Re-branding Government Contracting, Mission Impossible?

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An interesting question was posted by Francis Rose of FederalNewsRadio.com on the bad reputation of the federal contracting community in a recent article titled “Why do feds and contractors have such a bad reputation outside DC?"

The federal government, and contractors that supply goods and services to the government, do amazing, lifesaving work every day. We normally take for granted these services, like clean air, safe water, and the one of the best standards of living in the world.

So why do feds and contractors have such a bad reputation outside DC?

Well, there is no question that there is a concerted effort, driven by politics, to denigrate public service and the government itself. Regretfully, these messages are very powerful, and overshadow those messages of the important work the government, along with support contractors, currently perform.

However, the two points Mr. Rose makes are both a question and an enigma:

…Government should be more aggressive in telling its good news to people who understand it, and want to hear and repeat it…

No doubt. This is one thing that government does very poorly. Strategic communications is just something that government apparently does not seem to do well, especially as it pertains to sustaining a message, and getting stakeholder buy in.

When the MythBusters initiative launched at the Office of Federal Procurement Policy (OFPP) in 2011, I had always made it a point to cover this initiative, as it pertained to market research and communicating with industry, in classes that I taught to federal project managers. Many students had heard of this campaign, and the information we covered in the classes resonated well.

A few years later, it is rare that any student has even heard of the initiative.

One initiative that can hopefully turn this trend around comes again from OFPP, by way of the Anne Rung, the administrator, who launched a series of podcasts highlighting successes with some agency's prominent procurements.

The inaugural podcast featured Mark Naggar, project manager of the Department of Health and Human Services' Buyers Club. He detailed the use of the TechFAR Handbook and the Digital Services Playbook, on which his team built services using agile and iterative practices to and quickly contract and deliver the development of IT system prototypes.

It is these type of things that government should do more of, and get the message out there about success government is having.

The second point:

…Companies that sell in the government space should be more thoughtful about the stories they tell…

This one is a mystery. Many companies spend substantial resources on creating case studies, white papers, and discussing their products and services as a part of their marketing. Nonetheless, the message about their great work seems to be lost in the cacophony of failures of government, and how contractors are either at fault or guilty by association.

I could not agree more with Mr. Rose, as we need more success stories out there from both sides. They exist, so we all need to help overcome the challenges that missteps create in exacerbating an already bad public perception.

Acquisition 360: Will Anyone Listen?

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This past week, Office of Federal Procurement Policy (OFPP) Administrator Anne Rung, released guidance on a new initiative to help improve the acquisition process. This new initiative, known as Acquisition 360, is a proposed rating system to gather feedback from government and industry stakeholders on particular IT acquisitions. Ms. Rung’s memo provided stakeholders the surveys necessary to garner this feedback, but many questions remain about the utility of this initiative, and whether or not stakeholders will use the data to actually improve the acquisition process itself.

The idea is not necessarily new, as it has been compared to a “Yelp” like review tool to give broad information to give decision makers a high-level view of potential problems with a particular acquisition at the tactical level. Further, the mechanism was piloted at the General Services Administration with their Governmentwide Acquisition Contract One Acquisition Solution for Integrated Services or OASIS.

Acquisition 360 has review mechanisms for both industry and government. The surveys are not meant to be a tool to provide a critique of individuals, but rather, the process itself.

Although Ms. Rung, and Deputy Administrator Leslie Field addressed some of the questions about the efficacy of this initiative with Jason Miller of FederalNewsRadio.com, three fundamental questions remain about potential for these surveys to be successful:

(1) Will stakeholders actually complete them?  – From the government’s perspective, it is yet more potential paperwork given to overburdened acquisition personnel. Stakeholder engagement may be difficult, even though thoughtful feedback may pinpoint potential issues that require further root cause analysis and subsequent re-engineering to address. Nonetheless, this initiative can be seen as a way to target personnel, or further mechanisms for oversight and accountability. Although these surveys will not be used for this purpose, perception can be reality.

(2) Is anonymity ensured? – Although industry covets the opportunity to provide constructive criticism to improve the overall process to engagement and doing business with the federal government, firms may be weary to provide this type of information for fear of possible retribution. Companies often dare not rock the boat, as retribution can be swift and damaging to a company’s reputation. Further, the government can certainly make an educated guess about who would be providing the criticism, based on the circumstances of a particular acquisition.

