Government Executive - Authors - Stan Soloway

Federal agencies and Congress hold the keys to success as states take on SNAP and Medicaid

Stan Soloway — Tue, 25 Nov 2025 15:33:54 -0500

The One Big Beautiful Bill Act (OBBA) shifts responsibility for administering key welfare programs, including SNAP and Medicaid, to states and counties. But federal agencies remain responsible for oversight, enforcing standards, and managing the operational and compliance risks that come with the transition.

The law adds both enormous new requirements on states and locales, including tougher program integrity standards, and penalties for failing to meet them. They also include new work or “community engagement” rules and semi-annual rather than annual Medicaid eligibility redeterminations, all of which adds further burdens for both applicants and administrators. Meanwhile, for SNAP, the legislation also reduces the federal contribution for administration of the program by 50%.

Whether one agrees with the policy changes or not, one thing is clear: States or counties need relief from the often arcane and parochial rules imposed by Federal agencies that constrain flexibility and innovation—at a time both are desperately needed. And that puts the programs at serious risk.

The programs are already under tremendous pressure. Antiquated technology and processes create barriers for eligible applicants to receive benefits within federally mandated time frames. Because the process can be so daunting, one in five eligible Americans never applies for SNAP, leaving roughly $30 billion in unclaimed benefits. Meanwhile, Medicaid and Medicare paid nearly $63 billion in improper payments in fiscal 2024, largely due to systemic failures in data sharing, documentation, and conflicts of interest Meanwhile, states and counties are also under tremendous workforce challenges. Matt Chase, head of the National Association of Counties, told a recent National Academy of Public Administration conference that county employee vacancy rates run 15% to 30%. And virtually all state and local governments face endemic fiscal challenges.

The legislation does little to address these challenges; instead, states and counties are accountable by federal agencies for program delivery while being given little flexibility or support. That mismatch is a recipe for disaster.

What federal agencies can do

First, federal officials should grant states and counties flexibility to administer programs in ways that match their local capabilities and needs. This could include using outside employees and private-sector expertise to bolster workforces and deploy technology, including AI, to streamline operations.

Flexibility, however, must operate within clear federal guardrails. The authority should require states to report annually on key performance metrics, including timeliness, accuracy, beneficiary satisfaction, and the elimination of systemic conflicts of interest. Proposed bipartisan legislation from Reps. Buddy Carter, R-Ga., and Don Davis, D-N.C., would also prevent states from incentivizing delays or denials of eligibility; participation must solely reflect the number of people who qualify.

Second, technology can and must be leveraged to break down silos. In today’s environment, there is simply no excuse for beneficiary databases to not be integrated, and common processes aligned. For example, 85% of children receiving free or reduced-price lunch also come from families enrolled in Medicaid. Combining SNAP and Medicaid eligibility could save time and money for both governments and applicants. It might also be extended to WIC and Temporary Assistance for Needy Families, creating a more efficient system. But none of this will happen without Federal leadership and direction. But that requires federal agencies to agree to collaborate in new and different ways.

Third, federal agencies must prioritize the creation of integrated national data clearinghouses for SNAP and Medicaid to centralize eligibility, beneficiary, and provider data. These clearinghouses are critical to preventing waste and improper payments, which most often occur when jurisdictions cannot share basic enrollee information. For example, when a beneficiary moves between states, no central system currently prevents duplicate payments being made to different Medicaid-managed care plans.

The clearinghouses are already required by law, but progress has been painfully slow. With states taking on more responsibility, federal leadership must make their implementation a top priority.

The bottom line for federal managers

State and local governments face a real crisis in administering key benefits programs, and the risk of program failure is very real. But with active, sustained federal leadership on and support for flexibility and innovation, the challenges also offer a rare opportunity to rethink old models and implement new strategies that better serve the taxpayer and beneficiary alike. That’s the path that would serve us all best. And there’s no time to waste.

Stan Soloway is the Chair and a Fellow of the National Academy of Public Administration. He also chairs the Center for Accountability, Modernization and Innovation, which advocates for innovation in public benefits programs.

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Hegseth wants to insource work—but doesn't understand why it was outsourced

Stan Soloway — Tue, 10 Jun 2025 15:55:21 -0400

In late May, Secretary of Defense Pete Hegseth issued a series of directives aimed at driving greater discipline and efficiency and eliminating redundancies and waste in Defense contracts. At a high level, the directives require a secretariat-level approval and/or a DOGE review prior to the award of any IT or professional services contracts with a value of over $10 million and all advisory and assistance services contracts valued at over $1 million. Additionally, the directives require that, prior to awarding an advisory and assistance services contract, components scour all alternative internal governmental sources, including GSA contracts, and wherever possible, “insource” work that would otherwise be contracted for.

The Secretary’s goal of reducing unnecessary, duplicative or overly expensive contracts or contractors has merit. No one could reasonably argue that there isn’t bloat across the department, including in its contracts. Nor could one reasonably argue that some contracts have not outlived their usefulness or are simply not delivering the expected value. And the focus on “outcome or performance-based” procurements makes eminent sense, although, as has been the case for 30+ years, we too often fail to realize that doing so is not actually about contracting, but rather about significant engagement across the spectrum of acquisition functions.

None of that is new. Indeed, the Hegseth memos are in many ways a combination of strategies we have seen from DOGE and, ironically, witnessed more than a decade ago from the Obama administration. Like the DOGE’s approach to contracts and contractors, Hegseth’s memos are sweeping in nature and rely on a number of assumptions, at least some of which lack context or data. Ironically, the directives for secretariat-level reviews and insourcing initiatives largely amount to expanded versions of policies implemented in the Obama DoD.

So, the real question is whether these directives are likely to result in the desired outcomes. History suggests otherwise.

First, as noted above, Hegseth’s directives are sweeping. The sheer volume of contract actions that will require DOGE review is staggering, orders of magnitudes greater than the “peer reviews” for contracts over $1 billion implemented during the Obama years. Those reviews, conducted by seasoned acquisition professionals, at times caused significant delays and, not infrequently, disputes between the component buyer and OSD.

Will the DOGE reviews be conducted by similarly seasoned experts? And if the DOGE reviews required under the new directive are to be substantive and impactful, it strains credulity that this greatly expanded volume can be done in in just 48 hours from submission, as required by the Secretary’s memo. This suggests they will either be cursory in nature or, as has been too often the case with DOGE, based on simplistic “quick looks” rather than serious analysis, thus raising the question of why do them at all?

