Federal Acquisition Change (Part 1 of 3)

This is going to take some time to pull apart. This is a game changing article published in the Washington Post today. The article reveals that 3 separate memos have been released that are likely to reshape the acquisition landscape for the federal government.

The first memo, Improving Government Acquisition, has two main thrusts, Acquisition Savings, and Reducing Risk. The acquisition savings area identifies 5 actions:

1. ending contracts that do not meet program needs or projects that are no longer needed,
2. building the skills of the acquisition workforce and recruiting new talent so as to negotiate more favorably priced contracts and manage contract costs more effectively,
3. developing more strategic acquisition approaches to leverage buying power and achieve best value for the taxpayer,
4. increasing the use of technology to improve contract management, and
5. reengineering ineffective business processes and practices to reduce cost to spend.

Each of these is good, and will make an impact. If there is a surprise in this list, it is #1, I don't think we need more help in eliminating projects that aren't needed, but that might just be me. Incidentally, I haven't blogged about this yet, but I recently finished a proposal panel exercise in which we used SharePoint to capture the consensus scores and strengths and weakenesses of the proposals. That's a good hit for me on #4.

The Reducing Risk part of the memo makes me a little bit nervous. Remember my post about Choosing the Right Vehicle? This memo throws a lot of the risk onto Time and Materials (T&M) types of contracts. While I am in agreement that there is a general overuse, It makes me very nervous when I see guidance like this, because there is a specific time and place for T&M based contracts. If the government cannot effectivley judge the level of effort that will be required to complete the project, that is when you should use T&M types of contracts. Activities like Requirements Gathering, and many Design types of activities in which you must keep going until the business agrees that you have it right (scope), it is done well (quality), with the right level of customer satisfaction are best left to T&M contract types. I don't know when I begin these types of activities how much effort the contractor will have to pour in to achive the necessary levels of scope, quality and satisfact when I begin. Because I cannot identify how much effort, if I try to fix the price I am actually increasing the risk in that one of two things will happen:

• Offerors will increase the cost in their proposals to account for the increased risk or
• No accounting for the increased risk will sacrafice scope, quality and satisfaction such that when the contractor has spent the money, they must move on regardless of whether they got it right, did it well or made anyone happy in the process.

Trust me, I have first hand experience of this dynamic at work. The real problem is that most offerors will choose to do the former and one or two either shady or dumb ones will do the latter. The government performs its review and the contractors in the latter category almost always win.

Anyway, a lot to talk about in that first memo. There are two more. I'll hit the Managing Multi-sector Workforce and the Improving the Use of Contractor Performance Information in subsequent posts.