What's Next?

January 1995

PROCUREMENT REFORM GUIDE

What's Next?

Now that procurement-reform legislation has been passed, agencies are turning their attention to implementation.

After spending months working with dozens of other Hill staffers on the Federal Acquisition Streamlining Act, Ellen Brown, procurement counsel for the House Government Operations Committee, summed up her experience: "We have given birth to the baby, and now the Administration has the even more difficult job of raising it."

Steven Kelman, administrator of the Office of Federal Procurement Policy (OFPP), which has the lead role in implementing the law, is calling for a grass-roots effort in which federal workers experiment with innovative procurement techniques.

Kelman has offered to visit some of the 2,500 federal buying offices to talk about the new law in exchange for feedback and promises from procurement managers that they will initiate projects.

"Legislation is only one piece of the puzzle," says Kelman, who has moved OFPP beyond its traditional regulatory and oversight role and turned it into a cheerleader for change. "Program managers and contracting officials must develop specific action plans for improving the procurement system even more."

Some provisions of the Federal Acquisition Streamlining Act, such as those concerning credit-card purchases, took effect immediately after the law was signed last fall. Others require regulations, which are being written by 12 interagency teams of acquisition officials. Draft proposals are expected this month.

To save time, OMB will review the draft regulations concurrently with agencies. Breaking with tradition, the Federal Acquisition Regulation (FAR) Council will not evaluate the proposed rules until they are in final form.

"By reengineering the cumbersome rule-writing procedures, we hope to issue final regulations by April-six months ahead of the legislative deadline," says Kelman. Once approved, the regulations will go into The Federal Register as new entries in the 1,600-page FAR, which is the foundation of all federal procurement.

Culture Shock

Then the really hard part begins. The new law, which gives front-line workers broader discretion and more responsibility for daily operations, will require a major culture change at agencies.

"The shift from a bureaucratic way of thinking-which has served us well in the past-to resolving issues at a lower level is a major change and must be taught," says Cynthia Rand, principal director for information management at the Defense Department.

Cultural change may not come easily in the federal acquisition workforce, where the threat of having a career ruined or even being subject to criminal prosecution if any improprieties are discovered has engendered what many consider to be an overly cautious approach. "It's so rare to have a contracting officer with the chutzpah to take risks," says Roger Cooper, deputy assistant attorney general for information resources management. "In most agencies, contracting officers succeed by not making mistakes, while service to the public is irrelevant."

David Borland, director of the Army's Information Systems Selection and Acquisition Agency, believes agencies should be more supportive of procurement personnel. "We have a system in which contracting officers face high risks with no particular payoff to behave outside the culture of fear," he says. "It's crucial to stand behind people so that if they make mistakes, they know that we will throw the weight of our organizations behind them."

Colleen Preston, deputy undersecretary of Defense for acquisition reform, agrees. "We have to get a system where we manage risk rather than avoid it," she says.

One area in which rules, and the fears they engender, have arguably been particularly counterproductive is government/industry communications, an area Kelman says is ripe for change. Although the new procurement-reform law touches on agency/vendor communications, no specific provisions address problems created by the Office of Procurement Policy Act Amendments of 1988.

That procurement-integrity law discourages informal exchanges between agency representatives and vendors during procurements, and suggests that communications be conducted in writing. Such communications restrictions are problematic on complicated systems-integration contracts, which-unlike straight commodity buys-could have a variety of approaches.

Contractors believe they should be allowed to have in-depth discussions with government officials about what products and services are needed. Informal communications also would allow companies to fully explain the solutions they are proposing to the agencies. This would prevent the kind of misunderstandings that lead to protests.

Less restrictive communications rules also could attract new companies to bid on federal contracts, which should bring prices down and give the government more solutions from which to choose.

"Practices designed to prevent collusion between vendors and officials have resulted in people being more worried about protecting bureaucratic backsides than getting the best products for the best price," says Kelman. To encourage companies to invest time in coming up with innovative proposals, he suggests making the quality of comments vendors offer in their bid proposals one of the factors upon which they are formally evaluated.

Joe Thompson, commissioner of the Information Technology Service at the General Services Administration, believes communications between federal agencies and the private sector are too often stifled by overly restrictive interpretations of regulations. "The success of our programs depends on good working relationships with the vendors who supply our products and services," says Thompson.

A new GSA guide for improving government/industry communications (see "Resources" box) suggests innovative ways that agencies and vendors can exchange information without breaking the law.

Enhancing the Workforce

All agree that education is the key to changing the culture of fear at agencies. The National Contract Management Association, a professional group of 20,000 contracting officers and industry representatives, has worked with OFPP to develop monthly training seminars for front-line procurement professionals.

Training will be more important than ever as the federal procurement workforce downsizes in accordance with recommendations made in the National Performance Review. Kelman says government procurement shops will be hit with a "disproportionate number" of cuts in fiscal 1996, but he expects that most of the jobs will be trimmed through attrition.

Some believe that insufficient training over the years has resulted in a federal procurement workforce that is not up to private-sector standards. Kelman says OFPP is considering requiring in-service exams for procurement personnel, as well as other steps to ensure an adequately skilled workforce.

In addition, his office is trying to make training more attractive to the procurement workforce by using technology instead of forcing workers to go off-site to attend classes. "We don't want procurement training to be a stepchild anymore," says Kelman.

Future Reforms

The Federal Acquisition Streamlining Act sets the stage for the rewriting of the Federal Acquisition Regulation and other laws. Last October, Sen. William Cohen, R-Maine, released a 32-page report criticizing the way agencies acquire information technology. He called for halting major federal computer acquisitions until Congress rewrites the Brooks Act-which has governed such purchases since 1965-to put tighter controls on spending.

Cohen plans to introduce legislation to update computer-procurement laws. Such legislation would be designed to complement the Federal Acquisition Streamlining Act, which Cohen says won't have much impact on large-scale computer acquisitions.

"A federal computer buy takes two years, yet the technology changes every 18 months," says Cohen, chairman of the Senate Governmental Affairs Government Management Oversight Subcommittee, which conducted the investigation that led to the report. "We've got to eliminate some of the protests and bureaucratic barriers in order to make the procurement system more efficient."

OFPP's Kelman agrees that protests are a serious impediment to procurement reform because "they discourage innovative approaches." He says that although he believes both government and industry must look for ways to reduce the number of protests, his office hasn't taken a formal position on Cohen's proposal.

"The Administration is hesitant to take on any new procurement-reform legislation for fear of diverting attention from implementation of the Federal Acquisition Streamlining Act," says Kelman. "Instead of spending energy engaging in a fight that will be very bloody, we probably should concentrate on making the new law part of the system."

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