Three years after their creation, chief acquisition officers are hard to find.
Don't ask an agency to name its chief acquisition officer and expect a straight answer. While 15 of the biggest federal agencies are required by law to have a political appointee whose primary duty is acquisition, only two-the General Services Administration and the Energy Department-actually do. Most agencies assign the CAO title to an appointee who spends most of his or her time on other management issues while the actual responsibility for acquisition falls to a senior career official. As a result, if you want to talk to someone about acquisition, the agency probably will send you to the senior procurement executive.
While it might seem strange for so many federal agencies to be violating the law, many people in the business say it's the best way to respond to a bad piece of legislation. Requiring CAOs to be political appointees strikes some as insulting to the career officials who formerly held the most senior positions in acquisition. Moreover, no money was appropriated to fund additional appointee positions, making it impossible for agencies to comply with the law without swiping resources from other parts of the budget. When appointees, who often lack acquisition backgrounds, act as CAO in addition to holding other high-level positions, such as chief financial officer, they spend only a fraction of their time on procurement issues, rendering the CAO title virtually meaningless.
As a result, most agencies are in a state of happy noncompliance. "Joe Neurauter is our chief procurement officer who has the functions of our CAO, so if you list a person who is the CAO, it is Joe Neurauter, and no one else," instructed Antoinette Perry-Banks of the media relations office at Housing and Urban Development. But there is someone else. Deputy Secretary Roy A. Bernardi, an appointee, is the official chief acquisition officer at HUD. Apparently the department doesn't want to advertise that.
At the Transportation Department, Maria Cino serves as CAO-as well as the acting secretary of the department, which means she is unlikely to consider acquisition a primary duty. We can't be sure, because she declined an interview on the subject. Glenn Perry, director of contracts and acquisition management at the Education Department, says the actual CAO, Lawrence Warder, who also is CFO, jokes that Perry is the real CAO. Deputy Assistant Attorney General Lee J. Lofthus, CAO and CFO at the Justice Department, says, "My understanding [of the law] is that it's OK to have someone in a multifunction role, and that's what we do here."
Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee and author of the law that created the CAO position, the 2003 Services Acquisition Reform Act, has begun asking departments why they don't have CAOs and what they're going to do about it. Committee staff director David Marin says it is important for the CAO to be an appointee so the position is as senior as that of the CFO and CIO. He says Davis believes the position "has served to bump up the acquisition function in the agency management hierarchy and has provided a focal point for leadership and responsibility for agencywide acquisition."
Paul A. Denett, the recently confirmed political appointee who heads the Office of Management and Budget's Office of Federal Procurement Policy, agrees with Davis. Denett says that when he calls an agency seeking participants on the Chief Acquisition Officers Council, appointees are likely to be more involved than senior procurement executives, who tend to be swamped with the day-to-day activities of managing acquisition.
The two agencies that are complying with the law tout the importance of the position. "It does give you one source for policy. It makes someone directly responsible for addressing the issues of the acquisition workforce and being an advocate for competition," says Emily Webster Murphy, CAO of the General Services Administration.
The other law-abiding agency, Energy, recently filled its chief acquisition slot with Frank C. Spampinato Jr. He also is unlike other CAOs, because he served as a contracting officer at the CIA and worked his way up on the career side before becoming a political appointee. When asked whether being an appointee makes a difference, Spampinato says, "Even in a short time, I'll be able to accomplish more at this level because I have more authority."
To some, putting an appointee in charge of procurement decisions gives the impression that contracts are awarded based on politics. While CAOs usually are not involved in procurement decisions, they set acquisition policy and strategy.
One former procurement executive, who asked not to be named for fear of reprisal in his post-government life, says it was a huge mistake to make the position political. "You're taking a job that requires expenditure of public funds. It should be above politics, and you're making it political," he says. He added that it will further discourage young people from entering acquisition careers, because after working hard for 30 years, the most they will be able to achieve is the No. 2 slot.
A second former procurement executive, who also asked not to be named for the same reason, says most responsibilities of the CAO already were being performed by the senior procurement executive, a position that dates back to the 1980s: "For most people involved in procurement, when they looked at the CAO position, they scratched their heads and said, 'Don't we already have that?' "
With the official CAOs busy with their other duties, insight about acquisition priorities comes from procurement and other executives and the few CAOs who do handle acquisition issues. The shortage of contracting professionals tops their worry list.
At the National Archives and Records Administration, Allen Edgar, director of acquisition services but not CAO, has five vacancies on his staff of 18, which handles about $90 million in procurements each year. "We don't let [work] suffer. What suffers are initiatives," he says, such as efforts to promote technology and automation. He lacks the time or resources to devote to such projects.