(3) Will the feedback be useful? – The surveys are intended to provide comprehensive, high-level feedback on the end-to-end pre-acquisition process. Assuming thoughtful comments that provide enough information for decision-makers, will these managers for both government and industry use the information to improve their internal processes?

The reality is that the current environment is a type of Cold War, where industry and government are in a state of almost rampant animosity. It is a vicious circle where firms are on the offensive with protests and challenges to government procurement, due to budgetary pressures and ferocious competition for every federal dollar spent on goods and services. Government has almost battened down the hatches, hoping to weather the storm of criticism of every move, and thus believing that openness and transparency through collaboration and communications is a losing proposition.

These barriers only continue to grow stronger, and productive opportunities to improve the process through communications continue to be a challenge. However, changes are desperately needed. 

No one is expecting this initiative to be a silver bullet, but I applaud OFFP and Ms. Rung for proactive action to break the barriers that hinder constructive change and open the doors to communications. 

Mythbusting in Action – Communications and Their Value

The July 2013 edition of Contract Management magazine, published by the National Contract Management Association (NCMA), included an encouraging article on how communications between government and industry not only can improve outcomes and business relationships, but also show positive results to improve requirements and the opportunities for better outcomes overall.

The article, “MythBusting – Communications with Industry,” (subscription required through NCMA membership), written by Jeffrey D. Claar, a senior procurement analyst with the Program Executive Office for Simulation, Training and Instrumentation (PEO STRI), describes the successes at the establishment of monthly PEO STRI Acquisition Center Procurement Administrative Lead Time (PALT) Industry Days.

These monthly forums demonstrate the way procurement offices are changing the dynamic of what most “normal” Industry Days entail, which are time-consuming ways for government to advertise requirements that most commercial professional business development types know better than government personnel at the front of the room. Further, rarely are productive question asked, as industry attendance is normally for scouting competition or finding potential teaming partners.

However, living the spirit of the Office of Federal Procurement Policy's MythBusters is principal assistant responsible for contracting (PARC), Joseph A. Giunta, Jr., who stated these forums are “a means of providing ground truth and situational awareness of PEO STRI’s Acquisition Center procurement process and ongoing procurements.”

The article goes on to talk about the value of the program, and how communications have helped foster a collaborative environment.

…Since August 2011, PEO STRI PALT Industry Days have grown exponentially, serving the contracting community, requiring activities, and industry partners alike. The monthly PALT Industry Day venue provides industry representatives with the status of PEO STRI programs, ongoing procurements, and the distinct opportunity to request updates on specific procurements of interest in a Q&A-type forum. These types of venues have indeed enhanced communication and have enabled PEO STRI to respond faster to critical, emerging requirements with innovative acquisition and technology solutions, thereby putting the power of simulation into the hands of our nation’s warfighters.

Recently, as a result of sequestration, PEO STRI’s monthly PALT Industry Days have swelled to more than 220 industry representatives and taken on a “standing room only” reputation. As a result of this overwhelming desire by industry, alternative overflow seating and viewing capacity have been predicated…

Further, the exchanges have been helpful and productive for both parties, which one would expect when open and honest transparency, combined with a spirit of collaboration are created, to develop better requirements and provide actionable information for industry consumption:

…At its core, the PALT Industry Day sessions are driven by industry’s questions and not a fixed government agenda. Industry attendees routinely ask questions to a senior PEO STRI panel—consisting of the PARC, deputy PARC, division chiefs, program managers, and legal representation, as well as the Small Business Program Office and a host of contracting officers—about contract types and PALT milestones associated with a specific procurement. This has enabled industry representatives to better allocate resources and facilitate their investment decisions.

In this unscripted setting, industry partners have been more open and comfortable with sharing information, and in turn, as Giunta noted, “Better information is obtained for the acquisition community and for industry partners to support their pre/post-award activities.” Giunta went on to state, “While the sessions are in essence driven by industry, we do have the ability to push information to industry, leading to an educated partner.”…

As the sequestration vice tightens, it is even more important than ever for industry and government to share vital information on how missions will be supported with even more limited resources and contract opportunities.

