Improving Transparency in Federal Government May Improve Innovation

A while back, Nick Wakeman, of Washington Technology, went on a self-described “rant” about the lack of transparency in awarding task orders on certain contract vehicles. 

Allow me to continue the rant.

One only needs to do a cursory review of the Interagency Contract Directory (contractdirectory.gov) to see the enormous amount of contract vehicles across government. By applying a layer of data analysis on top of it, a frustrating pattern emerges at the lack of information available on awards off of these vehicles, or information on the vehicles to begin with.

According to the website:

…The main purpose of ICD is to help agencies take advantage of interagency contracts by supporting market research and the identification of suitable contracts that can facilitate the efficient and effective placement of orders, including with small and disadvantaged businesses. The new ICD will strengthen both of these goals by making the tool more intuitive and easier to use… 

As Nick mentioned is his blog:

…This task order is worth $224.4 million. That’s nearly a quarter of a billion dollars. This is a big deal. Why keep it hidden?...

Why indeed. 

I agree wholeheartedly with Nick that transparency into larger awards should be mandatory, as there simply is too much secrecy with the amount of money flowing through all the contract vehicles across government. Perhaps the $10 million threshold Nick mentions might be a good start. I know many small businesses spend countless hours trying to find out information about these activities, with little success unless you have some insider knowledge. 

As Nick mentions, disclosure would not only bring more transparency to the process, but valuable data can be another component to offer small businesses an important pathway to opportunities which are currently closed. 

However, I also want to take transparency a step further in the pre-solicitation phase, by finally allowing some transparency to shine on responses to sources sought notices across government. 

One of the main issues here is that procurement personnel often complain about the poor responses, or lack of responses, by small businesses. Granted there is very little review of why this might be occurring, but perhaps another data point on Fedbizopps.gov might be something to explore.

Currently, firms can list themselves as an “interested party”, and appear under the tab labeled Interested Vendors List. What if we took this a step further, eliminated the Interested Vendors List, and actually created a way to show firms that have actually responded, and create a tab with this data called “Respondents”?

This would eliminate many of the firms that are simply fishing or unqualified, unscrupulous legal firms who are “experts in protests” advertising on these notices, scammers and spammers, and provide real data on who is responding and their capabilities. 

I know I always wonder: 

• Whatever happened to my response?
• Was it received?
• Is there any opportunity for follow up?
• Who I might team with?
• What were the results?

Perhaps with this data, small businesses can find more opportunities to find teaming partners, and for firms to find complementary solutions to improve service delivery and performance. 

Of course this would all need to be automated, as the last thing we want, or need to do, is put further burdens on the acquisition workforce. 

Transparency is always a good thing to improve competition, opportunities for small businesses, and procurement outcomes. Let’s open the curtains and see what is possible.

Is Acquisition Reform at the Pentagon a Lost Cause?

wired.co.uk

One of the clearest signs that the Pentagon, or at least the Air Force, has seemingly thrown in the towel on any reasonable approaches to “acquisition reform” is the news that the Air Force has turned to IBM’s Jeopardy-winning cognitive computer, Watson, to tame the beast that is defense procurement.

…The idea is to create a “bureaucracy buster, or let’s call it a decoder,” said Camron Gorguinpour, a senior official in the Air Force’s acquisitions office…

…The Pentagon’s procurement system is the “perfect application for Watson,” Gorguinpour said. “While our acquisition system is very complex, it is document based. . .It’s unreasonable to expect that a single individual or even a group of individuals to be able to fully understand all of the relevant documents to answer a specific question.”…

This initiative is not intended to replace the acquisition workforce, but to help enhance making more efficient procurement decisions.

…The system will not only help government procurement officials do their jobs—by being able to query the system to find out, for example, whether a contract can be awarded on a sole-source basis…

This is nothing short of textbook treating the systems of a disease, and expecting a silver bullet approach to taming a monster that has many cooks in the kitchen. Decades of neglect and cutting the acquisition workforce has made the proverbial chicken come home to roost. Not only is training insufficient, it is not preparing the workforce for the types of challenges they currently face. Further, the hiring process is just not getting the type of talent in the contracting, project management, engineering, and IT fields that are necessary to execute the mission.

Nonetheless, Congress needs a hard look in the mirror as to why the system is so complex, and in many regards, broken. The years of “fixing” issues with more and more legislation, more and more broken policy, and more and more oversight has created a bureaucratic mess.

One lonely voice in the crowd is Dan Ward, a retired Air Force Lieutenant Colonel, who has written several books on real world examples of rapid technological innovation, despite the defense procurement system. His work should be must-reading for all involved in acquiring goods and services at the Pentagon, and hopefully help those realize there is a better way.

 I just find it disheartening the sheer frustration at the inability to make real change happen at Defense, to the point that Watson has to be brought in for relief. Mr. Ward demonstrates that there is a better way, but when no one is listening, I suppose the approach is akin to surgery using a chainsaw, and not a scalpel.

I wonder if Watson will find fault with it’s own contract?

