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A Cheap, Showy Gesture

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Vern Edwards

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In a memo released today and addressed to Chief Acquisition Officers and Senior Procurement Executives, the Office of Federal Procurement Policy issued "guidelines" to agencies about how to increase the use of competition and use fewer cost-reimbursement and time-and-materials/labor-hour contracts. Honestly, you have to wonder.

The memo begins by reiterating President Obama's March 4 memo. So we have a memo about a memo. The March 4 memo told federal agencies to (1) get more competition and (2) use fewer cost-reimbursement contracts. Now, you would think that Chief Acquisition Officers and Senior Procurement Executives would know how to do that without advice from OFPP. What are the guidelines?

INCREASING COMPETITION

In order to get more competition, OFPP suggests that agencies use requests for information and industry days to find sources. They should use "the full range of market research tools" (whatever they are). They should use "an" advisory process--presumably the process set out in FAR 15.202. They should use contract review boards and peer reviews.

Now, all of this is exactly the wrong advice. Agencies like sole source because it's fast and administratively inexpensive. Agencies don't like competition because (1) it is too resource intensive, (2) it takes too long, and (3) it is too vulnerable to nuisance protests. If OMB really wants to increase competition is should address those complaints by telling agencies to simplify their source selection processes, including selection procedures for task and delivery orders. The objective should be to use fewer people and speed up the process by no longer asking for needlessly voluminous paper proposals. Simpler source selections will be less susceptible to protests. But OFPP suggests the use of processes that take time and people. Brilliant.

OFPP also urges the use of performance-based contracting. That's a loser and has been a loser for more than 40 years, ever since the Air Force invented it in 1969. Agencies have never figured out how to write performance work statements and quality assurance surveillance plans and have proven themselves to be immune to training about how to do it, assuming it can be done. OFPP won't make competition more attractive by pushing performance-based contracting.

Lacking anything more specific, OFPP then discusses "competition strategies" and "strategic sourcing." Whenever anyone in procurement starts talking about strategy, I go to sleep. So does almost everyone else.

Finally, OFPP urges agencies to maximize competition for task and delivery orders. Again, the solution is to simplify. But what does OFPP suggest? Apply "greater competitive rigor," whatever that means. It will undoubtedly be interpreted to mean, "Make it more formal and complicated." OFPP then amusingly suggests "using data generated by new FPDS reports to evaluate in new competitions the extent to which task and delivery order competition is being achieved." That's funny, aside from the fact that the sentence doesn't make sense. Use FPDS data to "evaluate in new competitions the extent to which competition is being achieved"?

USING FEWER COST-REIMBURSEMENT AND TIME-AND-MATERIALS CONTRACTS

As for contract types, OFPP gives the entirely unoriginal advice to (1) do a better job of defining requirements, (2) determine the level of cost uncertainty when selecting contract type and (3) use incentives. The suggestion to use incentives is especially interesting in light of the fact that the FAR councils just issued FAC 2005-37, which contains a rule requiring the preparation of a D&F signed by the head of the contracting activity before using any incentive. That's a mixed message. If you want people to use incentives, don't make them harder to use.

What OFPP ignores is that the use of indefinite-delivery indefinite-quantity and cost-reimbursement and T&M/L-H contracts is directly associated with the unwillingness or inability of agencies to define and specify their requirements in advance. Defining requirements is a lot of trouble. Cost and T&M contracts let agencies make it up as they go along, which is what government managers prefer to do, being apparently incapable of thinking and planning before going on contract. The history of contracting since at least the late 1980s is about finding ways to make careful planning and specification unnecessary. The trouble began with information technology requirements and has spread through the system like a virus. While cost and T&M contracts have a legitimate use, contracting people have had their arms twisted to use them to help requiring activities that can't get their acts together. Contracting people lack the know-how and standing within their organizations to demand better requirements definition and planning from their "customers."

OUR INCOMPETENT GOVERNMENT

The older I get and the longer I am in acquisition, the more I despair of bringing any kind of discipline to the discipline. It is hopeless. We have too many presidential appointees and not enough informed thinkers and skilled doers. Training is pathetic and contracting officer certificates of appointment are handed out like candy on Halloween.

Federal appellate judge Richard Posner said it all in the title of an article he wrote for The New Republic in 2005: "Our Incompetent Government." http://www.tnr.com/article/politics/our-in...tent-government In that article he talks of "governance by cheap, showy gestures." I think that describes the OFPP memo perfectly.

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If OMB really wants to increase competition it should address those complaints by telling agencies to simplify their source selection processes, including selection procedures for task and delivery orders.

AMEN! I can?t tell you how much I agree with that. I recently awarded several IDIQ contracts against GSA Schedule contracts. Because of the dollar value, they required ?level above? approval - meaning my supervisor. By the time I was done with the award memorandum ? acceptable for ?level above? signature ? I had an 18 page document. EIGHTEEN PAGES FOR A GSA SCHEDULE BUY! And it took me about 6 months to award. Nothing has ever taken me 6 months to award (until I had to get ?level above? approval).

That is just nuts (or is it just me)? I fussed, and argued and discussed the need for such a lengthy document, but in the end I was told that we (meaning I) needed to adequately justify my award decision so that it could be defended in case of a protest. Honestly, I am not worried enough about a protest to justify an 18 page award memo for a contract against GSA Schedules. I would say that I am dealing with an Agency anomaly, but I don?t think so. I was told once, in response to a draft Determination and Finding that it was too short - that ?more is generally what the agency requires.? That is one of the dumbest things I have ever heard. There is a WIFCON Discussion I have in my favorites called ?Lacking the Simple Gene.? I know a few people who need to read it.

I haven't been with this Agency very long and have thought about leaving. But I'm not so sure it won't be the same most anywhere else I'd go - unless I get lucky.

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Despite President Obama's long history of criticizing the Bush administration for "sweetheart deals" with favored contractors, the Obama administration last month awarded a $25 million federal contract for work in Afghanistan to a company owned by a Democratic campaign contributor without entertaining competitive bids.

The contract, awarded on Jan. 4 to Checchi & Company Consulting, Inc., a Washington-based firm owned by economist and Democratic donor Vincent V. Checchi, will pay the firm $24,673,427 to provide "rule of law stabilization services" in war-torn Afghanistan.

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