It is encouraging to see procurement shops proactively improving their relations with industry through communications, and we can expect better outcomes as a result.

Institutionalizing MythBusters: The Need for Better Industry and Government Collaboration

Last week, the American Council for Technology and Industry Advisory Council (ACT-IAC) conducted their inaugural 2013 Mythbusting Awards to three Federal agencies for their work in improving vendor communications in the acquisition process. The program also contained a forum on Mythbusting, in addition to breakout sessions on various MythBusters issues related to the previous memos and survey results released by ACT-IAC. Lastly, the program recognized the agencies (Department of Homeland Security or DHS, The National Reconnaissance Office, The Department of State) making improvements in the way they interact with collaboration, and to share those results and best practices with the group.

Having attended the event, I think any opportunity to acknowledge and discuss the value of industry and government collaboration is an important step in improving acquisition outcomes. Like most ACT-IAC events, it was well done and productive.

I discussed this event with an acquisition official that did not attend, but more importantly, did not think this event or initiative had any merit. His belief was that government officials should not be rewarded simply for doing their jobs, and industry should not be granting awards acknowledging what they should be doing in the first place.

He makes a valid and interesting argument, no doubt. However, it is too easy to dismiss recognizing those that are making a positive impact on government management.

In fact, these types of awards should be handed out with more frequency, as the knowledge transfer would be invaluable to reverse the trend of the closed-door policies that seem firmly entrenched in regards to government and industry relations.

In these fiscally austere times, communications between industry and government are vitally important to develop affordable programs, and to ensure that requirements for programs are done in an environment of realism.

I am not talking about what passes for market research these days, which is the government issuing a Request for Information, and then that is it. In the award citation by ACT-IAC, DHS was cited for creating initiatives to lower barriers to effective communication:

The Department of Homeland Security emphasizes quality government-industry communication as part of its strategic plan and its new vendor communication framework.  DHS created an industry liaison council and a small business council to increase the effectiveness of its dialogue with industry. DHS has rolled out industry- led seminars to educate the acquisition workforce on private sector business processes, and appointed two personnel as centralized resources for vendors seeking information about DHS acquisitions. DHS has also developed seven industry-government communication metrics to measure its success.

It is about, as Office of Federal Procurement Policy Deputy Administrator Lesley Field noted, "institutionalizing Mythbusting." That is to say, creating a culture where effective industry and government relations, communications, and collaboration are the norm and not the exception.

Further, we are in a desperate need of shifting the culture of risk aversion and lack of accountability, combined with an understanding of the value that effective communications with industry bring to the table.

It is a fact that better relationships between government and industry create more value to the taxpayer, through improved outcomes, and less fraud, waste, and abuse. Now is not the time to shut doors, but to open them, so that government can communicate what it can afford, and industry can communicate what value it can provide at the affordability targets. Will revisions in requirements be necessary? What about adjusting expectations?

No question. However, how do we do that if we are not talking to each other?

Industry is not the enemy. There is no silver bullet here, but we must continue providing the opportunities and tools to the acquisition workforce on how to conduct market research, and the value it brings.

“There is no time” is not a valid excuse. There seems to be endless amounts of time to correct mistakes, but never enough time to prevent them for occurring in the first place. Acquisition planning and forecasting is a strategic initiative that must be made a priority with leadership, and not be treated as a paper-pushing exercise.

Until then, let’s keep presenting these awards.

Saving Money Is Now A Good Thing: The Great Paradigm Shift

I always have to scratch my head at the curiosity of how the federal government operates in regards to budgetary matters. Although commercial best practices are all the rage in government, such as trying to leverage technologies and become more efficient, innovative, and agile, the one area that always seemed to be polar-opposite was the budget.

Commercial entities, specifically publically traded companies, have accountability to their shareholders and Wall Street (mostly Wall Street). As such, increasing productivity and lowering costs has always been a critical driver in efficient corporate operations. Unlike federal leaders, corporate leaders are held accountable for what is viewed as wasteful or excessive spending.

Although the federal government has made several initiatives as of late to increase productivity, it has always been, and continues to be, the accountability issue that has lagged the commercial sector.

That trend has seen a recent reversal. With the focus on cutting contracts, saving money is now a requirement. The Office of Management and Budget recently sent out a memo directing agencies to further tighten their belts, especially given the “TravelGate” scandal from the General Services Administration.  

