I just read an online column in which the author (1) asserted that the government neglects contract performance management to its detriment and (2) called for the devotion of more resources to that acquisition function. I don’t know on what basis the assertion was made or whether it is true, but I would not be surprised to learn that it is. My impression is that most contracting people devote most of their time to acquisition planning, contractor selection, contract award, and to unavoidable contract mods and postaward administrative matters. I suspect that most have little or no time for actual contract performance oversight and management.
If that is true, why would it be so? I am not sure, but I believe that a major contributing factor is the multiple-award task order contract. (By “task order contract” I mean an indefinite-delivery indefinite-quantity (IDIQ) contract for services.)
We spend more on services than supplies, and we conduct a lot of competitions in order to spend that money. We conduct competitions under FAR Part 13, FAR Part 14 (a few), FAR Part 15, FAR Subpart 8.4, and FAR Subpart 16.5. The reason for conducting Part 13, 14, and 15 competitions is obvious and understandable, but the Subpart 8.4 and 16.5 task order competitions are competitions on top of competitions. We do them because Congress wants agencies to continue the pursuit of lower prices after contract award and keep pressure on contractors to perform well.
Competition is resource intensive, time-consuming, and costly to all involved. How much time and money do all the 8.4 and 16.5 competitions cost and how much money, if any, do they actually save in the long run? Do they, in fact, result in better quality than could be had through effective contract management? No one knows, because no one keeps track.
The preference for multiple awards of task order contracts was a provision of the Federal Acquisition Streamlining Act of 1994, Pub. L. 103-355, §§ 1004 and 1054. The FAR councils implemented the statutory preference in FAR 16.504 and 16.505. FAC 90-33, 60 FR 49723, Sep. 26, 1995.
I commented on the proposed rule, 60 FR 14346, Mar. 16, 1995, in an article for The Nash & Cibinic Report entitled, “The New Rules for Multiple Award Task Order Contracting” (June 1995, 9 N&CR ¶ 35). In that article, I said:
I also said:
And I concluded:
Well, we all know what happened after FASA and FAC 90-33. The number and dollar value of acquisitions of services under multiple-award task order contracts (and GSA FSS contracts) soared. There was a lot of misuse and sloppy practice. In reaction, Congress and the FAR councils made the once liberal rules more voluminous and restrictive, not only for task order contracts under FAR Subpart 16.5, but also for orders against GSA Federal Supply Schedule contracts under FAR Subpart 8.4.
Competition is an essential part of acquisition policy, but competitions clog the acquisition system by absorbing a lot of human resources, taking a lot of time, and costing a lot of money. I believe that the multiple-award preference has made for a lot of unnecessary and ineffective competitions. It is not at all clear that the contracting results have been better than they would have been had agencies been allowed to make single awards without hectoring by the GAO, review teams, IGs, and other critics. Would America really be worse off if agencies simply conducted one competition for a task order contract, chose one contractor, awarded one contract, and focused on getting the best performance from that firm under that contract?
Multiple awards can be useful and have a place in acquisition practice, but I think that the statutory and regulatory preference for multiple awards has been one of the worst things that has happened to postaward contract management. It has diverted precious human resources to processes of dubious effectiveness and away from work that, if done well, would likely have a much more direct and immediate impact on results.
If anyone believes that better contract performance management yields better results and is looking for more resources to devote to that work, start by seeking the elimination or moderation of the multiple-award preference.
Four ideas to make elimination or moderation of the multiple-award preference more palatable to Congress:
1. Limit the duration of ordering periods under single-award task order contracts to three years, including options.
2. Amend the applicable statutes to expressly allow agencies to renegotiate prices and rates in single award contracts and prices and rates in contract extension options after contract award, without conducting a new competition.
3. Allow agencies to negotiate and award a new contract of up to three years duration with one of the original competitors without conducting a new competition if the original awardee's contract is terminated for convenience or default during the first year of the ordering period.
4. Develop a special course in services pricing and price negotiation for all COs who manage task order contracts and require them to attend and successfully complete the course within the first year of their assignment to such a contract.