On the Today's News page, there are a number of statements from a hearing yesterday. The Chairman of the Subcommittee may propose a Services Acquisition Reform Act (SARA). Is it needed? If so, what should be in it?

By annonymous331/3 on Wednesday, May 23, 2001 - 07:48 am:

It looks to me like Former OFPP Administrator Kellman believes contract specvialists are too stupid to do the work. Here is his proposal.

"Part of the solution, I believe, requires a change in cultural practices, in some civil service laws and regulations, and probably in salary and benefits at mid-management levels, to make it easier for the government to hire technical experts directly at the GS-l3 through GS-l5 levels, who would gain their technical expertise in industry and then do a few years of public service working for the government without expecting to stay in government for an entire career. I would like to see American industry, starting with government contractors but extending beyond to American industry in general, help our country by encouraging some of their employees to undertake several-year public service engagements."

What about us--we are already here. What do they do with us--send us to an 1102 scrapheap?

By Anonymous on Wednesday, May 23, 2001 - 08:45 am:

According to today's GovExec.com article, Rep. Tom Davis "said he believes competition among vendors is the best way to ensure the government gets the best buy for its dollar." However, we continue to get more and more socio-economic programs - Hubzone adjustments, SDB adjustments, ever increasing goals for small, sdb, 8(a), woman-owned, and on and on and on. The Government has to (or at least should) decide what it wants to do with its procurement policy - does it want to run social programs through it or conduct itself like "private industry" which Congress loves to say that we should. These ever increasing conflicting priorities are ridiculous!

By anonymous001 on Wednesday, May 23, 2001 - 09:02 am:

Anonymous:

Davis did not say that the reporter that wrote the article said it. Davis had much more to say. Here is one. He wants to open up GSA schedules for cooperative purchasing by the states, cities, and counties. However, Mr. Davis has a mistaken belief that the other governments need GSA. They do not. Here is a perfect example of cooperative purchasing the state and county way. Why not have GSA use these?

http://www.state.nm.us/spd/WSCAmain.html

http://www.uscommunities.org/

Both of these sites are provided on this site. It is the lack of knowledge that Mr. Davis shows that gets the governments in more problems.

By formerfed on Wednesday, May 23, 2001 - 09:13 am:

Three things come to mind.

1) Performance based contracting does work, but very few people in the government uses it. More legislation and OMB mandates will make things better. Rather, OMB and the rest of government needs to reward those that successfully do it, and set an example. For example, how many people would try performance based contracting if they read some CO just got a $20,000 bonus for completing such a contract?

2) Many people still don't know what Share in Savings is. It's been very successful in the private sector. However every time someone wants to do it, lawyers and other risk adverse people come up with ten reasons why you can't do it - "must be done only under the pilot authority of Clinger-Cohen, violates appropriation law, violates anti-deficieny act, it's not a type of contract authorized by the FAR, etc." Come on. It's just a no cost contract with a value engineering type clause.

3) Steve Kelman is absolutely right on his comments on bundling. Why should taxpayers get short changed when there are obvious opportunities for savings? Don't get me wrong - I doubt there are many more stronger advocates for small businesses than me. It's just there are many more ways to support small and disadvantaged firms, many of which aren't being utilized effectively now.

I hope changes happen without more legislation. These all can be accomplished just by better promoting of the principles.

By Anonymous on Wednesday, May 23, 2001 - 09:15 am:

Anon001:

I think you have a good idea. The Western States Alliance looks like it has done a lot of business. I assume that the purchase amounts for the States is much larger for commercial IT equipment too. So why have a GSA when the federal government can buy from the state and county cooperatives.

