toned down a bit. I am curious to see who will be the new A&T (Acquisition and Technology) and how, organizationally, Acquisition Reform will relate to the Director of Defense Procurement.

All and all I am optimistic.

I don’t really disagree with Brian, but I would note that it is easy to make dogmatic statements when you are on the outside scoring points off the party in power. I expect that much of this will be toned down and reevaluated after these folks are in power.

As for the purely commercial firm, I agree in principle. But I think somebody needs to figure out what firms, markets, products we are talking about. My office buys rockets and rocket scientists and when we need Dell computers we can do that without too much fuss these days. That’s my skewed view of the world. I really don’t know what everyone else buys. And that lack of knowledge causes me to distrust generalizations.

To put it another way-- Several of the first generation of Acq Reformers seemed to think that 90% of acquisition was Information Technology and the remaining 10%, something else. It was a skewed view of things. I expect this more experienced crew to have a somewhat more balanced view of the world.

Eric

By Ramon Jackson on Thursday, January 04, 2001 - 03:42 pm:

Eric, I tend to agree the previous reform mainly picked low hanging fruit. The really hard problems were only tapped.

I also tend to agree there was lots of emphasis on IT, but outside a couple of big weapon systems IT was probably one of the worst examples of acquisition at the time. We had huge failures of major systems based on grand designs that were flawed from the start. It was also very expensive in direct contract costs, in lost time and in failing systems having to limp along long after they were obsolete. Look at air traffic control having to buy tube technology in the solid state world.

IT reform was a definite low hanging fruit. We were treating mico, mini, and midi (Remember all those now somewhat archaic terms?). Even "mainframes" fit in a modest room. Acquisitions of IT were still being treated as if buildings needed to be built and major electical systems had to be planned. Many of the rules and practices made absolutely no sense with the technology change and rapidly shrinking size and cost. Reform there was long overdue.

By Eric Ottinger on Thursday, January 04, 2001 - 03:58 pm:

Ramon,

I think we have done better than "low hanging fruit." I think there has been some fundamental reorientation.

However, there is much left to do.

Eric

By joel hoffman on Thursday, January 04, 2001 - 04:41 pm:

Hard to really "streamline" US Government acquisition along the lines of the commercial world, with at least three major obstacles:

1. Competition in Contracting Act.

2. The numerous social policies of the US Government (SB, SDB, Drug Free, Hubzones, you name it).

3. Lack of a profit motive ("it ain't MY money" thinking).

The first two aren't necessarily bad. They are simply fundamental acquisition policies of the US Government, enacted by Congress, in response to the desires of the US Citizens.

I have no idea how to overcome the last one on a Government-wide basis. There are few who try to remember the bottom line and appreciate those who pay the bill. When it is possible to continuously run red ink and be promoted for it, how can you put the public interest in the proper perspective? What IS the proper perspective?  Happy Sails! Joel

By Ron Vogt on Friday, January 05, 2001 - 03:49 pm:

Joel,
I could add a couple more to your list of major obstacles -

The protest system: in the commercial world when you lose a contract, you go home, lick your wounds and try to do better on the next one. In the government world, you protest.

Truth in Negotiations Act: what contractor in its right mind would make these kinds of cost disclosures to a commercial customer?

When will the government ever realize that the costs of compliance far exceeds the costs of the occasional bad deal that would slip through? Commercial companies manage to survive without these "protections."

Much is made of the "unique" needs of the government and especially the military. Yet commercial companies buy unique items ALL THE TIME! Whenever a new product is brought out, everything is new, from the tooling to the production line machinery. Somehow, commercial companies manage to acquire these without all of the "protections" the government needs. A reform that limits "commercial contracting" to existing products is just scratching the surface.

I could go on, but you get the point. Reform is not bragging about how the specs for an ashtray now are only two pages long. Reform is scrutinizing every law that causes a contractor to act differently than it would for a commercial customer, and eliminating every one that is not absolutely necessary. Admittedly, the government will not get the absolute best deal every time, but commercial buyers don't either, and they manage to survive. Besides, the government doesn't always get the best deal under the current system either.

