Government, industry still can’t figure out how to talk

Maybe it’s time for agencies and industry to get some professional help.

Someone who could help each party communicate about their fears, needs and, maybe most of all, assist them in listening to the other side.

A year into Office of Federal Procurement Policy administrator Anne Rung’s vision of where she wants to take federal procurement during her tenure, industry and government communication continues to struggle.

Rung made improving contractor and agency communication a central theme in her Dec. 4, 2014 memo detailing her plans.

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She highlighted three broad concepts in that strategy:

  • Category management — OFPP defined it as the need to “drive performance, like developing common standards in practices and contracts, driving greater transparency in acquisition performance, improving data analysis, and more frequently using private sector (as well as government) best practices.” OFPP and the General Services Administration  highlighted their progress in an October 2015 blog post.
  • Acquisition workforce talent development
  • Stronger vendor relationships

So I decided, on the suggestion of an industry friend, to check-in on the progress agencies are making on each of these areas with several federal acquisition experts.

Generally speaking, most of the experts gave OFPP high marks for efforts over the last year.

“OFPP certainly has been consistent in trying to drive behaviors outlined in their memo. They believe in category management. They want to reduce overall expenditures,” said Larry Allen, president of Allen Federal Business Partners. “I think their biggest challenge is educating the agencies on what these things mean, and to some extent that they even exist. After education comes compliance. This is always a difficult task for OFPP as it has few instruments to ensure compliance. So, I’d give them an ‘A’ in terms of following up and staying focused. How reforms are implemented are a bit beyond their control.”

The industry experts all seemed to highlight the progress around category management.

Roger Waldron, the president of the Coalition for Government Procurement, an industry association representing mostly General Services Administration schedule contractors, said GSA’s efforts to consolidate the professional services schedule is a big win for category management.

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“This was something that has been needed for a long time to reduce contract duplication,” Waldron said. “At the same time, it’s been a decade that we’ve been calling for the addition of other direct costs to schedule contracts and we are still waiting for that change.”

Other Direct Costs are a way for firms to charge the government for unforeseen costs. Contractors cannot charge for ODCs under schedule contracts currently.

Raj Sharma, chairman of Public Spend Forum and CEO of Censeo Consulting Group, agreed that category management both holds the highest potential and has made the most progress.

He said OFPP, GSA and other acquisition leaders need to continue to focus on the implementation “so this doesn’t become the next flavor of the day.”

“We have to be careful that the focus isn’t on centralizing spending as much as coordinating. That is an important difference,” Sharma said. “Agencies see category management, much like strategic sourcing, as a play toward centralizing spending toward GSA and a handful of agencies. The government is too large even on the most basic categories to centralize, but coordinating spending in terms of best practice approaches, gaining visibility into pricing, having tools/templates is absolutely the right thing to do. So if we can focus more on coordination through category management and make sure agencies understand that, that is going to go a long way towards gaining participation.”

Trey Hodgkins, senior vice president for public sector at the Information Technology Alliance for Public Sector (ITAPS), had a different take on category management.

“It’s not at the point yet where we can judge its success or lack thereof,” he said. “The hallways are not open yet to industry. GSA hasn’t hired all the leaders in product of categories yet, and frankly there are concerns that I’ve heard about turning over marketing to GSA for all these contracts because GSA is a competitor.”

Workforce needs better, more training

The acquisition workforce and communications with industry didn’t get really any accolades.

Nick Nayak, a former chief procurement officer at the Homeland Security Department, said while OFPP’s goals are on-target, one should get more attention.

“The biggest challenge — all areas are important and since acquisition is still primarily work accomplished by people (and not machines), investment in the right numbers of people that are well trained is critical to achieving success in all the focus areas,” he said. “My perspective is that many good thoughtful people over time are, have and will evolve the procurement workforce and policy.”

The training of acquisition workforce is especially needed when it comes to buying technology.

Allen said the gap is growing between number of contracting officers with the skills to buy technology and the need from agencies.

Sharma added that while the agile procurement run by GSA’s 18F organization is a good start and shows promise, the lack of focus on training the acquisition workforce continues to be worrisome.

“In many ways, the workforce has been poorly served by the leadership in that current training systems are too focused on process and regulations and we are not training our people on other critical skills like problem solving, negotiation, relationship building,” he said. “Additionally, we lack the expertise both from a customer and industry standpoint, and that can only change by realigning the workforce by customers and/or industry. What we need is a comprehensive review of the training and development ecosystem, something we are starting to look at.”

Hodgkins added improving the acquisition workforce will take years, but the training from the Federal Acquisition Institute, especially focused on market analyses is a step in the right direction.

“We have to convince workforce it’s okay to talk to vendors and get a better understanding of what is the art of the possible to solve problems,” he said. “The risk aversion is the culture of the day in the acquisition workforce and in management, frankly, and you have contracting shops that are specifically designing offerings expecting a bid protest. That is the wrong way to start. And industry is 50 percent of the problem because we are the ones that protest. But the government doesn’t effectively communicate in all corners.”

Communication breakdowns

That segue ways us to the industry and government communication and collaboration.

For many experts, this continues to be the biggest stumbling block toward better acquisitions.

OFPP stated in the memo that it, along with the CAO Council and the FAR Council, would submit recommendations to OMB’s deputy director for management on ways to reduce the burden on commercial item acquisitions.

“To date, however, no public disclosure of such recommendations to the Deputy Director for Management can be found,” Waldron wrote in a blog post on Dec. 4. “In the interest of transparency, coalition members, as well as all of industry, welcomes the opportunity to review these recommendations and work collaboratively with OFPP to improve commercial items contracting.”

Allen expanded on the issue of industry and government communications.

He said there are two opposing forces at work — those who want to reform acquisition and those who the government believes needs special clauses and protections.

“Nowhere is this divide better illustrated than at Defense Department,” he said. “On one hand there is [under secretary of Defense for acquisition, technology and logistics] Frank Kendall, at least philosophically in tune with Capitol Hill if not on specifics. They understand the need to streamline rules and processes. On the other, there are people like [director of Defense pricing] Shay Assad, who ironically works for Kendall, and the ‘Bending the Cost Curve’ people in the Air Force who want to look at each cost under a microscope and get only the low price solution. One of these approaches promotes faster, more competitive and innovative acquisitions, the other ensures that only entrenched traditional DoD contractors will be able to participate in the DoD market in any meaningful way.”

Now as for 2016 and beyond, several of the industry organizations implore OFPP to make a more serious effort to reduce the regulatory burden on vendors.

“Fundamentally, alterations to the procurement process that increase burdens, impose unnecessary restrictions, and limit access to the federal market are not in the interests of customer agencies and the American people,” Waldron wrote.