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Why Things Go Wrong

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Stuff happens. Things go wrong for a wide range of often unpredictable reasons. But when there are glaring signs that go unheeded, or old saws or presumptions that are allowed to dominate, there is really no excuse for the poor results that follow.

This is clearly true in federal acquisition, which is responsible for the expenditure of nearly half of the federal discretionary budget. The quality of the acquisition process largely determines the path to success or failure. Thus, when an acquisition strategy is fundamentally flawed, confounding, and illogical, it is not hard to predict that the long-term outcomes will be less than optimal.

One such procurement being conducted by the Defense Information Systems Agency offers us a particularly illustrative example.

The procurement, known as Encore III, is big, complicated and important. It is worth an estimated $17.5 billion over 10 years and will be the agency’s primary source for a diverse, evolving, mission-critical and technically sophisticated set of IT capabilities. Once awarded, contract holders will compete for work on a task order basis.

So, is DISA structuring the acquisition to ensure it has access to the broadest possible array of providers and innovation? Is it structuring the acquisition to ensure that quality and capability are the dominant factors? Sadly, the answers are no and no. In fact, at a time when the government as a whole, and the Defense Department specifically, is calling for new, innovative ways of doing business, Encore III is on track to do just the opposite.

Take Encore III’s treatment of past performance, one of the most important elements in federal acquisition. The concept is simple: The likelihood of successful performance in the future can often be best judged by how a company has performed the same or similar work in the recent past. But while past performance is a critical evaluation factor under Encore III, inexplicably DISA will only consider past performance for work done for the Defense Department, even though the nature of the work involved is very similar to work performed by contractors at other federal agencies and in the commercial sector.

While DOD certainly has some unique needs, to suggest that only companies with experience doing such work at DOD in the past are qualified to do it in the future defies logic. Indeed, mere months after Defense Secretary Ash Carter’s high profile visit to Silicon Valley and the opening of DOD’s new innovation center there, DISA is conducting a massive IT acquisition that will exclude virtually all of the nontraditional, innovative companies and ideas DOD says it wants to attract.

It doesn’t stop there. In direct contravention of DOD policy, Encore III will be procured on what is known as a “low price/technically acceptable” basis, under which awards must go to companies that are minimally technically qualified and have the lowest price. Policy — and common sense — says that such strategies are only appropriate when the contract requirements are well-defined and the work being performed is relatively uncomplicated. On that basic test, Encore III is 0 for 2.

For one thing, the specific requirements are not only not well-defined, they are, by definition, unknown. This is a 10-year contract with a wide range of components. Specific requirements will be determined as they arise and will then be obtained through a second layer of competition. Only then can the agency reasonably determine what strategy makes the most sense for a given need. Moreover, many of the capabilities Encore III covers are anything but uncomplicated; indeed, some are highly complex.

There are other problems with DISA’s proposed strategy that have been repeatedly communicated to the agency. But limiting the competitive aperture via past performance restrictions and using low-bid buying strategies are more than enough to make one wonder what DISA is thinking. This contract involves complex, mission-essential support for the warfighter. It strikes at the heart of DISA’s mission. Unfortunately, the acquisition strategy doesn’t reflect that.

Sadly, we can thus predict now a less than optimal outcome over the life of the contract. And for that, there is and will be no excuse.

(Image via AlexRoz/Shutterstock.com)

Stan Soloway is president and CEO of Celero Strategies, LLC. He formerly served as president and CEO of the Professional Services Council, and was deputy undersecretary of Defense for acquisition reform and director of the Defense Reform Initiative during the Clinton administration, receiving the Secretary of Defense Medals for Outstanding and Distinguished Public Service. He is a principal of the Partnership for Public Service and a member of National Contract Management Association's Executive Advisory Board.

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