Second, the memos are part of an effort to reduce the cost, role and pervasiveness of systems integrators and “consultants” (hence, the restrictions on advisory and assistance contracts). But they miss the more fundamental question: why is the government so reliant on both?

Say what you will about policies of the past, the stark reality today is that, in large part, the government relies on systems integrators and advisory and assistance contractors because over the years it has hemorrhaged so much of its own internal capabilities. And to be candid, early indications are that the bleeding has only been exacerbated by personnel actions of recent months.

Whether the right contractors or contracts are in place, or whether the requirements companies are being told to execute against are the right ones, is for others to decide. But at its heart, this is an issue of human capital -- of the government’s continued struggles to attract and retain critical talent. In fact, advisory and assistance contracts are, almost by definition, primarily reflective of internal talent gaps. Likewise, the Secretary’s expressed shock that some contractors are making more than government employees reflects a crucial misunderstanding: contractors compete for and compensate talent in a highly competitive, open marketplace. Comparing their total compensation to government salaries, particularly for the kinds of skills the government has been unable to hire, ignores that longstanding reality. So too does simply comparing compensation; total lifecycle costs paint a very different picture.

Most importantly, nothing in the memos speaks to a meaningful talent strategy that will help the government reverse its talent trajectory. In fact, even as the memos talk about using or hiring internal talent, elsewhere the administration has been eviscerating the civil service and eliminating programs and initiatives, like the digital services, designed to bring that very talent to bear. Every study produced by the Defense Business Board during my time on it, as well as scores of others, have highlighted the government’s continued lack of a contemporary talent strategy that realistically assesses the art of the possible, the investments that will be needed, or the workforce development and support that is essential.

In short, none of what Secretary Hegseth proposes can be achieved absent the kind of real, cogent, and bold human capital strategy that should actually underpin efforts of this type.

The memos are also silent on solutions we know will improve and expand the competitive marketplace for, and innovation in, the government: greater reliance on truly commercial buying strategies, as initially envisioned in the acquisition reforms of 30 years ago; finally dealing with the long-known barriers to entry into the government marketplace, including arcane audit and accounting processes, policies governing intellectual property, and more fulsome data sharing across components and agencies. After all, opening the competitive aperture is the surest way to drive efficiency and effectiveness, and hold contractors accountable both for performance and for innovating.

Reducing redundancies, ensuring costs are fair and reasonable and, to the extent possible, recapitalizing key internal talent, are all important goals. Unfortunately, it’s not at all clear that these new DoD directives will get us much closer to those goals. The layering of more bureaucracy rarely works. We’ve seen versions of this movie before; it’s time we learn from the lessons of the past, not just observe them.

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The president’s procurement order offers a real opportunity. Let’s not squander it

Stan Soloway — Thu, 17 Apr 2025 16:23:00 -0400

Less than a month ago, I wrote in Nextgov/FCW about serious concerns I, and many others, have with a number of the Trump Administration’s early procurement-related actions. These include refusing to pay for contracted work already duly performed; the dramatic increase in the government’s use of “termination for convenience” clauses; questions about the appropriateness of GSA mandating contract adjustments mid-performance; arbitrary staffing cuts; and more.

As I said then: buckle up, there’s more to come.

Indeed, on April 15, the president signed what could be a very impactful, procurement-centered executive order. And this one has the potential to move the needle forward in important and positive ways.

To start, let’s set aside some of the rhetoric surrounding the order and focus instead on what it actually requires. There are two key parts. The first is establishing a requirement for agencies to procure commercial, rather than custom, software. The second is a major streamlining of the Federal Acquisition Regulation, the 2000+ page tome that governs most all federal procurement.

While not entirely new, both goals are well worth supporting and pursuing. Done right, the order offers the potential for real transformation. So, what will success require?

First, it is essential to pay attention to and learn from the lessons of the past. For example, the development of the Federal Acquisition Streamlining Act, the most significant reform effort in recent history, was one of the most collaborative policy initiatives I have ever been involved in. Great care was taken to involve all relevant stakeholders to engage in open dialogue among agency, congressional, industry and third-party experts. Further, it was not only remarkably collaborative, it was also entirely non-partisan. Only through that kind of open and collaborative process was it possible to build the requisite trust so critical to success. Beyond the importance of collaboration in any major change effort, the reality of our contemporary politics makes it all the more critical. To be clear, the politicization of acquisition really began more than twenty years ago and since that time, real or perceived procurement errors or “scandals” have all too often become proxies for broader policy battles. That cannot continue if we are serious about empowering the acquisition workforce and transforming the culture. That workforce needs to believe their leaders have faith in them, will support them and see them as part of the solution rather than the source of the problem. Without that, real change will prove elusive.

Second, the new EO is not the first time a preference for commercial solutions has been established. This was a core component of FASA — and the evolution of FAR Part 12, which governs commercial items — and has been the focus of most every reform effort since.

Here, too, the FASA experience and what followed offers important insight. Most significantly, there is a big difference between the commercial buying authorities as they were originally envisioned and the FAR Part 12 of today. The original FAR Part 12 recognized that the core tenets of public procurement could be achieved in a system that was not burdened by traditional government-specific contracting requirements that were principally the product of the days when the government — particularly the Pentagon — was a monopsony buyer.

Unfortunately, since the passage of FASA, some 150 contract clauses have been layered on to the original FAR Part 12, many of which have no statutory basis. That would be a great place to start the FAR review.

It is also notable that when opportunities have emerged in the past to take a “clean sheet” approach to federal acquisition, especially the Federal Aviation Administration’s Blue-Ribbon Panel and the evolution of Other Transactions Authorities, the end result often looked very much like Part 12 — as Part 12 was originally envisioned. And in both of those cases, achieving the full potential of the reforms has been inhibited by a tendency to add unnecessary FAR clauses — or “non-FAR” clauses that have much the same effect — and which serve as primary obstacles for commercial companies entering the federal market. This is particularly true of a continued reliance on government-unique cost accounting procedures that bear limited resemblance to the accounting standards that govern the rest of the economy and of often arcane, zero-sum approaches to intellectual property and technical data rights.

Third, the real inculcation can’t happen without a clear future vision and the commitment of the human and other resources that will be needed. FAR transformation is a multi-functional, cross organization challenge and must be approached as such. Contracting professionals do not operate in a vacuum.

