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On 2/27/2022 at 11:22 AM, Vern Edwards said:

@formerfedIn government service contracting, the main advantage of a relational approach is the conscious recognition of the nature of services, the conditions and circumstances under which long-term and complex services are performed, and the realization that ex ante (up-front) full specification of requirements is not possible. Thus, PBSA, as described in FAR, is not realistic. The parties will, to some extent, have to make it up as they go along, adjusting to unforeseen conditions and circumstances as necessary and appropriate. The government's typical "command-stye" ("the contractor shall") and formal approach to contract management is poorly adapted to such contracts. It is too formal and too often creates. A relational, businesslike approach, undertaken by knowledgeable, sophisticated, and reasonable persons, is much more likely to be fully satisfying to all. But it takes know-how and self-confidence.


@Vern Edwards This reminds me of Agile development and the governments failed attempts to use it 12-15 years ago.  Agile uses just a high level vision to start without detailed specifications or SOWs,  government and contractors working as teams with daily standup meetings, continuous communication, agreements reached through a team charter, and “make it up as they go” working against a continuous stream of user stories each of which get prepared just-in-time.   Software is produced in tiny increments, given to customers to test and get feedback, and then refined and move on to the next increment. 

Simple concept that worked well in the private sector but took a decade for the government to get it right.  Between all the efforts to avoid personal services, push for fixed price orders instead of labor-hour, lack of definition for acceptance of work, and source selection processes that didn’t come close to identifying true attributes of a successful contractor, it flopped.

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@formerfedFor all its yapping about innovation, our government has rarely been a source of real administrative or business innovation.

Instead, government policymakers seize upon ideas from academia and business literature, such as reengineering, performance contracting, and agile development. Remember the book of the early 1990s, Reengineering the Corporation, which the Clinton administration turned into "Reinventing Government," which it then used to decimate the procurement workforce? Remember TQM? Remember the teams movement?

The problem is that the government latches on to such ideas when they are fads, before they have been thought through, and before critiques and adjustments have been made. Political appointees and career "managers" seize on those fads, like performance-based contracting, bloviate in interviews and at conferences, and push them as the keys to the future. They don't often focus on the hard work of thinking things through. Instead, they move out and ballyhoo on the basis of superficial knowledge and uncritical thinking. Eager beavers seize on the fads, prepare PowerPoint presentations, and then strive to become the local goto "expert." God save us from ambitious overnight "experts".

Relational contracting, although it has attracted some attention, has never achieved ballyhoo status, because most government contracting people have never read a serious treatise on contracting. They can't get through articles like "The Many Futures of Contracts" or "On Goods and Services"; never heard of Ian R. Macneil, Stewart Macaulay, or Peter Hill; don't understand what relational contracting has to do with anything they do; haven't studied the literature; and have not worked in contracts in the purely private sector.

I don't think relational contracting is a cure-all, but I do think it could produce better results from long-term complex service contracts if the contracting workforce had what it takes to pull it off.

Relational contracting requires deep thinking and savvy implementation. It is not for novices or apprentices. It will never be adopted by the government on a widespread basis, but savvy individuals can pull it off under the right circumstances, especially those working in the world of Other Transactions, since they have some freedom from standard government contracting rules.

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I didn't think this warranted a new thread, but I have taken on Vern's challenge to read widely about relational contracting. I came across an article titled, "The Many Futures of Contracts: Moving Beyond Structure and Safeguarding to Coordination and Adaption" the other day. The article is full of jargon and I think of limited use, but it does have some insightful nuggets. I thought this one was important, "With increasing transactional complexity (e.g., interdependence between parties), we should not observe more complex contracts; instead we should see more clauses in contracts that give broad decision rights to one party or specify procedures for centralized or consensual decision making." 

It struck me as something that was worth thinking about. 

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The article is full of jargon and I think of limited use, but it does have some insightful nuggets. 

In fairness to the authors, the article is a review of the scholarly literature. It was not written to be a how-to.


In this article, we review the literature on interfirm contracting in an effort to synthesize existing research and direct future scholarship.

The article is very useful if you want to know what scholars have thought about the subject from the mid-90s to about 2012. Knowing that can help practitioners bridge the gap between current and future practice.

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