Protests Will Continue the Upward Trend in 2011

As 2010 is now officially in the books, one issue that we can expect to continue its trend in 2011 is contract protests. An interesting piece in the November-December 2010 Defense AT&L magazine discussed this issue, and illustrates the realities of the federal contracting environment. Mainly, budgets are tightening, competition for those shrinking dollars is ferocious, and protests have become standard operating practice.

A general impression of respondents was that protests have become more common; with nearly 70 percent saying pro- tests were either somewhat, or much more common. A striking result was that none of the respondents felt protests had become less common. That agrees with a recent Government Accountability Office (GAO) report that in fiscal year 2009, 1,989 protests were filed, a 20 percent increase over the 1,652 protests filed in fiscal year 2008, and up 50 percent over fiscal year 2006.

This article is telling in many ways, but what really is of interest are the responses, and their subsequent rankings. Ranked most important is that the protesting company expects to win, followed by the government making mistakes. This certainly seems to make sense, and is also consistent with what I have experienced. In talking to small business executives, it seems that protests are a valid way to verify if source selection procedures were followed. We have seen that go awry in the Air Force KC-X tanker program, where government officials were publically called out for not following their own procedures.

Also of interest is that the order of why protests are lodged in the first place does not seem to make sense, or is not what is experienced in reality. Respondents overwhelmingly stated they expect to win the protest, but the second reason is the critical to the analysis. Some executives I have spoken to tell me that protests are now becoming more operational policy, especially for large dollar contracts. Under the current environment, why not?

The current environment encompasses the second part of the article, where the real views of protests are on display. Predictably, shrinking opportunities and increased competition are major factors at stake, not to mention governmental factors of poorly trained acquisition workforce and poor government communications. So what to do?

I have discussed the need to rethink the protest process and why they occur here and here. As I received some pretty interesting feedback, mostly negative from industry, let me reiterate that protests are a legal and necessary tool to ensure fair competition and correct procedures for awarding contracts. However, this Defense AT&L article highlights why I think protests need to be rethought in regards to acquisition reform.

What I have an issue with is the seemingly endless cycle of protests with no consequences or accountability, both by government and industry. Industry can delay award of a contract, expect quid pro quo, or simply attempt to dig up dirt where none exists. I have been on both ends of this equation, and these strategies only help waste time and money for everybody, not to mention the user pays the price in continued loss of capability (again, look at the KC-X program). Industry looks at in terms of return on an investment, since the risk adverse nature of government may provide additional revenue sources of further opportunities to compete. Nonetheless, the government does make mistakes and should be held accountable.

The end result is that there needs to be a measure of accountability on both sides. A protest should not be taken lightly, as it is normally a disruptive and costly matter. The survey confirms that a company filing a protest expects to win, but reality states that sometimes that is not the case. Firms sometimes file protests to see what happens. I have seen this too many times to count. What if a firm losses, especially repeatedly? A measure of financially accountability to recoup costs for firms that take this approach is needed. Being accountable for phising expeditions should help the protests process be used for what it is intended: ensuring fair competition.

The government seems to also be in the habit of not wanting to deal with a protesting firm, as some government agencies award work to companies with reputations for protesting contract awards to avoid the cost of resolving disputes with those companies if the government losses and the cost of resulting project delays.

Leadership and accountability is needed to help stem this trend. Protesting is a right that industry must continue to have, but it needs to be measured and weighed against the “real” costs should accountability finally be placed into the equation. Further, government must stem the tide of allowing themselves to be bullied, but more importantly, be held accountable for following procedures, and executing sound acquisition strategies to ensure a protest is not even in the conversation.

We shall see what reform lay ahead, but we can only expect to see a continued rise in protest actions on the horizon, to the detriment of all involved.