By joel hoffman on Friday, January 05, 2001 - 06:20 pm:

Great points, Ron. Happy Sails! joel

By Ramon Jackson on Saturday, January 06, 2001 - 01:01 pm:

Ron, Eric: That is a part of what I meant by "low hanging fruit." Another I had in mind is really recomposition of the "acquisition workforce" well beyond anything now. So far I think it has been tinkering with little attack on structural issues.

As a thought exercise: Would a private company continue the employment of an executive who ignored all technical advice, drove the purchase of a dud, and cost the company dearly in cash and market position? One who repeated the error?

By Anonymous on Monday, February 05, 2001 - 05:15 pm:

Sick and Tired Comments

Commercial isn't the "best" automatically. This forum should drum out slippery comments that glorify "commercial" since in most cases the "commerce" assumed is a true competitive environment. This is not the normal Federal acquisition. There is rarely a "market".

Wishing for unfettered rules is contrary to being a public entity. "Would a private company ... " is a non sequitur. Sounds like some Republican advertisement. The Federal Government is a spending agent not a profit making corporation. Spending agents have oversight, protests, disclosure, accountability. Live with it.

Wish I won the lottery!

By Ramon Jackson on Tuesday, February 06, 2001 - 12:21 pm:

Sick and Tired:

Commercial practices and commercial items have their place, but you are entirely right in thinking the government often misapplies "commercial." Only when an item or service has a true commercial market should it be treated as a commercial item and then the government should act like a commercial entity with any sense would and drive the best bargin as a large entity. That would mean buying in bulk -- even if it meant trampling on agency "independence" -- by bundling requirements.

If you are citing my comment "Would a private . . ." you are being illogical in accusing me of a "Republican advertisement." There was nothing in there about throwing out all the rules. Many need updating, some need tossing, but the government has responsibility no private entity has. Those differences must remain. However, that does not mean the government cannot adopt sensible business practices that respect those differences.

Continued employment of people in roles that they demonstrate they cannot fill is not in anyone's interest. A low level employee may need training or transfer to work within their capabilities. I even accept the need to recognize that a single and unique failure may be a valuable lesson that should not be discarded. To continue the employment of an "executive" after multiple demonstrations of bad judgment or negligence is something neither business nor government can afford. I would also extend that to the lower levels of the Civil Service.

As an aside, I do think it both interesting and a demonstration of misplaced priorities that the Civil Service is much more willing to take action over certain social than competence issues. Any number of relatively minor social misjudgments can bring serious reprecussions. Incompetence rarely does.

There is nothing that can be done when an electorate elects someone unfit. Our history is full of comic and tragic incidents from city councils to the Presidency itself where the electorate might be said to have not done its job well. We all just have to live with the result. That aside, at the appointed and career levels accountability for decisions needs more serious attention. An employee sick and tired of doing effective work with sensible and expert application of the regulations and available tools needs to seek other employment -- or win a lottery. If they do not choose that option it is time for the next management level to assist them. That is good business and good government.

The blunt truth is that we've tinkered with the regulations without getting at one core issue -- do we have too many people in place without the reasoning and judgment skills to apply them wisely and economically. I think that is a problem in the acquisition workforce.

By John Ford on Tuesday, February 06, 2001 - 12:24 pm:

Anon, while there is some truth in your statements, I have to question what is a "normal Federal acquisition." In reality, most government contracts acquire supplies, services and construction that are acquired by private sector entities. However, these are not the big ticket contracts that are usually associated with government procurement. Thus, if the government and DuPont, for example, are acquiring the same things, doesn't it make sense to know which is the more efficient and economical? If DuPont's procedures are better, then why shouldn't the government learn from that and adapt its processes to more closely resemble that of DuPont? Sounds to me like a valid application of best practices.

By Anonymous on Wednesday, February 07, 2001 - 05:45 pm:

From Sick and tired
The migration of spare parts and other "commodities" to DLA from the military services, and the greatly expanded role of GSA in purchasing common items, have massively reduced agency contracting functions to "specialized" and more mission critical items.