By ff on Wednesday, May 23, 2001 - 09:16 am:

Wow, just read my prior post. I often post while being on conference calls - that's my excuse for the grammar and typing errors. I meant to say under point one that "more legilation and OMB mandates will NOT make things better"

By bob antonio on Wednesday, May 23, 2001 - 10:00 am:

Here is a link to the statement of the new OFPP Administrator that she provided in her nomination hearing.

http://www.senate.gov/~gov_affairs/051701_Styles.htm

By Anonymous on Wednesday, May 23, 2001 - 01:45 pm:

Regarding Former Fed's message:

Gentle Editorial: When I see statements characterizing people as "risk adverse" (or another favorite, "resistant to change"), feel need to look more closely to see if the arguments make sense. These epithets seem to me to be designed to get an emotional reaction and carry forward shaky logic.

Anyway, with share in savings: Is there much experience in doing this with services in which potential savings or present costs are not easily quantified? Clearly, with some areas (collection of debts/parking tickets) you could identify anticipated revenue from collections, for example, and then share the "savings (or collections in excess of historical rates).

Suppose there are those who would fear getting budget cut by amount of anticipated savings (which may not pan out) or would believe that contractor is already being paid to do the job efficiently.

By formerfed on Wednesday, May 23, 2001 - 02:57 pm:

Anon 5/23,

First, point well taken regarding my characterization (but it's true!) Just kidding.

I wouldn't recommend doing any share in savings unless the contractor and government can clearly quantify the pre-existing state. I also would go one step further and state that the cost of pre-existing state can be replicated. Remember if you agree to share savings with a contractor, this generally results in very large payments. This likely draws very close examination after the fact.

Every talk or presentation I've heard includes assurances by OMB that agency budgets won't get cut. I think a lot of people want this to succeed and thus agencies will get rewarded by keeping the money saved to make other improvements.

By Vern Edwards on Wednesday, May 23, 2001 - 09:14 pm:

formerfed:

I challenge your claim that "performance-based contracting does work" for the following two reasons:

First, what do you mean by "does work"? What are your criteria for success and what are your data?

Second, the definition of performance-based contracting in FAR is much too vague to establish what it is in practice. Agency performance work statements are all over the map. Moreover, different people have different views of performance-based contracting: some think that a performance-based SOW may not say things like "The Contractor shall mop the floor," since that tells the contractor to "mop," which is "how to." Others think that performance-based contracting simply means don't overspecify by citing military or Federal specifications or standards or Government regulations and procedures, but that it's okay to say things like "mop the floor."

If you can't distinguish between the animals in a jungle, and if you don't have data which clearly describes what is going on in the jungle, then how can you make any claim about a specific animal's behavior?

If I am right that there is no widespread agreement at the mid-management and working levels about the attributes of a performance-based contract, and if you cannot produce empirical data to validate your claim of success, then how can you say that PBC "does work"? Are you basing your assertion on empirical data or anecdote? I should say in advance that I don't think much of OFPP's report.

You said: "More legislation and OMB mandates will make things better." I disagree. We do not need new legislation or regulation. Not now. Absolutely not!

The last thing we need right now is legislation or new regulation because the policy makers don't know enough about services -- about their essential nature as the object of acquisition -- to write good policy. For instance, in practical terms, how does the acquisition of services differ from the acquisition of supplies? Are all services alike? Should the same policies apply to services for operations, for support, and for projects? These three kinds of services are very different. Random sample inspection as prescribed in OFPP Pamphlet No. 4 may work to ensure the quality of operations services, but probably not support services and definitely not project services. How many policy makers (or GS-1102s for that matter) can tell you why? How many can explain the differences among those three kinds of services?

Furthermore, the policymakers are largely ignorant of the research and thinking about services that has been done by legal and economic scholars since the early 1970s, and they shouldn't write any policy until they have steeped themselves in that research. How many of them could tell you who Ian R. MacNeil is, or Steward Macauley, or Avedis Donabedian, or Oliver Williamson, just to name four pioneer thinkers?

Additionally, we don't know enough about how the commercial sector buys services to know whether that sector has anything to teach us. For example, how often do commercial firms acquire services under Government-type firm-fixed-price contracts? Do commercial firms write detailed statements of work or do they rely on other means to ensure quality? (When Steven Spielberg hired Industrial Light and Magic to make the dinosaurs for "Jurassic Park," did he write a statement of work? If so, what did it look like? Did he use a firm-fixed-price contract?) Do commercial firms worry about "personal services"? If so, do they define the term the same way that FAR does and do they worry about it for the same reason that the Government does?