FASA, especially its aftermath, taught us that simplifying the rules was not the same thing as making acquisition “easier.” Indeed, in some ways it made it more complex. Commercial buying itself requires different and varied skills and culture than traditional FAR models. We almost certainly underestimated the human capital component of what it would take to affect the kind of major changes we envisioned. This remains an unavoidable reality. Driving sustainable change, especially in the world’s largest and most complex organization is not merely a matter of simplifying rules and capitalizing on technology. For change like this to take hold, thoughtful, data-supported talent management and development, rather than arbitrary assumptions or personnel cuts, must hold sway.

There’s a lot to unpack in the FAR and all of the agency supplements covered by the order. And doing so in 180 days is a mammoth undertaking. But much of the crucial groundwork has already been laid.

And complicated as it may be, every time I wonder if yet another such effort is worth it, I remind myself that one of the government’s first uses of artificial intelligence was to help acquisition professionals decipher the acquisition rules. That’s crazy. Now, we have another chance to change the game. Let’s not squander it.

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Contractor pay is a government issue

Stan Soloway — Thu, 22 Jun 2023 10:42:23 -0400

Earlier this month, the Florida Phoenix reported that a handful of workers at several customer call centers operated by contractors for the Centers for Medicaid and Medicare Services walked off the job to push for higher pay and protest layoffs. It would be easy enough to dismiss this as just another in a long string of recent stories about labor-management disputes. But this one is different, and it highlights a systemic challenge that needs to be addressed.

Contractors don’t decide on wages and benefits for work such as that performed by the CMS call centers; the federal government does. Wage levels are established by the Labor Department through the Service Contract Act. Under the SCA, wages are based on local or regional averages for the same or similar work. (Full disclosure: I consult on a range of matters to a number of companies that do SCA-covered work, including the company at the core of the CMS issue).

The SCA, enacted five decades ago, serves an important purpose. It is designed to protect workers by preventing what some call “wage arbitrage” from becoming the principal determinant in government procurement decisions. This is particularly relevant in procurements for hourly labor, where workers can be the most vulnerable. But despite the array of forces that have fundamentally altered the world of work, the SCA hasn’t been significantly modernized. As a result, while it protects workers on one level, it also creates a set of challenges that are, at their core, unfriendly to workers and constrain their pay.

For example, while wage determinations establish a floor beneath which federal contractor pay cannot go, they are also a ceiling. After all, if a competition for a contract is heavy on labor hours and highly dependent on price—which most of this work is—anyone bidding a higher wage would only price themselves out of the competition. And beyond the competitive realities companies have to deal with, there are no incentives (and many disincentives) for the government to pay higher than the Labor Department’s wage determination. In simple terms, when a contractor workforce believes their wages or benefits are unfairly low, the only actual remedy is through the government, not the company.

The problem is further complicated in regions where the government, via its contractors, is the largest provider of certain services. In those cases, including some of the CMS centers, SCA wages are artificially constrained because the data being used to determine the regional averages for the same or similar work is dominated by the SCA wages themselves.

Similarly, the SCA prescribes what must be spent on health and welfare benefits. Here, the problem is one of analytics: The current levels required under the SCA do not come close to matching the actual costs of basic health insurance through either the Affordable Care Act exchanges or on the open market. The SCA’s underlying analytic models long pre-date the modern health insurance environment.

It’s also important to note that the workers at the call centers, who are paid an average of about $16 per hour, are asking for an increase to a “living wage” of $25 per hour. That introduces yet another wrinkle. The SCA is not designed to establish a living wage. Its focus is on prevailing regional wages.

This is not to suggest that the workers at the CMS call centers do not have cause to be upset. But the remedies they seek are not likely to be found in the company involved, or with any company. Instead, they are to be found at the Labor Department.

The good news is that there are adjustments that can be made which would help alleviate some of the challenges presented by the SCA, as currently constructed.

For one thing, if Congress agreed, the federal minimum wage (which is now $15 per hour) could be replaced by a living wage baseline upon which pay rates are determined. Health and welfare benefits levels could be tied to the current market costs of basic health insurance (which might even be possible without statutory changes). And in an era of increased remote work, wage determinations could be tied to where an employee lives rather than where the work is based.

These are just a few ways in which the system could be improved to enhance workforce opportunity and equity. It is far from a complete list. But to date, there has been little political will or incentive, in either party, to seriously explore new models and methodologies that are more aligned with today’s realities. Unfortunately, absent such action, workers across the country will continue to feel undervalued, companies (including those with the best of intentions) will continue to be caught in the middle, and the full potential of the SCA will remain unrealized.

Stan Soloway is president and CEO of Celero Strategies, former president of the Professional Services Council and former deputy undersecretary of Defense for acquisition reform.

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Opinion: USDA’s New Proposed Labor Regs for Contractors Go Way Too Far

Stan Soloway — Mon, 28 Mar 2022 09:17:14 -0400

It is always a bit jarring when ideas that have been tried and failed multiple times in the past are yet again put forward as if their weaknesses had somehow disappeared into the ether. But political posturing and “message” policy is a longstanding, bipartisan reality of government. Nonetheless, when it happens, it’s always important to step back and remember why the idea was a bad one to begin with.

Such is the case with the Agriculture Department’s recently proposed labor law regulations, which might otherwise fairly be named “Blacklisting Redux.” According to USDA, it wants to ensure that the contractors it does business with have solid records of compliance with more than a dozen labor and labor-related statutes. To achieve that, the rule would require every contractor on every bid to certify their compliance with every statute, list every violation they have ever had (going back an unlimited number of years), and define what was done to mitigate the violation (fines paid, processes changed, etc.).

On the surface, this seems eminently reasonable. After all, we are talking about stewardship of the public dollar and no one would disagree with the notion that only law-abiding companies should be recipients of federal funds. But beneath the surface, the proposed rule is a disaster. It is poorly conceived, places inordinate responsibility on government employees to make subjective decisions on sometimes complex matters of law, is duplicative with existing compliance processes, and is likely illegal.

First, a quick history. The first “blacklisting” rule was one of the last regulatory acts of the Clinton administration. It was the focus of a super-charged internal debate in which I was a participant. Although originally catalyzed by a campaign promise, there was no disagreement with the intent of the rule (which covered much more than labor law). But its practical impacts and execution challenges had not been at all thought out. There was no clear, data-driven, objective process by which contracting officers could make the required “responsibility” decisions properly and fairly. Nonetheless, the rule was issued, and was then promptly withdrawn by the George W. Bush administration.

