I just received an announcement that the PRICE Act, Senate Bill 583, awaits the president's signature. It applies mainly to the Department of Homeland Security (DHS) and to OFPP. You can read it here: https://www.congress.gov/117/bills/s583/BILLS-117s583enr.pdf

Do read it. It's only five pages long.

DHS has done a lot of bragging about, and media promotion of, its Procurement Innovation Laboratory (PIL). The PRICE Act is one of the results. (Maybe the only real result.) Among other things we might be getting a new "working group" within the Chief Acquisition Officers Council.

Oh, boy!

This is how Washington DC works. I been through a lot of these exercises. It will be interesting to see how this one works out. In my experience, these things produce little more than phony success stories, like the phony success stories about performance-based acquisition (PBA), the greatest acquisition fiasco of all time. Never doubt the ability of a conspiracy of ambitious appointees, SESs, and Congress to make matters worse.

I don't know how this legislation is in the Department's best interests with respect to the mission of keeping us secure, but it might make a career or two.

Goodness! I've become such a cynic! 🤨

 

On my morning commute I was reading a book from the CSAF's reading list -  "The Last Warrior - Andrew Marshall and the Shaping of Modern American Defense Strategy" by Krepinevich and Watts. I underlined the following text discussing an interagency working group in 1972 which seems relevant to The PRICE Act's Working Group:

Quote

The steering group was populated with senior officials who lacked the time to devote serious intellectual effort to the assessment, and who also needed to satisfy the views of a wide range of  bureaucratic players and organizations. As anyone familiar with the workings of large government bureaucracies knows, the interagency process generally produces results that reflect compromises on substantive areas of disagreement among the group's participants. This leads to findings that are the least objectionable to everybody involved rather than those that are the most insightful and, not surprisingly, often the most controversial. p. 99-100

 

Lovely. Another required report to Congress.

This is what passes for acquisition reform these days, I guess.

SEC. 4. PROCUREMENT INNOVATION LAB REPORT.

(a) REPORT.—The Under Secretary shall publish an annual report on a website of the Department on Procurement Innovation Lab projects that have used innovative techniques within the Department to accomplish—

(1) improving or encouraging better competition;

(2) reducing time to award;

(3) cost savings;

(4) better mission outcomes; or

(5) meeting the goals for contracts awarded to small business concerns under section 15(g) of the Small Business Act (15 U.S.C. 644(g)).”

Is it [(1)-(4)] or (5)?  
(1)-(3) and [(4) or (5)]?
 

There are so many things wrong with our acquisition system.  There are also lots of ideas to improve things.  However most of those ideas go nowhere.  Some involve legislative changes.  Some involve FAR deviations or waivers.  Many just face an insurmountable battle with agency acquisition leadership, policy, and legal personnel.

One major thing the PIL has done is tried new things. That is far more than just about all the other agencies in the last few years have done combined.  Sure, many haven’t worked.  But at least they tried and showed others to test new ideas.

DHS doesn’t see failures as devastating.  Rather it’s viewed positively as a learning experience.

https://fcw.com/acquisition/2017/06/confronting-the-culture-of-fear-in-government/240776/

Anyone like PIL that is trying new things, whether they work or not, is worthy of recognition to me.  It’s so easy in the government to criticize but how many new things do we see tried?  or stated differently, how many new things have been tried lately outside of PIL?

15 hours ago, formerfed said:

One major thing the PIL has done is tried new things.

Actually, a lot of offices have tried new things. They just haven't ballyhooed like DHS.

An innovation is something new. But "new" is not key. Knowledge and competence are key. Sixty to 90 percent of all innovations fail. But not in contracting. In contracting innovations become "success stories".

There is too much emphasis on innovation instead of just doing things intelligently and rejecting the cut and paste approach. New got us formula incentive contracts and PBSA. We don't need a lot of new and "tools". We just need to do the necessary with intelligence and facility.

4 hours ago, joel hoffman said:

SEC. 4. PROCUREMENT INNOVATION LAB REPORT.

(a) REPORT.—The Under Secretary shall publish an annual report on a website of the Department on Procurement Innovation Lab projects that have used innovative techniques within the Department to accomplish—

(1) improving or encouraging better competition;

(2) reducing time to award;

(3) cost savings;

(4) better mission outcomes; or

(5) meeting the goals for contracts awarded to small business concerns under section 15(g) of the Small Business Act (15 U.S.C. 644(g)).”