I think I know who you are, formerfed, and I respect you. So, please, don't you jump on the bandwagon. We need to do something about service contracting, no doubt about it, but the last thing we need is for a bunch of know-nothings to start writing rules before they know what they are doing.

Vern

By formerfed on Thursday, May 24, 2001 - 07:28 am:

Vern,

I did catch my typing error above and made the correction of "...more legislation will NOT make things better..."

I admit all my evidence about performance based is anecdotal. Yes, there are lots of definitions as well and I should have realized that before commenting. What I see works is a process of (1) conducting market research, often using the commercial side of companies experiences rather than the federal side (2)defining the overall requirements at a high level statement of objectives, thus allowing a lot of flexibility in proposing solutions, (3) evaluating responses which are in the form of solutions to meet the SOO, (4) requiring the offerors to propose measures to assess whether performance meets needs, and (5) mutually developing incentives to exceed a standard.

I've seen this work. The difference with this as opposed to what many others consider as performance based is the government stays completely away from telling the contractors how to do the work. Rather, the government uses industry expertise and experience and let companies decide the specific approach based on what they do best. That's why extensive research is needed upfront - to educate the government on what the marketplace is all about, and every sector of the services arena is different. I also thing all the emphasis on quality assurance is ridiculous. There shouldn't be more than a half dozen key measures to determine if the work is done correctly or not.

You may not agree with me, but at least I think you see where I'm coming from now.

By roston on Thursday, May 24, 2001 - 10:26 am:

What makes most sense, and therefore probably will never be, is for federal acquisition regulations to provide guidance (not mandates) for a variety of contract types. The contract type used for any given requirement should be up to the discretion of the CO and the program office, and there hopefully is careful thought given to the pros and cons of each type available.

Being forced to do performance based, when it doesn't make sense, is ludicrous - yet that is where we are. Such a mandate mostly creates frustration for many that we can't make informed and sound business decisions as to how we conduct our procurements.

Contracting personnel need wide latitude, and should be encouraged to be risk takers, in order to do their job. Watching what does and does not work in the commercial world, and understanding government programs that are supported through the contracting process (socioeconomic considerations - as mentioned above)makes sense.

Mandates only make us comply - Guidance allows us to use our brains & guts.

Maybe I've just been around too long and should go to the 1102 scrapheap

By Anon2U on Thursday, May 24, 2001 - 10:58 pm:

Perhaps this is straying from the topic, but since we are discussing the fine points of federal acquisitions, I must weigh in on the discretion of the contracting officer.

While those of you who have been in the field for years can debate the fine points, most of us do not have the experience and more choices only slows things down, adds confusion, and ends up at the GAO in protest. I have only 3 years in the field after 20 in inventory management. I have an MBA emphesizing acquisition and procurement management and have been to at least 10 DOD contracting classes. I am an educated idiot.

The system is so complicated that I am getting more and more frustrated. Very important contracting basics are buried in and scattered through the FAR. I am expected to handle 3 new acquisitions (contracts, multiple simplified acquisitions, and administer five $5M+ IDIQ contracts at once. I don't have time to do research projects on everything I do. I have discussed this with other 1102's and they say I have it easy, they have even more actions.

I expected that my supervision would help me through the experience gap but they are as bad off as I am. Now I read that a large portion of the career field will retire soon and we will become even more inexperienced. We don't need more options, we need simplification.

While DoD appears to have lots of experienced 1102's and strong structure, most civilian agencies do not. There are large numbers of contractor employees and PSCs. They turn over very fast and never get experienced.

I guess I better stop playing my violin and singing the blues but I have seen many leaders discuss the experience gap that is upcoming (here?). We need simple solid, ABC, 123 get it done procedures not push the envelope advice.