Essentially the same rule was then proposed during the Obama administration. It was thrown out by the courts and nullified by Congress via the Congressional Review Act. And now, in 2022, an almost identical rule is again before us, this time coming from a single agency and applicable only to that agency’s contracts.

So why, if we all agree that we have to guard against the government doing business with companies that have a pattern of violating labor (or other) laws, is this such a big deal? Let me offer four reasons why this was a really bad idea in the 1990s, in the 2010s, and still today.

First, the proposed rule inappropriately places on contracting officers the responsibility for making consequential legal judgments for which they are not, cannot and should not be expected to be prepared. As was true with its predecessors, nothing in the rule provides any kind of objective standard by which a contracting officer can assess whether a pattern of violation exists, or what the relative severity of “violations” of various laws might be.

This is particularly important because the laws covered by the proposed rule are extremely complex and unintended administrative errors are routine and often even made with the tacit or explicit approval of a contracting officer, or even the Labor Department. Yet each of those administrative errors is a technical violation of the law and would be reportable under this proposed rule. Moreover, one honest mistake in, for instance, a prevailing wage determination, could impact a large number of employees—and each of those employees represent an individual violation. As a result, without a clear and objective standard that defines a “pattern” of abuse, particularly given the complexities of the relevant laws, companies could well be unreasonably disqualified.

Second and related, contrary to what its advocates say, the rule really is a blacklist. Imagine you are a contracting officer trying to make that responsibility determination. Before you are three bidders: one with a handful of violations of a given labor law; another with slightly more violations of a different law; and a third with even more, but again, of a different law. What is a contracting officer to do? Without a clear and objective process, he or she simply doesn’t have the time, training or resources to determine if one company’s violations were more serious than the others, which company's record is objectively “worse,” which violations were administrative errors and which were intentional, or how to weigh their relative recency or what remedial actions were taken. As a result, the contracting officer will have little choice but to default to the path with minimal optical risk, regardless of whether it is the right or fair decision.

Third, the rule ignores the fact that we already have a robust process for determining whether a company is ethical enough to be eligible for government contracts. It is called “suspension and debarment.” The review is conducted by experts, founded in evidentiary procedures, and specifically intended to weed out the really bad actors. Some have argued that the process is not used often enough, even though the rate of suspensions and debarments has actually grown in recent years. But the answer to that concern is to address it head on, not substitute a bad imitation elsewhere.

Finally, it’s not at all clear that USDA has the right to impose its own labor regulations in areas otherwise governed by the Labor Department. Not only is it senseless to have multiple sets of compliance regimes; Labor is the department charged by statute with the regulatory responsibility over labor law compliance and it has its own extensive regime of remedial actions and penalties it can impose, all the way up to debarring a company from future federal contracts Why USDA has seen fit to step out on its own–or be thrust into the forefront–is a mystery.

If there is real data that confirms that the government is routinely doing business with genuinely unethical actors with established patterns of violations of law, then we ought to look at our current suspension and debarment processes to figure out why this is the case. But the proposed USDA rule is not the answer. It should be sent out to pasture. For good.

Stan Soloway is president of Celero Strategies LLC and was deputy undersecretary of Defense during the Clinton administration.

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Making the Customer Service Executive Order Really Work

Stan Soloway — Thu, 06 Jan 2022 13:18:57 -0500

On December 13, the Biden administration issued a sweeping executive order designed to drive new and better ways to improve the “customer,” or citizen, experience with government agencies. According to the order, the focus of these efforts will be on “modernizing programs, reducing administrative burdens, and piloting new online tools and technologies that can provide a simple, seamless and secure customer experience.” It is an ambitious and important initiative that sets bold objectives across a wide spectrum of federal programs from health to retirement, and from poverty to passports. It seeks to attack some of the most pernicious challenges in government management, many of which were defined in a compelling article by Annie Lowrey in The Atlantic (“The Time Tax”) and echoed by President Biden when he signed the order.

As with any major reform effort, success will be defined in many ways and determined by many factors. But clearly, early and quick “wins” are critical. The good news is that, despite the complexity of many of the challenges, the opportunities for those wins are available. The key is to identify and jump on them without delay, but to also do so in a truly strategic manner.

Specifically, let’s not jump into the business of fixing front end apps and websites until we’ve fully defined all of what really makes up the citizen experience—and what drives it. Any efforts to improve the technology and tools available to citizens must not only be underpinned by a comprehensive assessment of the disaggregated array of critical citizen services programs, but also by an equally comprehensive assessment of the underlying business processes and policies that govern the programs themselves.

General Services Administration Administrator Robin Carnahan’s declaration that “we’re going to fix the damn websites” is spot on. But real fixes, real improvements in the full customer experience, are more about the underlying processes and policies that govern the citizen or customer journey. It’s both the toughest part of the puzzle and the one with the biggest payoff.

That said, the pandemic has helped to highlight some of the most glaring gaps in the delivery of citizen services, particularly those that are federally funded and state administered. The lessons learned as a result can form the basis for action. For example, the pandemic-driven flexibilities that allowed state and local governments to hire part-time employees, rehire retirees and contract for private sector support for an extraordinary surge in back-logged benefits claims expired four months ago. Meanwhile, states and cities continue to face backlogs of millions of claims coupled with massive staffing shortages (Denver is down to just 70 caseworkers in its human services agency). Why has the authority not been reinstated? After all, the demand is not going away and most experts estimate it will take years to fully address it.

Additionally, there are already critical funds and opportunities in place to address other challenges, but they have yet to be acted on. As one example, in the face of many reports of problems with the implementation of unemployment insurance programs (most of which involve organized technology incursions as opposed to individual fraud), earlier this year Congress appropriated $2 billion to modernize unemployment insurance and reduce fraud while improving access to benefits for unemployed claimants. To date, only $140 million has been committed to the states. Why? The systemic improvements enabled by the funds would go a long way toward improving claimants’ experiences during very difficult times.

The bottom line is that because of these, and other pandemic-related initiatives, we now know how effective the flexibility to pursue innovation through technology as well as multi-sector partnerships—many of which are currently proscribed by federal administrative rules and limitations—can be. Making that flexibility permanent, within the bounds of a set of immutable guard rails, all centered around the ethos of service to beneficiaries, would pay real dividends in a surprisingly short period of time and for decades to come.

