Federal Acquisition Executives Grapple with Retirement Wave

As the government’s largest buyer, the Defense Department is building up expertise in its acquisition workforce, perhaps with greater success than some other agencies in this era of contract austerity. The exception likely comes at the most senior executive level.

So said Shay Assad, director of defense pricing, defense procurement and acquisition policy, on Wednesday speaking before an Arlington, Va., audience of contractors in the Coalition for Government Procurement. His own section of the Pentagon, despite the pay freeze and likely furloughs, he said, “has done remarkably well” in retaining talent, with employees who’ve moved on “only in the single digits, mostly because either they decided we weren’t right for them or they weren’t right for us.”

With mortgages and kids in college to pay for, “most could do a little better on the outside,” Assad said, “but our ace card is that what we do really does impact the warfighting force.” The tendency of many in his acquisition workforce of 160,000 to stay on during the past decade of wartime may be changing, however. “My biggest concern is the senior ranks,” he said, “where some may be doing the math and asking themselves, ‘Why am I doing this?’ ” In response, Assad’s staff is “staying engaged with senior leaders and mentoring the next wave.”

Beginning in 2009, under Defense Secretary Robert Gates, the Pentagon set out to grow the acquisition workforce -- which had been depleted in the 1990s -- by 12 percent to 15 percent, or 3,800 hires, which it accomplished, Assad said. “We’ve brought in talent at a ratio of 64-34,” meaning young, trainable members of his 27,000 team of contract officers outnumber the experienced ones, he said, but they’re being trained through efficient, Internet-based courses at the Defense Acquisition University with a “much stronger foundation in regulation than some of their superiors have,” he added. “It’s probably the best thing we’ve done in training.”

Governmentwide, only about one-third of the acquisition workforce is experienced, as defined by having four-to-20 years on the job, said Joe Jordan, administrator of the Office of Federal Procurement Policy. Another third are soon to retire, he said.

Jordan spoke of the interagency push for greater use of strategic sourcing, for sharing comparative data on purchasing prices among agencies and for cultivating good relationships with vendors, particularly among small and disadvantaged businesses.

In the Navy Department, there’s more of a challenge in “making sure we have the right workforce” running a global, decentralized contracting system of 700,000 uniformed and civilian employees, said Elliott Branch, deputy assistant secretary. In his immediate office over the past year, he watched half a dozen employees, with “225 years of experience [collectively] walk out the door.” In today’s environment, many senior managers “feel that a bad day at the beach is better than a good day on the Metro.”

There is solid acquisition experience at his top four commands, Branch said, either “seasoned or on the way so that the team can come together and talk the language to leverage buying power.” But in his field office, often “only the contracting officer is a true professional.” As the Navy responds operationally to the new austerity, he said, it will “make greater use of this crisis by having a one in a generation conversation about what Americans are.”

At the Homeland Security Department, 30 percent of the workforce will soon retire, said Mike Smith, director of the Strategic Sourcing Program Office, so “quality in people” is among the department’s top priorities, with an emphasis on “skills refreshing, more mentoring and hands-on training to get junior employees up to speed.”

At the Veterans Affairs Department, “we are hiring,” said Iris Cooper, executive director of VA’s Office of Acquisition Operation, adding that making acquisition more strategic “is difficult because we’re extremely stovepiped.” She said “it is scary that some in the junior workforce get promoted too quickly, after five years, but it takes five to seven years” to be fully functional. “We’ve turned them into catalog shoppers, with little thought, and we’re trying to change that,” she said.

Many company representatives in the audience came to hear the latest on governmentwide acquisition strategies. Tom Sharpe, the Federal Acquisition Service Commissioner at the General Services Administration, put in a plug for his agency’s effort to “grow our market share” from the current 13.5 percent of federal procurements, worth about $55 billion annually in goods and services. GSA’s priorities, he said include engaging small business, sustainability, strengthening GSA and “delivering savings to federal customers faster.”

GSA is working with the Defense Department, Assad said, at better criteria for determining when fixed-price contracts can work in purchasing services, for which requirements are difficult to measure.

“We’re not interested in dialing down profits,” he told the contractors, but being clearer about what the government wants. Future requests for proposals, he announced will begin identifying the top five or seven most important requirements, “spelling out in more detail how you can discriminate yourself from your competitors.”

A mandatory Pentagon report on profitability is due in July, Assad said. The department’s Better Buying Power initiative means “we need more products and services for the money we have.” But it need not mean companies make less money, he added. “It’s the difference between companies providing quality service along with cost reduction,” he said. “I tell contracting officers we need thing on time and ever-improving. If I were on the other side of the street [in the private sector], I’d want to be rewarded for that.”

Within the Defense Contract Management Agency, Assad said, several new tools should help the acquisition workforce address contractors more efficiently. One is a centralized pricing capability -- called the Contract Business Analysis Repository and built by 400 engineers and cost analysts -- that will allow contracting officers to instantly check a company’s history and rate structure, a task that used to take months. DCMA will also set up, by this summer, an online tool so that contracting officers can quickly see what products cost in the commercial marketplace.

Assad also promised to examine how “thoughtfully and deliberately” the Pentagon is spending money on contracts in the rushed fourth quarter of the fiscal year. “You’re likely to get a change,” he said.

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