By formerfed on Friday, May 25, 2001 - 08:39 am:

Anon2u,

Unless you're buying repetitive, commodity type items, simple ABC procedures won't work. Part of what makes this work interesting is there often is no clear cut answer. A big part of the job consists of creative problem solving - finding a business approach that delivers what the mission optimally requires. This involves applying a mixture of skills, techniques, and knowledge to a situation, as opposed to following a set of procedures.

Taking a series of CON classes won't help in itself. A big piece of the answer is getting broader exposure. Several things come to mind - volunteer to work on other assignments, take rotational details, join NCMA and attend meetings, take courses other than the typical CON ones (one poster to this site provides exceptionally informing and entertaining training that is eye-opening), read and analyze GAO and court decisions on your own, and continue to participate in this forum.

One last thing is try to learn from every experience. Take a look after the fact at all your work and see if there was a better way of getting it done. Even simplified acquisitions can provide amazing opportunities to learn. Contrary to what most think, you do not have to absolutely go with the lowest quote. Read some of the GAO decisions and you'll be surprised on the latitude afforded buyers when they make decisions consistent with the government's best interest.

It's a challenging and rewarding job and gets more interesting with the experience gained.

By Roston on Friday, May 25, 2001 - 12:31 pm:

Anon2U: I sympathize with your situation in that you are new to the career field and don't have more experienced contracting personnel to mentor you.

I think you will find, however, that even for a beginner, doing things by ABC/123 steps doesn't involve much grey matter and you will quickly get bored and you won't be effective. Yes, you'll get the job done but you won't be highly valuable to the organization.

Your absolutely right that the system is complicated and people are overworked these days. That is fact of life #1.

But consider that everything that is before you is a challenge, and at the same time, you should challenge everything that is before you! I know that sounds like malarky, but that is how the acquisition field has gotten where it is - people started to challenge the system (i.e. why can't we use credit cards instead of SF44 & petty cash? WE CAN!...why can't we do contracting more like the commercial sector? WE CAN...etc)

15-20 years ago we were stuck with very limited options and we did things by rote. But since then there has been an explosion of new initiatives - with many more to come I'm sure.

Bottom line - its a challenging career field and you have to decide if it is right for you. It's only going to get crazier(guaranteed).


Roston

PS:if your not up to the challenge - you can always review the archived contracts in your office and follow what was done historically - but I think by perpetuating antiquated processes you'll have more problems than if you struggle along with the rest of us.

I sincerely wish you good luck with your struggle.

By Ramon Jackson on Friday, May 25, 2001 - 04:08 pm:

Isn't there a fundamental problem illustrated by the postings of Vern, formerfed, roston, Anon2U and others here? It seems to me most agencies treat acquisition as incidental in the sense it is event driven. The large acquisition agencies do have organizational structure and permanent assets, but most others do not. Each need and resulting acquisition is handled largely as an isolated event -- perhaps with the exception of using an old document as source of "cut and paste" with concurrent problems.

Government acquisition is a very large business, yet we approach it in an ad hoc fashion. Vern's point and one of my pet peeves is the fact the answer to a question of "What is your evidence?" is generally a very realistic "We don't know." We pay fortunes to collect metrics. The metrics often concern the wrong things and in any case are rarely subjected to analysis and distillation to provide those considering similar actions a coherent body of information about what does and does not work.

Formerfed isn't alone. Almost all our evidence about performance based contracting performance is anecdotal. It makes reasonable sense. It should work in many cases. We have no real body of evidence supporting that assumption, detailing when it does and when it does not, what causes a failure and other considerations of fine tuning.

We have Anon2U with all sorts of qualifications and general background, not and evident dim bulb and new to the specific issue describing himself as "an educated idiot" with reference to a complicated system with more choices. Where is the organization and corporate memory to support such people? Doesn't exist for the most part. I'd guess he is being thrown acquisitions from random directions and playing catch as best he can pretty much as an individual.

Formerfed replies with advice and suggest "getting broader exposure" -- he is! Exposures are probably coming thick and fast. Given enough time as a target Anon2U may just get enough experience to feel better before transfer or retirement. He does mention one interesting thing in his own post: "DoD appears to have lots of experienced 1102's and strong structure, most civilian
agencies do not." DoD has real problems itself, but it also seems more prone to providing acquisition structures.