President Biden’s order covers three dozen programs across 17 agencies. It could catalyze the most significant reforms in decades to government management and, more importantly, to the plethora of ways in which citizens interact with government at all levels. Its shear scope is exciting and full of potential. Some enhancements, such as those described above, can be implemented quickly and help meet the executive order’s directive that substantial results be recognized in a year. But the truth is that it will take much longer to really take hold across the complex, disaggregated array of programs and services. Quick fixes won’t meet the mandate; smart strategy and the long view will. President Biden has provided the framework. Now, let’s get to work.

Stan Soloway is president of Celero Strategies LLC and chairman of the Center for Accountability, Modernization and Innovation, which advocates for driving innovation in citizen services.

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Raising the Contractor Minimum Wage: It’s Not as Simple as it Looks

Stan Soloway — Fri, 09 Jul 2021 13:15:50 -0400

One of President Biden’s first actions following his inauguration was to issue an executive order requiring that the minimum wage paid by government contractors be at least $15 per hour. While it will affect only a very small percentage of workers (the vast majority of contractor employees are already making more), it is an important step. But while the order itself is straightforward, its implementation will be complicated. As such, it is essential that the implementing rules fully account for a range of impacts. What’s more, they should be informed by lessons learned the last time the contractor minimum wage was increased (as the result of a 2014 executive order).

Biden’s directive will be reflected in new wage determinations covering the federal prevailing wage laws (the Davis-Bacon Act for construction and Service Contract Act for services) issued by the Labor Department’s Wage and Hour Division. Initial implementation guidance is expected soon. These laws were created to ensure that companies did not use wage arbitrage, especially involving those at the lower end of the wage scale, as a key tool in competition for government contracts. “Prevailing wages” established under the laws are to be fair, reasonable, and consistent with local market realities. Put another way, contrary to what some like to allege, for the most part it is the government, not companies, that determine the wages employees are paid under government services contracts. And although implementation of the laws can be remarkably (and unnecessarily) complex, the role and rationale of the SCA in particular are supported across industry. After all, they level the playing field for wages and, at least theoretically, enable companies to compete on the basis of other, more substantive factors.

At the same time, because they apply up and down the spectrum of hourly wages, the prevailing wage laws also complicate implementation of the executive order. For example, if Employee A is making $12/hour and Employee B, who has slightly more experience and responsibility is making $14/hour, do they both now get $15? Do they get proportional wage increases? And what about the vast majority of those already making over $15/hour? If those making less are getting pay raises, doesn’t that change the calculus of what those employees should be paid? Otherwise, real wage compression can occur. And that would run directly counter to the administration’s goal of accelerating upwardly mobile wages.

Then there are the budget implications. Agencies depend on service contractors to execute their missions. Substantial increases in wages will drive up operational costs. How much time will agencies have to adjust their budgets before implementation is mandated? What impact will the new fiscal requirements have on agency operations?

These are not new challenges. The contractor minimum wage was increased almost 50% six years ago and is today well above the national minimum wage. This experience should inform the implementation of the new executive order to avoid shocks to the system. This is essential because Biden’s executive order is likely to have greater impact than the 2014 executive order, since the number of workers affected (those who currently earn between the current contractor minimum wage and the new contractor minimum wage) is almost certainly much larger than seven years ago.

There are other issues to consider as well, including longstanding questions about the prevailing wage laws that speak directly to the spirit and intent of Biden’s executive order and the administration’s goals. As such, the new order presents a unique opportunity to finally deal with them.

While intended to provide a floor beneath which wages cannot drop, the SCA also creates a ceiling. After all, no company that submits a bid including wages above the SCA’s prescribed level can expect to be competitive or compensated. Nonetheless, because the Labor Department has not, and likely cannot, entirely keep up with local or regional market shifts, wages are often dated and artificially low. This is particularly true in cases where government operations are a dominant force in the local labor market. In those situations, the government effectively sets the market for wages in the relevant job categories. Whatever the government’s current wage rate might be, it is the de facto prevailing rate since there are no external market forces to contend with—even though it may be well below what the company or its employees might think is fair and reasonable.

Further, the Bureau of Labor Statistics surveys on which the SCA wages are based are regional in nature. As such, the underlying data are drawn from both higher and lower cost areas to create a regional mean. That may make sense for analytical purposes, but when the work involved is being performed in the higher cost area, the “prevailing” wage is actually lower than what is being paid to other workers in the same area doing similar jobs for non-government employers. Moreover, contractors can only be reimbursed for wages that are consistent with the wage determination, which may or may not be adjusted in any given year and is not subject to any kind of automatic cost of living increase. In any event, the current circumstances can create a bizarre combination of a wage safety net and wage suppression, and some additional flexibility is clearly warranted.

The administration has appropriately made wage security and equity a foundational element of its agenda. We know from studies by Treasury Secretary Janet Yellen and others that improving wages drives productivity and work quality. This is no less true in government contracts. Biden’s executive order sets the stage for a new minimum wage for employees working in support of government missions. For it to work as intended, and for the administration’s broader goals to be achievable, we need to take advantage of this moment to tackle the EO’s inherent complexities, as well as the broader gaps that have long existed. That’s where real progress will be made.

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Diversity RFI Opens the Door to Rethinking How Government Reaches Its Goals

Stan Soloway — Wed, 19 May 2021 14:08:25 -0400

One of President Biden’s first actions upon taking office was to issue an executive order rescinding Trump administration policies that undercut diversity, equity and inclusion training programs at agencies and federal contractors. More recently, the Office of Management and Budget took the unusual step of issuing a request for information seeking potential DE&I solutions to improve a range of government activities, including service to public assistance beneficiaries and federal procurement.

While RFIs are generally used as a market research tool to inform procurements, the administration is using this one as a kind of crowd-sourcing application for policy solutions. That suggests the centrality of DE&I to the administration’s larger management agenda as well as an openness to new ideas and thinking. As such, it is an opportunity that should not be underestimated. At the same time, the issues raised by the RFI are highly complex. It is imperative that any initiatives be assessed holistically and that the “easy button” be studiously avoided. Further, since any initiative must have a measurable goal against which progress can be measured, we need to make sure that each initiative is tied to data that is as accurate and current as possible. To do otherwise risks putting initiatives in place that are sub-optimal or founded on the wrong premise.