"It's getting tougher and tougher to recruit . . . the more seasoned contracting officers," says Ronald C. Flom, associate director for management services, who handles CAO duties at the Office of Personnel Management. When he puts out a job announcement, fewer people respond than used to, he says. He tries to hire people with master's degrees and train them with the aim of quickly promoting them to contracting officer positions.
Darryl Hairston, deputy associate deputy administrator for management and administration but not the CAO at the Small Business Administration, says many people apply in the hope of getting an offer they can use to bargain for more money at their present agency, he says.
Where acquisition personnel must have technical expertise connected with the agency's mission-such as at the Agency for International Development-additional training is required. Michael F. Walsh, USAID chief acquisition officer, says many of his contracting professionals also need to be Foreign Service officers, which means they must speak a second language. He often sends them to study Spanish, one of the easier languages to learn, for four to six months.
The shortage of workers is especially pronounced in Washington. Elaine C. Duke, chief procurement officer at the Homeland Security Department, says 15 percent of the department's 900 procurement positions are vacant. Many are in Washington. She's trying to fill the openings by building a DHS fellows program, which people will enter at the GS-5 or GS-7 level and then get promoted each year, eventually reaching GS-12.
The Federal Emergency Management Agency, which has faced a large number of vacancies since Congress more than doubled its acquisition workforce after Hurricane Katrina, has filled nearly 90 percent of its positions. "That is something we've been working on for a year now, building up headquarters staffing and local staffing in the Gulf Coast area," Duke says.
Rajkumar Chellaraj, chief acquisition officer and assistant secretary for administration at the State Department, says because procurement at State is decentralized throughout regional offices, including two big ones in Frankfurt, Germany, and Fort Lauderdale, Fla., recruitment has been easier. Neither of those locations has as tight a market for acquisition professionals as Washington does. "We haven't had to scramble for people at this point," he says.
Rodney Benson, CAO and director of acquisition and grants management at the Centers for Medicare and Medicaid Services, says being in Baltimore is a huge benefit because there's less competition for acquisition professionals. But at the same time, there's a smaller workforce. He has about five openings among 106 positions.
Money also talks. Efrain J. Fernandez, who is associate deputy assistant secretary for acquisitions, though not the CAO, at the Veterans Affairs Department, says tuition reimbursement, recruitment bonuses and relocation expenses can help lure people to the Washington area. "It's something that others might not be offering, so when you're trying to sway people, it helps [them] make a decision," he says. He's also trying to set up an industry-government exchange program so acquisition professionals from the private sector can serve for a time in federal agencies.
Boyd Kevin Rutherford, assistant secretary and chief acquisition officer at the Agriculture Department, would like to create internship programs similar to the type he helped oversee while serving in Maryland state government. "Unfortunately, people don't generally come out of college saying I want to be a procurement officer," he says, so agencies have to create programs that draw them in.
An additional challenge has been recruiting people for a profession often painted in a negative light. During the past few years, several high-profile white-collar fraud cases have beaten down morale. "There's been a lot of negative talk within the community. . . . We want to focus on all the things going on every day that are benefiting taxpayers," says Education's Perry.
A few agencies are automating parts of their procurement process, so announcements, bids, awards and post-award contract management can be tracked through a Web-based system. SBA expects to launch such a system in fiscal 2007 and Justice will introduce its new integrated finance and procurement system next year. EPA plans to replace an aging system with one that would enable more automation by fiscal 2009. The State Department already relies on a logistics management system that tracks procurements from start to finish.
Contracting officers at the Treasury Department will begin rating contracts according to performance and cost this October through a new software system. "It will give me the status [of contracts] and help me understand what's working well and what's not," says Tom Sharpe, Treasury's senior procurement executive.
Luis A. Luna, EPA's chief acquisition officer and assistant administrator for administration and resources management, says he would like to "greatly increase" the use of performance-based contracts over the next five years. Performance-based contracts offer monetary or other types of rewards for outstanding performance by contractors. In fiscal 2005, about a third of EPA's $1.3 billion in contracts were performance-based, an increase of almost 10 percentage points over the previous year.
Meanwhile, a number of contracting shops are focusing on improving their own performance. State's Chellaraj has worked with acquisition models that emphasize customer service in the private sector. He would like to bring that "customer is king" approach to his department. He measures quality and length of time to award a contract in judging how well contracting officials are performing their duties.
"We are a very global organization and so consequently we've got to ensure that the acquisition practices are uniform throughout the department," he says. State spent $6 billion through contracts in fiscal 2005 and has more than 200 procurement offices worldwide.
The ultimate goal, Chellaraj says, is to deliver procurement services in a timely, transparent manner for as little cost as possible. That's what he focuses on when he's not overseeing his office's other responsibilities, which include property and facilities management, diplomatic mail services, publishing and library services, translation, setting allowance rates for government personnel abroad, supporting schooling for the dependents of those abroad, reporting on workplace safety requirements, and providing support for the president, vice president and first lady when they travel overseas.
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