Is it [(1)-(4)] or (5)?  
(1)-(3) and [(4) or (5)]?
 

Since each item is listed with a semi-colon and the next to last has “or”, it’s pretty obvious even to a hillbilly like me 😁

36 minutes ago, Vern Edwards said:

Actually, a lot of offices have tried new things. They just haven't ballyhooed like DHS.

Innovation is something new. But "new" is not key. Knowledge and competence are key.

Until we break through the mindset that the current accepted ways of doing acquisitions is the only way, improvements are so slow.   Senior agency officials, procurement executives and leadership, and legal counsel are reluctant to take chances.  Trying new things that work are great.  But if the news of success isn’t widespread, others won’t copy.  

NOAA and the Department of Commerce started using the purchase card around 1980.  It took GSA nearly 5 years to adopt it governmentwide.  It took another 10 years before it became widely adopted.  A good idea but a long time to become accepted mostly because everyone wanted to be certain it’s okay first.

The idea of pop quizzes in conjunction with oral presentations is excellent for many approaches.  I remember you mentioning that years ago.  But how many COs do that today?  I bet if a large pool were questioned independently now, the majority would say they haven’t done it.  That’s because of fear it won’t work and they won’t get support to try it 

40 minutes ago, formerfed said:

Senior agency officials, procurement executives and leadership, and legal counsel are reluctant to take chances.

That's because "senior" and "legal" ≠ knowledgeable. I have talked to very "senior" people and lawyers who were shockingly ignorant—not only of the regulations and case law, but of practical fundamentals. It's like putting people who have taken a couple of glider lessons at the controls of a 737MAX full of passengers and telling them to fly from LAX to BAH.

A chief of a contracting office and a CO need the deep knowledge, ability, and confidence to improvise, adapt, and overcome.

2 hours ago, formerfed said:

Since each item is listed with a semi-colon and the next to last has “or”, it’s pretty obvious even to a hillbilly like me 😁

It was meant to be a tongue in cheek comment. “Let’s report on what we did to improve competition, reduce award times, save money, achieve mission requirements… or…if that didn’t work…what the heck …what we did to achieve the small business goals.”

Hmmm, neither cost nor savings?

https://www.cbo.gov/system/files/2021-04/s583.pdf 

11 hours ago, Vern Edwards said:

New got us formula incentive contracts

Vern,

This just piqued my curiosity this morning.  Could you regale us with the results of this innovation?

Are you asking me to address whether incentive contracts have been effective?

I’ve been in contracting since 2009.  I’ve heard of how OFPP moved us to PBSA, but I’ve not heard of the formula incentive contracts innovation of which you speak.  I’m really wondering if you mean something from the distant past or if you mean something from the Better Buying Power memos (which I can find readily).

My office’s CPIF contracts are shadows of the office’s past, with no delivery (schedule) incentives - only cost.  This is despite the fact that time till closure of our sites is our biggest liability.  I want to apply a historical perspective to my current workload of incentive contracts, hence I logged in and asked.

See FAR 16.402 concerning formula incentive contracts.

There are three formula incentive contract types:

• fixed-price incentive (firm target) FPI(F)
• fixed-price incentive (successive targets) FPI(S)
• cost-plus-incentive-fee (CPIF)

Incentive contracts have been around for a long time. Since before WWI.

The FPI(F) was used by the Navy in WWII for shipbuilding, but abandoned due to lack of audit resources. The CPIF has been around since at least the early 1950s.

The FPI(F) and the CPIF were used during the 1950s. In 1961, Secretary of Defense Robert S. McNamara boosted them as an alternative to cost-plus-fixed-fee contracts and a way to control weapon development costs. Congress thought they were a scam, which is why they passed the Truth in Negotiations Act (TINA) in 1962. Originally, TINA would have applied only to formula incentive contracts.

A lot has been written about the formula incentives. Studies have been made of them by Rand, Harvard, and the GAO. The general consensus among those who have studied them is that there is no evidence that they work as advertised. Perhaps the most comprehensive study was done by Professor John J. Kennedy of the Notre Dame School of Business in 1983 for the Air Force: Incentives and Cost Control. An earlier comprehensive study was done by Peck and Scherer of Harvard, The Weapons Acquisition Process: Economic Incentives (Harvard, 1962).

Here's a link to the Kennedy study (484 pages). You can access and download it at https://apps.dtic.mil/sti/pdfs/ADA140930.pdf.

Read that. Then return with questions, if you still have any.

 

Thanks for your time.