One good example of this is federal procurement. The administration wants to find better ways to leverage the government’s spending power—now over half a trillion dollars a year—both to ensure all communities receive their fair share and as one tool to help close income, wage, and opportunity gaps. To that end, the administration has laid down an initial marker, setting a 15% goal for federal contract dollars flowing to “small disadvantaged businesses.” Is that the right goal? Truth is, we don’t really know. We actually do not know how much federal contract spending is going to small disadvantaged businesses today. We know how much in prime contracting dollars is going to a set of firms that meet the statutory definition, but it is not clear that the definition itself is adequate. And we definitely don’t know how much subcontracting money is flowing to SDBs. The data is simply not collected in a way that would provide anything close to an accurate picture. Logically, that problem needs to be solved before establishing a goal. Only then will we have a sound baseline from which to determine the right goal and to measure progress.

Further, this is the perfect time to ask questions about whether we are even measuring the right thing. No one is asking whether the government’s traditional ways of measuring DE&I in federal procurement through traditional spending goals is the only or best way to achieve the desired outcome. Clearly, setting aside a portion of contracting dollars, and requiring prime contractors to set aside an additional amount for SDBs is one important tool. Likewise, there have to be better ways of ensuring that higher-tier subcontractors can obtain their own past performance reports so they are positioned to bid for additional work as a prime contractor. But all of that aside, our procurement preference programs today focus on only one metric: company ownership. There are some programs that also account for where the work is done, but their foundation remains centered on who owns the company.

Is that the only way to generate greater opportunity? Is the opportunity (and income) gap more meaningfully closed if one individual accumulates the bulk of the wealth or might we actually make more progress by focusing on the location of where the work is performed? Should we dramatically expand current programs and build new ones that incentivize companies of all sizes to locate work in underserved areas? Some forward-leaning companies are already doing so, but the incentives, at the federal level, remain inconsistent and limited.

And what about the “value” of the work performed? Especially in a struggling economy, creating jobs is always the top priority. But are our broader DE&I goals genuinely served when the bulk of set-aside or subcontracted work is on the lower end of the value scale (lower wages and less upward mobility)? Doesn’t that exacerbate the problem rather than solve it? If a mid-tier or large company locates high-value work in an underserved urban, rural or tribal location, wouldn’t that be at least as likely to help close the gaps as a contract performed in an economically advantaged area, like metropolitan Washington, D.C.?

I do not pretend to have the answers nor am I at all in favor of a burdensome new regulatory regime that instructs businesses on how they should manage their work. That would be a disaster. But the RFI is a great launching point for the kind of broad and comprehensive conversation that is needed to make certain that what we are doing will, in fact, achieve the intended goals without placing undue burdens on individual companies or federal agencies. That conversation starts with the data and requires a wide open aperture.

If the administration’s important initiatives are to succeed, we first need to answer the question of where we are today. In other words, we need a baseline—driven by data and the right analytics—from which to build. Only then will we be in a position to properly define success and address the very complicated questions of how we will get where we want to go. It’s the conversation we should be having now. It’s the conversation that can help ensure we don’t fall into the trap of hitting the easy button.

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Biden Appointments Signal Major Changes In Digital Operations and Acquisition

Stan Soloway — Tue, 20 Apr 2021 11:18:19 -0400

Generally speaking, the governing team being assembled by the Biden administration has been marked by calm competence and a lack of major controversy. There are always appointments that spark debate, but overall, the transition has been relatively free of drama. At the same time, we are witnessing another less-noticed but significant transition that might be called the accession of the digital transformers.

Over the last 25 years, each successive administration has taken “e-government” and technology to the next logical level beyond that achieved by its predecessor. The progress has been consistent and almost entirely non-partisan. But it has never moved fast enough to keep pace with the world in which government must operate, let alone the marketplace on which it so depends. While it is too soon to say for certain, early signs suggest that we may be on the cusp of a significant leap forward.

First and most obviously, the nearly $2 billion contained in the American Recovery Act recognizes the abject need to modernize the government’s technology capabilities. Equally important, though less discussed, are President Biden’s early executive orders around the collection, analysis and sharing of data, including across programs and agencies. The funding and orders open the door to entirely new and innovative approaches to the execution and management of any number of government operations, including public benefits programs.

Second, look at who is being placed in the relevant positions. Across agencies, veterans of the government’s digital initiatives—including the U.S. Digital Service and the General Services Administration’s 18F technology and design consultancy—have been elevated to positions of significant influence and responsibility. There’s Eric Hysen, former head of the U.S. Digital Service, now the Homeland Security Department’s chief information officer. Robin Carnahan’s appointment as GSA administrator is another excellent example. She has a lot of experience at various levels of government but, at the federal level, her reputation largely grew from her role as a leader in early digital transformation initiatives and one of the architects of 18F. And they are not the only ones. The digital service and 18F DNA is evident in virtually every agency. With the Technology Modernization Fund backing them up, and the willingness and ability to re-engineer and modernize not just technology but the business processes behind it, the opportunities for change are unprecedented.

Third, perhaps the most interesting appointment yet is that of Michael Brown to be the undersecretary of Defense for acquisition and technology—arguably the most influential acquisition job in government. He comes to the job with an extraordinary resume, just not one normally associated with that role. A former CEO of Symantec and the current head of the Defense Innovation Unit, he does not have the traditionally deep roots in the national security ecosystem and therefore brings to the job somewhat different perspectives than the norm. Indeed, while most of the discussion surrounding his nomination has centered on his expertise in cyber and in using technology to counter threats from China and elsewhere, too little attention has been paid to what his experience at DIU could mean for how the Pentagon accesses, adopts and adapts to new technologies and new ways of doing business. That could have significant implications for not just how the department buys, but how it develops, trains, and organizes its acquisition workforce, and how the critical vendor community goes to market.

None of this should come as a surprise. It’s an extension of what we saw throughout the Biden-Harris campaign and from the transition policy teams. But where organizations like 18F and the U.S. Digital Service (and its agency counterparts), or alternative acquisition strategies like Other Transaction Authority, may have been largely out of the mainstream until recently, they are now increasingly smack in the middle of it all. The new appointees are in positions to drive meaningful, sustainable, change on any number of levels.

As is true with any incoming administration, the Biden administration’s success will depend in large part on officials’ ability to engage and energize people, both inside government and across the diverse contractor community, as well as others who will be critical players in affecting change. But there is no doubt that the table is being set for change, that there is a new and palpable energy among those at the table. History has shown the early energy of any administration ebbs as lofty goals give way to practical, day-to-day realities, sometimes for good reason. But for those of us who’ve been around government for a long time, the prospects for meaningful change are actually pretty exciting.