Cuts are also hurting industry, as salaries, benefits, and jobs are being shed to withstand the environment of lower margins, and lower rates on bids.

…Agencies typically wait until contracts are up for renewal or entering another option year to negotiate with vendors for a better deal. But Hancher's reduced budget drove her to bargain with the agency's help desk support contractor, Computer Sciences Corp., in the middle of an option year…

Different negotiating tactics are being employed, but it is the low-price model that has really taken a solid grip on how the government now buys.

…Donna James, owner of Accent Global System Architects, which helps agencies map their IT network systems, said she started noticing last year that agencies were more focused on price than best value. She lost every bid she competed for based on price.

To be more competitive, her company cut back contributions to employees' health savings accounts and is hiring new staff at lower salaries, she said.

However, most of the contracts she competes for still call for highly skilled workers with special certifications, James said. "They want the sun, moon and stars and they don't want to pay for it."…

The federal government has turned into a buyers market, with procurement executives making difficult requirements without the opportunity for best value. I have seen a marked increase in small businesses getting squeezed to deliver, as the low-price model ensures that margins are squeezed as close to zero as possible just to stay viable. Best value is nothing more than lip service.

Several agencies seem to be getting the message, however, that early and upfront collaboration with industry is vital to understanding what is available, but also, what is affordable.

…At the Veterans Affairs Department, acquisition and IT executives meet with vendors early on about expectations and pricing, so there are no surprises on either side, said Luwanda Jones, VA's executive director of IT acquisition strategy and business relationships…

Nonetheless, we’ll see how the end of fiscal year buying season turns out; the period between July and September that I refer to as the “Feeding Frenzy.”

Will agencies continue to spend like drunken sailors in this period, or will senior leaders demand cuts and finding ways to not spend end-of-year money?

Stay tuned to see if this paradigm shift actually occurs… 

Contractors Are Mission Critical, Not a Necessary Evil

Former head of the Coalition for Government Procurement Larry Allen, now President of Allen Federal Business Partners, wrote a spot on article recently calling out the absurdity of the current environment of anti-contractor sentiment running rampant throughout the federal government.

Recent examples of these activities, among many, includes the Office of Management and Budget’s recent directive to ramp suspension and debarment operations, and the Air Force’s actual debarment of Iron Bow Technologies. Although this debarment was later overturned, it seems that this action was a direct result of the “get tough” policies.

Of note was the actual reversal, as a direct result of the Air Force and Iron Bow working together to address the issues leading up the debarment, and mitigation strategies to prevent any future occurrences. In other words, actions that should have occurred without the need of the seemingly knee-jerk debarment by the Air Force.

Further exacerbating the “greedy contractor” paradigm, and as noted by Allen, is Shay Assad, the director of pricing for the Department of Defense, announcing a more stringent pricing policy with contractors, in addition to the directions to cut service contracts by another 20 percent. Now with the Senate passing a Defense Authorization Bill that caps executive pay for contractors at $400,000, it seems that senior federal officials feel the need to squeeze the vice even further.

With the government continuing to freeze pay and hiring in critical areas, in addition to offering early buyouts, the expected outcome can only be further erosion of performance. With fewer government personnel, in addition fewer qualified and trained personnel since training is also getting cut, waste, fraud, and abuse will keep the Government Accountability Office (GAO) and Inspector Generals gainfully employed. On second thought, GAO is also cutting staff. Perhaps the Commission of Wartime Contracting will reopen its doors in the near future to report on billions in waste, and just drop the Wartime from its title.

Contractors perform vital functions, and more pressure will be put on industry to perform more with less. However, it is being done in an environment where profit margins are being cut to the bone, lowest cost is now the only variable, and many small businesses are in danger of extinction with cuts to contracts, and subcontracts.

The fact is this: Contractors perform messy services that no one else wants to do. They fix things that break in the middle of the night. They are absolutely essential to the efficient running of the enterprise. They should be treated with the respect commensurate with the role they play. Mistakes happen, and bad actors exist. But it’s past time to give credit where it is due.

We would be better served working together, and stopping this animosity.

Are One-on-Ones Necessary for Market Research?

