Dec 31 2009

21st-Century Procurement

Consolidation not only makes sense for the government's technology tools, but it also could improve the acquisition processes used to buy them.

The federal acquisition process is hurting. Some people predict that it’s liable to get worse. All three presidential candidates suggest that they intend to take it on should they ascend to the White House.

The buying process has pervasive, underlying issues that drive performance aberrations and add significant cost and difficulty for both the public and contracting community. It’s time to give this line of business the priority and resources it needs to meet the competitive demands of the 21st century.

A fundamental and holistic way to meet these challenges is to establish an organization that is accountable for the acquisition workforce, business processes and policy implementation. Why not create an acquisition center of excellence (ACE) and make it the premier showcase for federal procurement? Why not really change things and build an organization that will become a leader in acquisition for the biggest buyer of goods and serv­ices in the world?

Take Time to Do It Right

How do you bring about this change without chaos?

Over a period of time and in well-planned phases, the acquisition employees of Agency X (and Y and Z, at planned subsequent times) would become ACE staff members paid by the center. But they would remain in their location in Agency X; their responsibilities to Agency X would remain the same for an agreed-upon period of time (embedded in a service-level agreement between the agency and the center); they would continue to provide contracting and reporting services to Agency X management; and the terms and conditions of the agency’s governmentwide acquisition contracts, multiple-award contracts and other contracts remain Agency X product and service vehicles for their lifecycle. In industry, this practice — sometimes referred to as re-badging — is not unusual for mergers.

This move to ACE would be a merger not a reorganization. If you want to take the energy out of federal programs, just announce reorganization, and turf battles reign supreme. Unlike reorganization, moving the oversight of acquisitions to a central organization would free agencies to focus on their core missions while maintaining relationships with their contracting community — just down the hall. No job functions would change, but the dynamics might. And there’s an ethical benefit: By adding a layer of independence for the contracting officer, it would help alleviate untoward pressure of any kind within Agency X.

Service-level agreements would be important for ensuring that relationships and performance are sustained and improve over time. Performance standards, metrics and evaluation would become a shared responsibility; Agency X and ACE would both provide input. The weighting of the evaluation may shift more toward ACE over time but never to the point of excluding the customer agency. The center would be accountable for the management and policies executed by the acquisition workforce — period.

fact: $70 billion: What the government spends annually on IT — roughly 17% of total federal acquisitions ($400 billion)

Risk Factors

Are there risks that could curtail success by consolidating acquisition management? You bet.

An initial hurdle is cultural. Agency chiefs would need to communicate the changes and ease concerns — just as they must when consolidating IT itself.

This isn’t an approach that can be done halfway; a partial implementation would increase the risk of sliding back into the procurement collage that exists now.

Finally, there would be resource and timing challenges to manage. Congressional cooperation and support would be necessary to gain approval for ACE and for the changes in the acquisition chain of command. And although the center would not be a budget breaker at first because the agencies would be paying for a chief component (the workforce), at some point the central organization would likely need its own appropriated budget to avoid any potential conflict of interest.

Benefits to Follow

The potential upsides to centralized acquisition are many.

First, it would be a launching pad to quickly build an esprit de corps of acquisition professionals governmentwide. ACE would create a mechanism for training, paying and incentivizing the federal acquisition workforce for doing one of the toughest and most demanding jobs in the government. An organization established as a center of excellence has the visibility, and thus the impetus, to ensure consistent and effective results. The new accountability and transparency also would drive ACE toward performance excellence, higher customer satisfaction and eventually better communication with industry.

Building and expanding ACE as a premier center of acquisition excellence would facilitate the Office of Management and Budget’s ability to develop and leverage policy initiatives more efficiently and effectively across agencies.

A consolidated acquisition workforce also would be able to better take advantage of technology, which in turn would make it easier for the government to attract and hire high-caliber acquisition workers.

And far from last, a well-trained, high-spirited acquisition workforce — geographically dispersed but under a single organization — could in times of emergency provide a steady, consistent and speedy response to contracting needs and continuity requirements.

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