The cure is not more "educated idiots" holding degrees in chosen subjects. It probably is in recognizing that acquisition takes place all the time and is a major dollar function of government. If effectiveness is a goal (I sometimes doubt it is.) an organizational structure must be imposed to provide collection and sharing of "experience" along with programmatic steering of contract activities as something other than wild balls from various directions.

This need extends well beyond 1102s. Program offices and their occupants spring up and vanish with the experience gained rarely recaptured for the next effort. Selection teams are often handled the same way. Some argue that experience corrupts and it is better to have a fresh view. I'd suggest they go to the inexperienced surgeon for heart work or lawyer if they are falsely accused of serious crime. Those repeating one "experience" over and over in new situations must be purged. Those able to apply experience to similar or new situations must be treasured.

One way to do that is form and maintain a cadre of acquisition support people backed by a core of on-call expertise throughout the agency. Plans should be in place to provide a stream of new blood into the system, but the point is to build and maintain a structure having or having on call data, experience and special talents (for example occasional statistical analysis from a technical group) from the earliest stage through close, or as some say, "lust to dust." Such systems don't just happen.

Yes, it takes competent, self learners, self starters, but individual excellence probably is not enough to do more than create occasional flashes, or in the word of Bush Sr., "point of light." To do more requires good people supported by a system.

Using the matrix PO concept wouldn't it make sense for nearly every agency to form a Program Office for Acquisition beyond the Acquisition Executive concept? This would involve the core of permanent acquisition people in an acquisition organization supported by a matrix within the entire organization with special skills and a tuned ear to acquisition issues.

By Vern Edwards on Monday, May 28, 2001 - 06:14 am:

formerfed:

I'm glad to hear that you don't think legislation is needed at this time. I don't really disagree with what you said in your second message, although I will point out that you still haven't said what "works" means. In what way does PBC "work"? But that's not the issue that I want to pursue right now. Instead, I want to discuss what I consider to be a problem with the statement of objectives (SOO) approach that you described.

We spent much of the 1990s trying to streamline source selection by reducing requirements for written technical and management proposals through the use of oral presentations, limiting evaluation factors to experience and past performance, and awarding without discussions. I think the SOO approach that you described will take us back to the bad old days.

The SOO approach requires that each of the competitors prepare a statement of work based on an agency's SOO. It's likely that each competitor will propose different tasks and measures of performance related to the government's objectives. Some of these will almost certainly miss the mark unless the SOOs are very well written.

In many cases evaluating such proposals will be like comparing apples to oranges. Competing offerors will make extravagant promises in order to win competitions. The proposed SOWs will have to be read very carefully with a lawyer's eye for wordsmithing in order to plug potential loopholes. It's likely that extensive clarifications, communications and discussions will be necessary in order to understand and resolve issues associated with the wording of the competing statements of work.

Thus, I think the SOO approach is anti-streamlining and that it is likely to be costly and time-consuming for both government and industry and that it will extend procurement administrative lead times significantly. Only through very clear and detailed proposal preparation instructions could agencies hope to minimize the impact and simplify the evaluation problem, but when have agencies been good at writing clear proposal preparation instructions?

Is this really the way we want to go just to solve the problem of the government's inability to write its own performance-based work statements?

By formerfed on Tuesday, May 29, 2001 - 08:00 am:

Vern,

Valid points. I don't advocate wide spread use of the concept either - SOO's certainly do require an extensive investment of time and other resources.

I've seen good results in two very similar instances. Both involved situations where essentially the same statements of work existed for many years. The government had a rather fixed way work was supposed to be performed and the it evolved that way over many years. Use of SOO's allowed industry to propose with fresh ideas. In one case, the overall cost was reduced by a little less than 10%. In the other case, performance improved with the same price.

Admittedly, this could have been achieved through other means than SOO. But the use of SOOs does open the door.