With that premise accepted, the procurement of resistors, screws, paint and bricks is most certainly a "commercial" function that could/should be centralized and commercialized. The comment about DuPont is most applicable here. I posit these contracting functions to be already highly commercialized and mostly having adequate competition to fit the concepts of commercial application.

I would suggest that "services" for the government have many unique compositions that may include security and other requirements to be compatible with the mission. Clearly A&AS for the purpose of the agency, secure telephone support for FBI agents in the field and special purpose vehicles for the military all fall into mission critical acquisitions.

The acquisitions which matter most in terms of mission are what I consider "normal". This means guns for the FBI, drafting software for the Corps of Engineers, traffic controls for the Transportation types etc.

If these "core mission acquisitions" are "normal Federal procurement" then the application of performance measures, rewards and punishment that Ramon longs for, are easier and fairer.

I agree with Ramon that the people problem is the underlying fault. The "safe" for the short term, the unassailable sole source to the OEM have their commercial counterparts to be sure. How about buying IBM computers!

Having a family member who was with DuPont, their purchasing of chemical processing equipment was separated from the day to day supplies and services. I do not think however that DuPont would buy an "off-the-shelf" (COTS) computer with custom chemical process dependent software, as a commercial item. Many government types are however trying to fit their foot into the glass slipper.

The Air Force is trying to call the C-17, developed at public expense, a "commercial item". The Army is trying to buy a replacement subsystem as "commercial" because it happens to have a Pentium chip at its heart!

Price based acquisition makes sense for buying nuts and bolts because there is a market. Titanium bolts three inches in diameter that hold the wings on an aircraft are hardly a candidate for PBA, but it is being attempted!

Misapplication of techniques or using them as some sort of mindless mantra is the problem. The reasons are harder to characterize. One reason is undoubtedly plain laziness, stupidity or attempting to misapply some "trendy" technique. But all too often these people are much less inept or uneducated than many think. In fact the best and brightest curry favor with the buzzword mongers. They are dumb like foxes!

What they are doing, especially at higher "management" levels is using tried and true socio-organizational-self serving - ambitious - unethical, but promotion effective means. These include "innovative" use of waivers, getting ill informed legal opinions from selected "right thinking" advisors, proposing "pilot programs", convincing subordinates that "everybody is doing it" and in some of the most pathological cases using the "its a political thing" excuse. It is positively amazing how many politicians are used as excuses without their knowledge!

I believe that accountability through dismissal, promotion of whistleblowers, procurement educated law enforcement officers, and holding legal officers liable for politically motivated decisions will do some small part in holding down the most egregious situations. Along with this is a generous presumption of innocence and acceptance of honest errors, but where obvious disregard is provable prosecution is appropriate. The anti-deficiency provisions are enforced by wives tales of prosecution and liability!

By Ramon on Saturday, February 10, 2001 - 11:38 pm:

To the above -- yes!

Pens, paper, ordinary nuts-and-bolts, ordinary office equipment and even most standard lab equipment can fit the commercial shoe. Trying to integrate specialized software into a commercial computer may or may not fit. That is the rub.

Some real thought and parsing of just what is required needs be done for any but the most simple acquisitions. It may be ten minutes of ordering and resolving issues or ten months. It needs doing. To carry on the trend above, grabbing the most familiar or popular shoe and ramming it onto the foot at hand, whether from laziness or favor currying, cheats everyone.

It even cheats those most involved. The too hungry "customer" often gets what they "want" and it doesn't work well because it wasn't what the job needed. The acquisition people involved get their obligation records cleared and then get trashed for poor results -- sometimes from that very customer who was so pleased a few months back. The entire government service gets an aura of people pushing paper and money out the FY door at the expense of the taxpayers.

Everyone can make mistakes. Even some big mistakes are worth while learning experiences and someone who has learned from mistakes may be the most valuable guide of all (discussed long ago in connection with past performance and key personnel). It is the repetitive mistake maker that needs to find or be encouraged to find other pursuits.