Reverse Auctions: A Tool to Realize Real Cost Savings

As Government continues to leverage its buying power through continued fiscal pressures, one process that is not getting enough attention is the use of reverse auctions. Reverse auctions are an effective and efficient means of realizing large savings on purchases of not only commodities, but highly defined services as well. Although current initiatives exist such as the General Service Administration’s (GSA) Federal Strategic Sourcing Initiative (FSSI), which encourages adoption of industry best practices, federal buyers are simply not going far enough in leveraging their buying power to maximize price savings. To achieve maximum efficiency, the Government should begin to create holistic strategic souring initiatives that include reverse auctions as a mechanism for cost savings, since programs such as FSSI are simply catalog buys to bidders that have been pre-qualified, and mimic the GSA Schedules program. Further, many Program Managers and other acquisition officials I have spoken to state that they do not always get the best prices by using these types of pre-negotiated arrangements, and thus buy either directly from vendors or execute procurements outside these initiatives. The result is ineffective buying and the continuation of not maximizing efficiencies to the detriment of the taxpayer.

Reverse auctions are by definition a structured competitive bidding event where competition can be maximized to help drive the price lower over the course of the event. One common reason I have heard for the poor adoption rate is technology barriers, which is a frankly a disingenuous reason. The benefits of potentially significant cost savings, enhanced transparency, increased collaboration, increased competition all outweigh any barriers that seem to be artificially created by Federal organizations. If the Office of Management and Budget (OMB) and the Obama Administration are serious about Open Government and accountability, then enhanced adoption of reverse auction should be further explored.

Another stumbling block to adoption is the issue of transparency, as the risk adverse nature of Government creates issues that should not exist through fear of protest that seems to be paralyzing acquisition decision-making. The reverse auction process is Acquisition 2.0 in motion, as reverse auctions create a structured and automated negotiation process with transparency at its core, since the process depends on vendors creating a clear and documented process for creating the pricing structure and the subsequent contracted price. It is the openness of the process that should be embraced, since the reverse auction allows for real time pricing feedback, and also allows acquisition officials to have real time visibility into the negotiation. This type of structure and the transparent process creates and enhances competition, reduces complexity, enhances collaboration, and ensures compliance with the acquisition policies and regulations.

It is these types of procurement methods that should be embraced, and will need to be further explored to help create holistic strategic sourcing initiatives for realizing true cost-savings by adjusting processes, ensuring leadership drives change, and breaking the endemic status-quo culture of Government. Successful examples of reverse auctions already exist through both Defense and civilian agency use, so lessons learned are available for use and need to be expanded upon to help with widespread adoption. As OMB continues to issue guidance on improving federal acquisitions and government management in general, reverse auctions need to be part of this process of continuous improvement and increasing accountability to the taxpayer.

Acquisition Reforms Will Focus on Oversight

As the lame duck session of the 111^th Congress comes to a close, some in the acquisition community are left to wonder what lays ahead for the acquisition reform initiatives of the Obama Administration. According to many experts, the shift in political power may not make much difference for the IT and procurement communities.

I am not sure that is the case, according to plans that Rep. Darrell Issa (R-Calif.) has stated as incoming chairman of the House Oversight and Government Reform Committee. Issa has said that the Telework Enhancement Act (H.R. 1722) lacks many of the safeguards necessary to prevent fraud, waste, and abuse. Specifically, Issa claimed employees can take advantage of the lack of direct manager oversight, does not require agencies to prove how much money they’re saving, and does not create jobs.

Although Rep. Issa continues to draft his agenda for the new Congress, I am not going to hold my breath that this process will not be politicized, when Rep. Issa makes statements such as “I want seven hearings a week, times 40 weeks.” Rep. Issa also stated he looks forward to working with the Office of Management and Budget (OMB) and industry on ways to address wasteful spending from failed government IT programs. I think OMB is really making some important strides on this front, so we’ll either see either a real oversight agenda moving forward or more political witch-hunts as in the past.