As the government looks for way to save money and improve performance, the topic of adopting best practices for IT acquisitions continues to be at the forefront of the conversation. However, implementing those best practices continue to be challenging, especially in the thought process when comes to one-on-one sessions.

When it comes to market research, the government continues to struggle to open the door to industry, thus robbing itself of improvements on the overall acquisition process. Specifically, requirements continue to be developed in a vacuum, exacerbated by poorly defined stakeholders analysis and moving forward without understanding needs.

In the commercial sector, the closer firms get to signing a contract, the more collaboration occurs. However, the opposite is true in the federal sector. Incoming contractors should be given all the information that is not proprietary to the incumbent to be successful, including budgets and prices currently paid for incumbent services.

However, some government procurement officials disagree. According to these officials, it is up to industry to respond fully and openly with responses to an RFI and during an Industry Day. Further, it is simply a matter of time versus value, as industry will simply use the opportunity in a one-on-one to strengthen their position during capture management by trying to slant government requirements in their direction.

The more government communicates with industry, the more likely the government will get quality services at realistic prices. Although it has almost become standard practice for government buyers to hold an Industry Day, it is assumed that no further communications with industry are necessary. Further, many buying offices simply will not conduct one-on-one meetings with vendors because of incorrectly assuming that favoritism and ethical issues are land mines that should be avoided at all costs.

Questions for industry and government:

1. How do we work together to change these perceptions? 
2. Are one-on-ones worth the time and effort, from both perspectives? 
3. What other tools are available to increase collaboration?

Industry and Government Relations Continue To Be A Challenge

Recently at the National Contract Management Association’s World Congress in Denver, the clouds and storms that rolled into the mile-high city were harbingers of things to come for the week as the relationship between government and industry seems to continue a downward trend at a time when it needs to improve. However, it is the current adversarial atmosphere that was on full display at the conference and illustrated the difficulties that lay ahead in improving and creating an environment of productive communications.

The conference kicked off with an address by Linda Hudson, CEO for BAE Systems, who explained the difficulties that businesses currently face, and the troubles that are on the horizon. A panel session proceeded immediately following the speech, aptly entitled “Show Me the Money—Corporate Survival in Tough Economic Times.”

It is simply a matter a fact that budgets will shrink or remain flat for the foreseeable future, and businesses must adjust to this reality. However, another reality is the ever increasing pile of regulations, oversight, and scrutiny that contractors must continue to deal with. From new ethics regulations, numerous reporting requirements, and ever increasing mandates on security, contractors must comply with this new environment and the subsequent increases in costs of doing business. There simply is no choice, either comply or fold. It is this compliance with current, and what can only be more and more future regulations and increasing oversight, that creates the choices for industry in how they can try to remain competitive. These choices will result in increasing layoffs, scaling back of benefits, decreasing small business subcontracting opportunities, and a restructuring of the industrial base to remain viable and profitable.

Further exacerbating the issue is the continued focus on risk-transference to industry through more and more focus on fixed price contracts, regardless of requirements. Because requirements continue to be poorly or inadequately defined, the result is increased costs to both industry and government in time and money to adhere to a construct that should have never been developed in the first place. This leads to industry having to continue readjusting their pricing strategies to remain competitive through lower and lower priced bids, to the point where margins are razor thin and profitability suffers even more.

I was disappointed at remarks made by Dr. Steve Kelman on his FCW blog, as he seemed to ignore the fact that industry is facing the most difficult period in some time, and will continue to suffer. Barely mentioned is the vulnerability of small businesses, who will face fewer opportunities and even more risk through insourcing. This issue was barely addressed by both the panel and Dr. Kelman, a significant deficiency that I addressed to the panel via a question, but it did not get answered. It is comments like Dr. Kelman’s and the environment he describes that illustrates the work ahead.

The real factor to working in this environment productively is through increased and transparent communications between government and industry, and an understanding that both sides actually do have the same objective. That is, completing a mission on time, and within budget. However, that reality and the current environment for industry seem to be lost on government, and the tone at the NCMA conference exacerbated the “us versus them” attitude. Both sides need to understand the mission from each side’s perspective, and understand the impacts actions have on completing that mission. This is of vital interest to effective government management, and deteriorating relationships will make getting the job done that much more difficult for all parties in the challenging times that lay ahead.