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A Call to Service Is Essential to Building Back Better

Stan Soloway — Tue, 19 Jan 2021 07:20:31 -0500

Over the years, I’ve had occasion to write about the essential nature of national and community service and of the federal government’s role in making service open to all. Given the events of the last two months, culminating in the violent spectacle of January 6th and the divisions they represent, it is clear that the role of service is more vital than ever. Indeed, a renewed federal commitment to service and civic engagement is foundational to truly “building back better,” as President-elect Biden has pledged.

First, let’s be clear: Service will not solve all of the deep-seated problems we face. It is clear our nation is riven with racial, economic and political division. Communities, across the political, social, racial and ethnic spectrums feel disconnected and disenfranchised, often for very good reasons. Income, education, health and opportunity gaps are real and growing as a consequence of the pandemic. The inequities plaguing our nation cannot be ignored. Addressing them will take a massive, multi-faceted strategy. But as part of that strategy, we must find ways to build real cohesion within communities during a time of massive breakdowns in the discourse and structures that normally help us find common purpose.

As the political scientist Robert Putnam famously wrote, “community connectedness is not just about warm fuzzy tales of civic triumph. Social capital makes us smarter, healthier, safer, richer and better able to govern a just and stable democracy.” The data on this is clear: Engaged people in engaged communities experience far more connectivity, far more trust, and far more faith in others, including with those of differing races or ethnicities, political or religious perspectives. Today, it’s not so much that there is a shortage of opportunities for engagement, it is that too often they lack the kind of diversity that can effectively build the broad cohesion we need. Service can uniquely help do that.

If we are going to truly build back better, if we are going to find ways to overcome the anger and distrust that so dominates today, one of the most important things we can do is double down on support for expanded service opportunities for all. In other words, the new administration has an extraordinary opportunity to not only revitalize the national service movement, but to also catalyze new thinking that speaks directly to the needs of our times.

To accomplish this, three thoughts come immediately to mind. First, while volunteerism and service can help alleviate some of the symptoms of social, racial, and economic dislocation (i.e., literacy), there also needs to be a focus on the root causes of that dislocation as well. For example, we know that technology has an enormous impact on the way work is done and that, for all its positive benefits, it has also exacerbated many economic challenges, especially in the Rust Belt states. Thus, one part of a revitalized national service agenda could focus on those communities that have been particularly ravaged by the disappearance of industrial era industries. Why not use national service as a part of a robust national strategy to expand retraining and reskilling to those who suffer the most from this long evident transformation? The need is massive and current resources woefully inadequate. Why not create a national corps of talented young people solely focused on improving tech literacy and basic tech skills across affected communities?

Second, a national service agenda for our times must be led from the top. A revitalized national service strategy could include a “service corps” at every agency. A number of agencies, including the Federal Emergency Management Agency and the Veterans Affairs Department, already have such programs, so we know how to do it. For example, the Housing and Urban Development Department could have a corps focused on helping improve financial literacy among public housing residents; the Labor and Transportation departments could partner with unions to create a kind of “apprentice corps” through which people could learn trade skills in high demand (this would fit nicely with investments in infrastructure). The possibilities are almost endless.

Third, a revitalized national service agenda should drive self-reflection by the service community itself. That extraordinary community has done a tremendous amount of good over many decades, but it is important to consider how inadequate cultural knowledge or other factors may contribute to implicit biases in funding decisions or otherwise limit the impact of individual programs. This kind of reflection is important to any movement and the service movement is no different.

An expanded national service agenda must also have broad political support. Given the fiscal challenges ahead, the Biden administration will have to work hard to solidify bipartisan support in Congress. That will not be easy. But given the overwhelming evidence that service can be a tremendous force multiplier in building common purpose, a focus on its unique “returns on investment” should provide ample rationale. One could even envision the two parties working together on an annual national service summit, akin to the National Conference on Volunteerism and Service which used to bring thousands of service members together to celebrate service initiatives of all kinds. Such a gathering, solely centered on building community, could be a powerful tool and send a powerful message.

Most importantly and as part of building back better, we need to rapidly synthesize the best thinking on the topic and turn ideas into action. A revitalized national service agenda need not reinvent wheels; instead, it should seek to capture and expand a far broader array of programs and strategies than ever before. The bottom line is simple: Little will do more to help us build a spirit of unity than finding common purpose and building communal cohesion. And that’s precisely what service does. It is hard to imagine a more worthwhile investment.

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Viewpoint: When an Executive Order Is Racist

Stan Soloway — Mon, 19 Oct 2020 14:15:57 -0400

In 1965, President Lyndon Johnson signed legislation requiring that federal contractors offer equal employment opportunities and prohibit discriminatory practices. Following on the heels of the landmark 1964 Civil Rights Act, the new statute sought to make clear that the federal government, and by extension its contractors, was committed to leading the movement toward equality and equity in America.

This week, 55 years later, the Office of Federal Procurement Policy will be accepting public comments on the implementation of President Trump’s Sept. 22 executive order on diversity and inclusion training. Under normal circumstances for a routine rulemaking, this would be just another step in the usual regulatory process. But circumstances are anything but usual and this is no routine executive order. Trump’s directive represents a stark threat to the commitments made by this nation in 1965.

The executive order would prohibit government contractors—all tens of thousands of them representing an estimated 20% of the U.S. workforce—from doing internal training within their own companies that includes the teaching or exploration of concepts like systemic racism and white privilege. Companies that violate the order would be subject to a range of penalties, including contract termination and even debarment. This order follows one of similar form and substance prohibiting such programs in federal agencies and the military.

The comments submitted on Oct. 21 will almost certainly cite the unprecedented intrusion of the federal government on internal, private company practices. Some will point out that the order places companies in the untenable position of pitting their values against their (and their employees’) economic interests, even survival. They will attempt to explain that the increasingly diverse American workforce offers great opportunity, but also requires thoughtful strategies for building organizational cohesion. The concepts of race and privilege must be openly explored. The comments will also include questions about the challenges of compliance with the order and the potentially extreme penalties. And they will question why the administration has already opened a hotline for employee complaints even before the implementing rules have been written. I would add one more point. At its heart and as the term is understood and defined today, the executive order is racist.

To reiterate: “as the term is understood and defined today.” How is it possible to address issues of race and equality in America without having open, even difficult conversations about the very concepts and terms the order prohibits and enabling those conversations to take place in a contemporary context? Indeed, the terminology may be old but the way the issues are thought about and discussed today is new. Is America a “racist” country? Is there systemic racism? Is white privilege real? There are, of course, scores of experts qualified to discuss these issues. But in their contemporary context, the basics are actually not very complicated.