On the Senate side, Sen. Claire McCaskill (D-Mo.) remains chairwoman of the Homeland Security and Governmental Affairs Committee’s Contracting Oversight Subcommittee. Sen. McCaskill will continue her focus on interagency contracts and reforms to the 8(a) set aside programs for Alaska Native Corporations. I hope these initiatives continue, as Sen. McCaskill has much unfinished work to do regarding abuses in these programs, so I hope that Rep. Issa seizes the opportunity to really craft bipartisan and meaningful relationships with other members on ferreting out waste, fraud, and abuse.

Another important issue is the effect of the midterm elections on open government, transparency, accountability, and the overall Gov 2.0 movement. I believe that significant movement will come on this issue, as politicians move from political use of Web 2.0 for campaigns, to executing Gov 2.0 initiatives to execute transparency initiatives and hold government accountable. Again, I hope that this renewed focus on using Gov 2.0 tools to advance Open Government and allow for more citizen engagement. However, it is hard to fathom considering this hyper partisan political environment where Congress scores so low in providing these services themselves.

I would like to see the latter happen. But I have reason to lack hope. Tim Evans, a program analyst who works on Web analytics and customer service measurement at the Social Security Administration, posted a story by Larry Freed of The Digital Citizen about a recent survey in which ForeSee Results found “a clear and proven relationship between transparency, satisfaction and trust,” and “higher transparency leads to higher citizen satisfaction with government, which in turn leads to higher trust.”

Unfortunately, “when it comes to transparency, citizen satisfaction, trust, accountability, perceived goodwill, competence and integrity, American citizens give Congress the worst scores across the board,” Freed wrote.

Not the most encouraging situation, but let’s give Rep. Issa the benefit of the doubt that he will wield his gavel responsibility to protect the taxpayers and not a political party and its agenda. Change we can believe in? We have heard that before.

Fixing IT Acquisition is About Execution, not Just Personnel

According to recent reporting by Federal Times on the state of federal information technology (IT) acquisition and program management, the Government is ill prepared to purchase and manage large scale IT programs due to poorly trained staff, and poor collaboration with industry. Certainly contributing factors, but the issues are much more broad and troubling.

Two independent industry trade groups, the TechAmerica Foundation and the American Council for Technology-Industry Advisory Council (ACT-IAC), have released reports on ways to improve the troubling state of federal IT programs. The industry groups' reports were done in advance of the expected Office of Management and Budget (OMB) release this month of the Administration’s plan for reforming IT procurement. Taken together, these two trade group reports provide a valuable roadmap to help improve the abysmal situation, and I hope OMB takes note.

What is important about these reports is that the recommendations have the ability to be implemented relatively quickly, and could have impacts in the short-term. As the reports also note, the laws, policies and procedures already on the books provide plenty of resources and flexibility for implementing the action items. Nonetheless, an important and valuable addition to these reports is the discussion of obstacles and challenges to implementation, along with subsequent action items for overcoming these issues. Many reports, including the recent memo from Dr. Ashton Carter on needed improvements to defense procurement, simply state what is needed without a roadmap on how to get there.

The report focuses on several areas including:

1) Professionalizing Program Management. Due to the constant rotation of program managers (PM), the reports called on a knowledgeable and empowered program manager who sees the project through to completion. The TechAmerica report also called on the establishment of a Program Management Leadership Academy, and enhancing training overall for PMs.

This recommendation focuses on building a bench of qualified PMs that have the tools and resources to be successful. Often, PMs are set up for failure by being assigned programs they simply have no business running. Managing IT programs can be a blood sport, and PMs need to be empowered, fully supported by management, and trained in best practice tools, techniques, and methodologies for managing IT programs along industry standards. Training is vital, but it also needs to focus on requirements, IT, finance, and contracting/acquisition. The cross-functional knowledge is required to ensure holistic program objectives are understood and achieved.

2) Promote Agile/Incremental Development. The TechAmerica report specifically states that agile development is not a cure-all for IT acquisition.

