GovernmentExecutive.com

The recent media focus on post-Hurricane Katrina contracting foibles and the indictment of the White House's procurement policy czar comes on the heels of front-page coverage of contracting scandals, real or alleged, involving Iraq, the Transportation Security Administration, and the Air Force. This intense scrutiny of the government's contracting regime is both welcome and long overdue.

Effective public procurement is vital to government success. Government purchasers, whose skills are a core competency, spend more than $300 billion annually, an amount equal to about 40 percent of all federal discretionary spending.

But focusing solely on contracting failures brings a serious downside. Under pressure from Congress, the Bush administration recently assigned a team of inspectors general to scrutinize Katrina-related contracting. That's a responsible gesture. Yet no corresponding call came for more contracting experts to perform the many functions besides auditing that are necessary for the procurement system to work well. Despite good intentions, investigative reporters and elected officials, obsessed with scandal, threaten to create a procurement system that is worse, not better.

As academics who share procurement policy experience inside government, we find that our backgrounds - in public management and law, respectively - often cause us to differ on procurement policy issues. Indeed, sometimes we are quoted in the media as representatives of opposite viewpoints. But we share similar worries about the impact of current political and media attention on procurement.

Surely, transparency, fairness, integrity and competition are bedrock values in our procurement system. And the government's fiduciary responsibility demands prudent protections against contractor cheating and malfeasance.

But political and media attention focuses almost exclusively on poorly conceived contractual arrangements, isolated examples of contracts awarded to "cronies," and contractor misdeeds. These risks, while unequivocally present, are exaggerated.

Contracting professionals remain puzzled and angry that the same media that initially criticized the government's slow response to Katrina now criticizes agencies for acting too quickly. More important, an obsession with the police function of minimizing fraud and abuse distracts contracting officers' attention from the fundamental task of getting a good deal for the government and achieving the best possible contractor performance.

Effective procurement officials develop innovative ways to get the most out of contractors. For example, when the l994 Los Angeles earthquake closed a major freeway, the reconstruction contract was structured so firms not only bid on price, but also on target completion dates and a proposed schedule of rewards and penalties tied to those dates. As a result of this innovative contracting technique, the freeway reopened long before government engineers' most optimistic projections. More recently, the Defense Department sought to spur the development of a driverless vehicle by offering a $2 million prize to a team that could prove that they had developed a working prototype.

Operating under a climate of punishment and recrimination, on the other hand, lowers the morale of contracting civil servants, rewards fear-induced caution and stifles innovation.

A well-functioning procurement system depends on developing a large cadre of skilled government personnel. In order to serve the taxpaying public and meet the needs of agency managers, acquisition professionals must promptly and accurately describe what the government wants to buy, identify and select quality suppliers, ensure fair prices, structure contracts with proper monetary incentives, and manage and evaluate contractor performance.

Sadly, the contracting workforce desperately requires a dramatic recapitalization. A bipartisan, post-Cold War, 1990s initiative severely reduced the contracting workforce, leaving the government unprepared for a post-Sept. 11 spending binge. In the last four years, contracting dollars have increased by half, but there's been no corresponding growth in the workforce.

For 15 years, the government has skimped on training, while contracting officers faced growing workloads and confronted increasingly complex contractual challenges. Scarce resources, when they became available, were allocated to oversight, rather than to supplementing, supporting and training procurement experts. Senior contracting officials increasingly bemoan that no young person in his or her right mind would choose government contracting as a career.

The old adage - an ounce of prevention is worth a pound of cure - rings true. More auditors and inspectors general will guarantee a steady stream of scandals, but they'll neither help avoid the scandals nor improve the procurement system. Conversely, a prospective investment in upgrading the number, skills and morale of government purchasing officials would reap huge dividends for taxpayers. We think it's an easy choice.

So, thanks for your attention to public procurement. Now, do you want to be part of the problem or the solution?

COMMENTS

• Nothing new about the general media covering only bad news, "If it bleeds, it leads." FEMA, for example, did a great job for at least a decade, but did that epoch of excellence received any memorable public acknowledgement? Every human resources department in the federal government does a great job at least 95 percent of the time, but when did you read about that? The same goes for the armed forces and every other sector of government. Casting blame -- along with telling others how they should conduct themselves -- seems to be our national avocation. This time the contracting sector got nailed and then nailed again. Complaining about it won't do anything. Richard Tedrow Posted November 9, 2005 9:13 AM
• Sorry, but I have to disagree with the idea of giving COTRs more authority and power to make changes to contracts. Most COTRs are overseeing contractor performance in an "other duties as assigned" mode and really do not have time to know the ins and outs of the contract, let alone the acquisition process or rules. Yes, this is a generalization but having been in contracting for over 15 years, I've seen what happens when people who are supposed to know the rules make mistakes, let alone someone who performs these duties when they have the time. Add to that, DoD acquisition professionals have to take many acquisition classes and be certified to do their jobs. There's barely enough money for our training so I doubt there would be funding available to also train COTRs enough to take on some of these responsibilities. DoD Contract Specialist GovExec.com reader Posted November 7, 2005 2:05 PM
• It is very interesting to see an article written by the very personnel involved in putting in place the policies and procedures that allow massive abuse of the system. Control was thrown out the window with the regulations in a reinvention storm that allowed the political appointees to “manage without being controlled by regulations.” The lack of control and ethics on the part of managers could only lead to mass abuse. This abuse did not start with the current administration; it has been perpetuated by the lack of regulations and ethics in the current administration. Many of the personnel that received the “Hammer Award” for doing away with the required guidance are now able to use the lack of regulations as an excuse for not being responsible for waste and misuse of taxpayer dollars. Contracts that had very specific requirements and performance standards have now been replace with Schedules that carry over for 5 years or more and have no standards of performance. If the money is left on the floor, you can’t blame the contractor for cleaning up the mess. The excuse of making the federal procurement system more like the commercial system and adopting commercial best practices is nothing short of endorsing bribery and favoritism. There is not one major corporation that has not paid off to settle a complaint of paying “kickbacks” or bribes; this is the commercial “best practices” because it increases the bottom line. Unless you are willing to place stringent requirements over the contracting process, you can expect nothing less than the “best practices” because the contractors want the business and are willing to pay a premium for large profits. The erosion of ethics and control is not an anomaly of the procurement process, the financial management process has evolved into a process of putting numbers on paper and hoping nobody ever asks to have an explanation. The days of good program auditing are gone, now if you can get your financial statement published on time you are wonderful and should be rewarded. I spent 46 years working with federal accounting systems and the erosion that has occurred in the last 11 years is criminal. Les Oden Posted November 7, 2005 1:11 PM