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?
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.