…The iterative, incremental and collaborative processes of agile development will significantly raise the Government’s return on its IT investment. It will do this by engaging with users more effectively, deploying capability more quickly and keeping better pace with rapid advancements in such technologies as cloud computing and software as a service…

The Government simply cannot expect to perform its mission with continued programs that are constantly behind schedule, over budget, and deliver little in terms of results or performance after spending millions in taxpayer funds. It is imperative to deliver smaller increments of capability, focusing scope on what is realistically achievable by closely collaborating between developers and users.

…Chief among the benefits of agile/incremental development are increasing the return on taxpayer investment through faster deployment of capability and reducing rework through faster and more effective interaction with users…

ACT-IAC called for a renewed focus on Governance, which would be used for accountability at the senior leadership level and promote the desperately needed communication that can lead to program success through agile development.

It is these best practices that can have significant impacts in the short-term. Advances in technology develop at a much faster rate than the federal acquisition lifecycle can keep up with, creating a capability gap that prevents Government from leveraging innovation and creates a system where Government purchases technologies that are outdated prematurely.

3) Improve Risk Management. The important recommendation is the call for an Independent Risk Review on major IT acquisitions. The report recommends a third party completely independent of the program, such that role is not filled by the program or the contractor executing the program. In essence, the report is calling for an Independent Validation and Verification (IV&V) role, either internal to Government or an outside contractor. This renewed focus on adherence to performance and Governance would go a long way to help ensure proper review cycles where all interested parties are held accountable for success.

4) Enhance Stakeholder Engagement. According to the TechAmerica report:

…The need for better engagement, collaboration and communication between Government and industry was cited by 78% of the Government-experienced IT leaders we interviewed, more than any other topic…

Also like the reports note, the trend recently is to build barriers to communicate and collaborate, effectively taking the Government in the wrong direction. The Federal Acquisition Regulation (FAR) encourages the communication, so why is it not happening? Risk aversion namely. Externally, the Government can use Gov 2.0 platforms for crowd sourcing, such as the Better Buy Project, to solicit user input and allow for outside sources to contribute to openness and transparency in the procurement process. Internally, ensuring end-users have a place at the table in requirements and the development of the program is important to ensuring the end system can meet objectives. The reports also tie the use of agile development as one way of doing this.

…Better communication can improve both the quality of an acquisition document and the quality of the proposed responses. The result will be a smoother acquisition at a lower cost. Better communication can also lead to greater awareness of how technology is being used innovatively in other marketplaces that could vastly improve mission delivery…

Improved acquisition outcomes are possible when industry knows what the mission and needs are of the Government, getting the opportunity to contribute and demonstrate technological capability through effective market research, combined with the Government knowing what their own needs are as well. This is only possible through open communications and partnerships with stakeholders, both internal and external.

5) Requirements. The Achilles heel of Government, the requirements process is one of the fundamental issues that create failing programs at program inception.

…As noted in the previous sections, a lack of communication and collaboration can lead to the development of patchwork requirements – or requirements that cannot be achieved by existing technologies and solutions. Similarly, overly rigid and defined requirements can preclude the agency from taking advantage of innovative solutions.

The Government does not always have a full understanding of how evolving solutions and technologies could benefit an agency’s goals and objectives, or how such solutions can be acquired by, and provisioned to, the Government. A key contributing factor to this development is the perception that federal officials increase the risk of protest due to “pre-selection” or wiring the requirements when they communicate with industry to consider possible alternative technological solutions or capabilities for meeting Government requirements…

Both reports called for increased collaboration and agile development to help control requirements. However, the entire requirements process needs a paradigm shift to leverage these proposed solutions.

Focusing on outcomes and allowing industry to propose innovative solutions to solve Government’s problems is the path to success. Government simply is not prepared, or has the technological acumen, to know what is in its best interest. Instead, it must focus on what it needs to perform its mission. Allow industry to present truly best value, and then manage to results. It is this renewed focus on the disease on procurement failures that can have a major impact on outcomes, but only when leadership understands that business as usual is not an option.