Performance Incentive Strategies for Improved Contract Management

www.ecohome.net 

Continuing the conversation started by Dr. Steve Kelman on FCW and from mylast post on improving contract management, one way highlighted was better use of performance-based contracts.

During some research for a project this week, I couldn't help notice the supposed incentives these performance work statements (PWS) included. I reviewed the PWS for almost five contracts across several agencies, and what was almost the universal incentive?

...Satisfactory contract performance will result in a positive past performance review...

The negative incentives were almost all the same as well, namely:

...Unsatisfactory contract performance will result in a negative past performance review...

I suppose you can categorize this "incentive/disincentive" plan as non-monetary. However, this is nothing short of mandatory contract management functions required under Federal Acquisition Regulation Part 42.

However, the reality is that incentives should motivate a contractor to achieve higher than average performance levels, consistent with economic efficiency and risk. To this end, incentives need to ensure that they are effective, and that they reflect value both to the government and to the contractor.

As I previously stated, effective contract management starts in the beginning. Early planning is essential in determining and defining requirements in clear, concise language. Further, there needs to be a focus on specific work outcomes to ensure that they are to the greatest extent practicable based on the SMART acronym: 

• Specific – target a specific requirement. 
• Measurable – quantify an indicator of progress. 
• Achievable – specify outcomes that are possible and can be successful. 
• Realistic – state what results can realistically be achieved, given available resources. 
• Time-phased – specify when the result(s) can be achieved. 

Collaboration with industry is also essential. Through market research (i.e. industry days, one-on-one sessions, draft solicitations, etc.), industry feedback needs to be solicited regarding performance objectives, requirements, standards, and incentives.

I always prefer monetary incentives, again keeping in mind SMART. Working in conjunction with industry partners to achieve the desired outcomes, incentives should be consistent with the effort and the contract value. They also must be carefully structured to consider the overall impact for providing value in achieving the mission, and to avoid any unintended consequences. Further, if the incentives are not clearly communicated, or through a lack of communications between the government and the agency regarding desires and expectations, there will be little chance of achieving the desired outcome.

Positive incentive examples: 

• When performance exceeds standard, pay x% of monthly payment into pool. At end of y months, pay contractor amount accrued in pool. 
• When performance exceeds standard, pay x% of monthly payment into pool. When pool has reached y dollars, pay contractor amount accrued in pool.

Negative incentive examples: 

• When performance is below standard for a given time period, x% of that period’s payment will be withheld. 
• When performance is below standard for a given time period, require the contractor to re-perform the service at no additional cost to the government.

Simply stating that a negative past performance rating will be the result of poor performance, with little information or desire about how the contract will be managed, is a recipe for mediocre performance and not an effective way to execute performance-based acquisition.

A very effective tool is the Guidebook for Performance-Based Services Acquisition (PBSA) in the Department of Defense. It is worth a read, and provides a good roadmap to helping ensure a contract has a better chance of success through the upfront work necessary to realize better contract management outcomes.

Contract Management Starts at the Beginning

http://www.billgenie.com/

As part of a continuing discussion on contract management, former Administrator of the Office of Federal Procurement Policy, Steve Kelman, blogged about the need to focus on this issue on Federal Computer Week. 

Responding to this call, ASI Government is allowing access to some of their tools, which are normally only provided as part of a subscription to their Virtual Acquisition Office. These tools are a good primer on contract management, and should provide some useful reference for those seeking to learn more about how to effectively manage contracts.

Nonetheless, effective contract management can only be successful if a real, outcomes-based focus is done upfront, and before the contract is even awarded. The acquisition reform initiatives currently underway across government continue to be focused primarily on pre-award contracting functions, without a clear path on how to effectively manage these contracts once they are awarded.

Why has this been problematic? First and foremost, failed leadership continues to plague effective contract management. Either through a lack of attention to agencies' contracting activities, or the inability to properly analyze data through antiquated or ineffective contract management solutions, it seems like senior officials remain blissfully ignorant of waste and abuse. As reported by the Government Accountability Office (GAO) in testimony from 1992: 

…In other cases, senior officials have not made managers accountable for effective contract administration, nor have they made a sufficient commitment to correct contracting problems that have surfaced…

It seems little has changed in the almost 25 years since this testimony was given. Even recent testimony by GAO describes ongoing issues with contract management, as they relate to services contracts: 

…As we testified before you in May, Mr. Chairman, agency procurements of services often are not being conducted as efficiently as they could be. We have found that too frequently agencies are not clearly defining their requirements, fully considering alternative solutions, performing vigorous price analyses, or adequately overseeing contractor performance. Such problems clearly point to a need for more focused management attention… 

This report describes several areas of needed improvement. Namely, strong Chief Acquisition Officers across government with clearly defined roles and responsibilities, improved training of the acquisition workforce, and better adoption of performance-based contracts.

However, if we want to start fixing contract management issues across government, we need to start at the beginning, and have leaders across government who recognize the problem. These leaders need to be engaged, and have the ability to address the problems from the ground up if we expect any real change.