These proposed recommendations can go a long way to helping improve IT acquisition and management. It starts with an understanding where knowledge is housed, work to our strengths, and create real partnerships between Government and industry to stop the cycle of fraud, waste, and abuse that starts with poor requirements, poor management practices, and the inability to execute.

Executing Requirements Is Not A Zero Sum Game

As government watchdog groups continue to focus on ways to reform the acquisition process and create greater transparency, the issue of requirements seems to be a common denominator for many examples of waste, fraud, and abuse in federal procurement.

Dr. Steve Kelman wrote on his Federal Computer Week blog The Lectern about approaching the issue from the perspective of the acquisition phase. This interesting perspective offers a lot of promise, as the current process is simply not sufficient to find true best value in federal procurements. Now, vendors are made to endure writing contests in response to a government solicitation at great time and expense that don’t necessarily respond to the government’s needs. It becomes about the writing and not the substance. The result is that contractors either do not execute on what they proposed, or the government does not manage the contract effectively by holding contractors accountable, or a combination of both. How do we prevent this from happening?

One approach is the use of oral presentations. Although this technique is gathering more traction in procurements, especially for IT, it should be used with more frequency to evaluate an offeror as a potential business partner. Because of the focus on the written response, many government contractors have proposal development experts or even proposal development organizations within their respective companies that have years of experience responding to federal proposals. The end result is that contractors are great at responding to proposals, but without those responsible for actually doing the work being more involved in writing proposals, the execution will be lacking.

This approach of involving the implementers would go much further in ensuring a proposal is more than just eloquent prose, but an actionable document that becomes part of the contract, and how it will be executed and managed. Many procurement officials are left wondering if vendor program managers even read their own proposals. Government officials who do not hold contractors accountable for the successful outcome of a program exacerbate this process. The result is failure, or the status quo. Supplementing written submissions with oral presentation can help alleviate this problem by ensuring the government can have a face-to-face meeting with a potential contractor, and get a better sense of what they are buying.

For oral presentations to be successful, the government must require that the vendor personnel who will actively manage and execute the program be the ones to conduct the presentation. Otherwise, the government will get business development personnel who are trained, and excel, in selling. The government needs to focus on executing, not marketing.

Further, these oral presentations need to be rated and evaluated as part of the source selection. Increasingly oral presentations are conducted with little effort toward ensuring a program can be successful or that the offeror is a good fit to solve the government’s problem. Oral presentations are an excellent way to cut through the smoke screen of a wonderfully written proposal that either does not fully address the government’s need, is fraught with risk, or simply is marketing disguised as solutions.

Another effective tool that should be used more frequently is the post-award conference which brings together key individuals from both sides, and ensures both accountability and responsibility are at the forefront of contract management and execution. This sets up both parties for success by ensuring that the contractor understands the government’s requirements and that roles and responsibilities are established for all parties. It also ensures the government understands the proposed solution, associated risks, quality control, program management, and issues in administering the contract. Hosting ineffective conferences or simply not conducting them at all on complex acquisitions, and for many other IT programs, is inexcusable. The current process of government and industry program managers shaking hands and going off to the races to waste taxpayer money must come to an end.

Although these techniques are nothing new, they can go a long way to turning around poor acquisition outcomes. Certainly the current requirements development process is broken and needs to have a thorough review to address. However, executing on current federal requirements can see improvements if both industry and government understand that they are not reinventing the wheel. Slight changes in business processes and conducting effective contract management require simply adhering to disciplined implementation.

Improving Federal Acquisitions: Let's Do It Right

Over on Federal Computer Week, Dr. Steve Kelman has written several blog posts on The Lectern in a series of issues related to improving federal acquisitions and communications, specifically information technology projects. Although I have commented on the specific blog posts, I wanted to have a more in depth discussion here.

Improving Federal IT Acquisitions

I felt the wrong questions were being asked.

…Early in the conversation, Dan Gordon, on the panel as the administrator of the federal Office of Federal Procurement Policy, posed an important question in a very interesting way. He asked: "I am guessing that many in industry know when they read an RFP [request for proposals] that the government is putting out to bid a program that is likely to fail. Yet I am also guessing that industry seldom says this to the government. What can we do to change this?"…

Many issues are raised with this line of questioning. First, what benefit would industry have at this stage in the acquisition to be offering advice on an RFP? None really. In fact, I believe that this type of information would put industry at a disadvantage, since the government would never pull an RFP or even consider reshaping requirements since an enormous amount of effort and time have been dedicated at this point. For large IT acquisitions, it sometimes takes years before and RFP gets issued. Although sometimes requirements are so poorly written that cancelling an RFP and starting over really is the best solution, this seldom happens. Programs fail before they even start, and taxpayers get fleeced. This story is all too common in federal procurement.

The real issue here is to get the requirements properly structured so that the program can be successful from the beginning. Using the current Federal Acquisition Regulation (FAR), all the tools already exist in Market Research (FAR Part 10), and Exchanges with Industry Before Receipt of Proposals (FAR 15.201). So why are these techniques seldom used? What can be done to improve this process?

Contracting personnel, in addition to project and program managers, need to understand that the current process is not working. The fear of protest, possibly unethical behavior, or unknowingly giving away proprietary information (i.e. risk aversion) needs to change. If these fears proved to be the case, the FAR would outright prohibit any exchanges with industry in the first place. Government personnel need to understand that programs fail at the beginning, due to poor acquisition planning and poorly defined requirements. Almost any Government Accountability Office report on acquisition failures will undoubtedly have these statements in the Executive Summary. What was the definition of madness again?

One initiative that needs to be expanded and fully embraced is the General Service Administration’s Better Buy Project. This initiative has had successful trial runs using Gov 2.0 techniques (e.g. blogs, Wikis, etc.) to solicit input and feedback on both the federal acquisition process, but also on specific procurements using crowdsourcing methodologies to help improve the communications process between GSA and industry. There is no more equal playing field than using these techniques, since everyone has the opportunity provide input and helping ensure a procurement is successful from the beginning.

The biggest barriers are of course cultural. What is very telling are some of the comments from both sides of the issue on Dr. Kelman’s post, illustrating the great divide and skepticism that exists from increased access and communications:

Government’s Side:

…One major issue is: companies do not necessarily want to hand over their expert critiques to the government for free. Companies often find their top ideas used to fix a bad requirement--that is free consulting. They are giving away their ability to differentiate themselves from other firms that don't see the flaws and/or don't know how to solve them. Secondly, if companies were truly partners with the government, this would not be a problem. However, neither government nor contractors really want to be partners, in fact. If they were, they would accept the consequences together of bad outcomes, and the companies would make no money. No one has ever seen a government contract that reads remotely like a partnership agreement. Partnering is hackneyed, misleading, self-serving, and false in just about all its usages in the government contracting arena…

Given a chance, I believe that industry would gladly help the government resolve issues up front in the requirements development process, again if given the chance. I do not believe it is practical, nor realistic, to think that industry will voluntarily tell the government an RFP is a disaster. Several reasons include the fact that these comments will fall on deaf ears, or worse, adversely affect a company’s image. Further, the notion of best value seems to be elusive, as lowest costs seems to be the primary source of contract awards. Why bother adding value when lowest cost is desired. Perhaps value engineering should be part of every project, and adding the lessons learned to future engagements.

However, it is the partnership that will ultimately lead to program success. The comments left by this reader are unfortunately not uncommon, and somewhat true. Many firms have a vested interest in the status quo, and do not seem eager to change their approach. I also do not see the practically in using industry feedback as some kind of evaluation factor as Dr. Kelman suggests. This approach would undoubtedly lead to self-serving “improvement requests,” which is what best value is supposed to correct for anyway; what is in the best interest of the government (e.g. exceeding requirements and differentiating a proposed solution).

Industry’s Side:

…Both responses to your suggestion are accurate. We, as contractors, don't want to be in the position of suggesting to an agency that their pursuit position is incorrect. We never know who accesses those types of comments nor how they may react to suggestions to improve their position. The second suggestion is more prevalent than many expect. "Cut and paste" RFIs and Sources Sought requests generally include inadequacies, inconsistencies and contradictory pictures of the agency's true environment. These are indications that they technical involvement necessary is absent or lacking and making suggestions as to how to correct these are often not received well. In addition, fear of OCI issues has reached a point where these same contracts people will not even talk with or accept input from industry well in advance of the solicitation release. Until contracting people understand that the government encourages interaction with industry up to the release of a solicitation, these issues will not go away…

I do not believe that technical incompetence is the primary issue. I believe, and have experienced, that technical competence for a program is a function of acquiring that knowledge that normally exists internally. The fragmented way that the government buys is normally the culprit, where programs develop requirements in a vacuum without conducting a thorough stakeholder analysis, soliciting feedback or input for proper requirements development, then kick it over the fence to acquisition and contract shops. At this stage, not knowing the procurement or even the customer in some cases, contracting shops try to getting the procurement of their desk and take shortcuts at the detriment of the program, as the reader suggests. Using boilerplate information, templates, and checklists are a great way to streamline an acquisition. There is certainly nothing wrong with this approach, as I certainly use these tools with federal clients. However, tailoring the information carefully is vital, and sometimes this quality control is lacking in federal procurements.

The Organization Conflict of Interest (OCI) issue is another barrier to increased communications from industry. Many firms fear that being proactive in helping shape requirements will OCI-themselves out of competition for a particular procurement. This is a major issue that needs more thoughtful analysis, as the point of crowdsourcing is to solicit information from all parties equally, and allow for even greater opportunities for competition with requirements that are not overly restrictive and well understood by industry. Firms should not be penalized, nor should they have fear of being penalized. The government is doing itself a disservice by not properly proving these protections.

Overall, the closed-door mentality to communications is doing the opposite of what the latest acquisition reforms are trying to accomplish. I hope the Office of Management and Budget provides further guidance on this issue, and give industry a greater say in helping the government execute its acquisition reforms. All parties would benefit, especially the taxpayer in the end.

Your Taxpayer Dollar$ at Work: Volume I – Follow Up

I recently started a new piece here on the The Acquisition Corner, as a result of the complete fiscal mismanagement of the U.S. Postal Service (USPS).

The Federal Times reported this week that the issues with the USPS are not only severe, but at the point that radical change is necessary if the USPS is to survive:

…Postmaster General John Potter warned Friday that the U.S. Postal Service could go broke by next September.

"If things go as expected, we will perhaps be able to get through the year and literally run out of cash in September of 2011 because we will have exhausted all of our borrowing authority," he said at a news conference.

He said losses in the fiscal year ending yesterday widened to about $6 billion…

It gets worse:

…This has been a devastating week for the Postal Service. Besides ending the year with a $6 billion loss, the agency's bid to raise stamp rates was rejected by the Postal Regulatory Commission on Thursday. The proposed rate hike would have increased first-class stamps from 44 cents to 46 cents starting in January.

Potter said the agency is studying its options in the wake of that decision. Among those options: Appeal the decision to a federal court; refile the rate request; or seek to raise rates by an amount tied to the inflation rate. That last step would not require the PRC's approval, although the commission would have to verify that the increase is no higher than a cap linked to the Consumer Price Index. According to the latest available numbers, that formula would permit an average rate increase of about 1.5 percent, a PRC spokesman said today…

What about consolidating operations, cutting costs, and other tools to improve performance to help the fiscal crisis facing the USPS? Perhaps it was not reported, but I have not seen much effort coming from USPS management on these issues other than possibly cutting Saturday delivery. The forever stamps may be an option as I commented, but hopefully they will still have utility.