Start with white privilege. As Washington Post columnist Christine Emba wrote, white privilege is “the level of societal advantage that comes with being seen as the norm in America, automatically conferred irrespective of wealth, gender or other factors. It makes life smoother, but it’s something you would barely notice unless it were suddenly taken away—or unless it had never applied to you in the first place.” That doesn’t mean individuals, regardless of color, haven’t worked damn hard to get where they are. In its most basic sense it means that if you, like me, were born white, you have certain innate and structural privileges. Can anyone reasonably disagree with that?

By that same logic, a society in which white privilege exists, is a society in which there is systemic racism. After all, “racist” and “racism” don’t just describe the evil acts of the likes of Sherrif Bull Connor or the Boogaloo Boys. As Robin DeAngelo, author of “White Fragility” explains, “Racism is not simply the utterance of racial slurs or acts of racially motivated violence—behaviors, in other words, that are performed by individuals.” Simply put, whether it is a root cause or offshoot of white privilege (or, in a unique way, both), it can be conscious or unconscious, structural or unintended. That’s why efforts to eliminate implicit bias in hiring and promotion are so important and have become so ubiquitous. It is also why we have socio-economic goals in federal contracting.

There are, to be sure, many complex layers to these issues. And we can, indeed must, openly discuss, debate and come to grips with what it all means and how to address it. It is neither easy nor comfortable. But leaders and organizations lead by example. As the law Lyndon Johnson signed more than a half century ago made clear, when it comes to working toward the American ideal, the government needs to lead the way. Prohibiting fulsome teaching and discussion across the full spectrum of issues associated with race and racism in the country today is exactly the opposite. It is regressive. It has real economic and societal implications. It is likely unconstitutional. And it is racist.

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When Politics and Procurement Mix, The Effects Can Be Deadly

Stan Soloway — Thu, 17 Sep 2020 12:10:02 -0400

As the national response to the pandemic and associated economic crisis continues to unfold, it is becoming increasingly clear that we are again in territory where politics meets procurement. And that should be a concern for every American.Let’s start with the obvious: The effective and efficient execution of any portion of the pandemic response largely hinges on the effective and efficient performance of our acquisition system. The process by which federal contracts and grants are awarded is critical to support the manufacture and distribution of protective equipment, ventilators, or therapeutics and to deliver assistance to individuals and businesses struggling to survive. It therefore follows that the responsiveness of the acquisition system to meet these critical needs in large part determines the efficiency and effectiveness of our government’s response.This is why it is so disturbing to read about cases in which important components of the national response have involved clear efforts to simply ignore the rules and protocols, from basic due diligence and pricing analyses to transparency. Yet, that is exactly what we have seen too often in recent months, including actions associated with Project Airbridge; sole source contracts for vital equipment that proved faulty; tens of millions of dollars wasted on a contract for ventilators that the Health and Human Services Department had to terminate; a complete lack of transparency around huge contracts for vaccine distribution; contracts awarded to an 11-day-old company that just happened to be founded by a former administration official; enormous grants made to a company in a manner that has raised serious ethical and other concerns, and more. Even worse, all of these cases share another common denominator: the actions were directed and sometimes executed by senior political officials who, it could fairly be argued, are not versed in good acquisition practices and who may be driven by incentives other than the mission itself.

To be fair, there is a lot of frustration with and a lack of confidence in federal acquisition. And to an extent, that frustration is understandable. The system can be slow, rigid, and overly bureaucratic. But the system also has built into it a wide array of authorities designed to deal with emergencies such as those we face today, authorities that, when properly exercised, actually do enable the kind of velocity and response needed to deal with exigent circumstances. Instead, we have witnessed too many instances in which senior officials have run roughshod over government acquisition professionals and the system of checks and balances designed to protect taxpayers—with less than optimal results.

Moreover, in some cases, some of these actions may actually be illegal. For example, reports suggest that political appointees have directly entered into some of these contracts, even though one of the fundamental tenets of federal procurement is that only a warranted contracting officer can commit the U.S. government to a contract. No member of the cabinet, no political staffer, no general, has that authority. It’s really as simple as that.

Many will remember that during the second half of the George W. Bush administration and for portions of the Obama administration, there were scores of hearings and investigations into acquisition issues and scandals—some real and some imagined. And while one can debate the degree to which they uncovered any pattern of legal or ethical violations, individually and together they did help clarify gaps in workforce resources, training and development, as well as in smart acquisition planning and strategy.

At the same time, some of these “scandals” essentially became proxies for larger political debates, particularly over the Bush Administration’s conduct of the wars in Iraq and Afghanistan and subsequent reconstruction. That politicization was largely unprecedented and significantly contributed to what most objective observers argue is today a largely risk averse acquisition workforce, one that tends to hew to rigidity rather than appropriate flexibility and creativity, largely because they have little faith that their leadership will support risk or that their performance will be evaluated objectively.Many of us shuddered when President Trump repeatedly made clear his animus toward one bidder on a major Defense contract or when he arbitrarily declared that Amazon’s contract with the U.S. Postal Service was a rip off. Prior to that, many were stunned with his very public denunciations of two defense contractors—denunciations that resulted in immediate and measurable drops in those companies’ market value. And this doesn’t even begin to address questions that have arisen around certain large border wall contracts. In none of those cases were his opinions informed by data. More importantly, they had no legitimate place in the deliberations or pricing discussions that were happening at the time. And now we have political appointees blithely deciding to take things to a new and even more dangerous level where they are actually directing awards in ways that appear contrary to the basic tenets of good public procurement or governance.

Acquisition defines the critical intersection of the public and private sectors and is central to the government’s ability to meet its many missions in a manner that is in the best interests of the American people. That is why the system is also specifically designed to be devoid of politics or political pressure. When that basic ethos is violated, it should be a matter of real, collective concern against which we push back hard. The integrity, credibility, and effectiveness of the process depends on it.

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Trump’s TVA Firings May Be a Harbinger of Things to Come

Stan Soloway — Wed, 05 Aug 2020 18:13:06 -0400

On Monday, President Trump took the highly unusual steps of firing the chairman and a board member of the Tennessee Valley Authority, and signing an executive order designed to prevent companies with federal contracts from outsourcing work to non-U.S. citizens. Trump was incensed about the $8 million annual salary commanded by the federally owned corporation’s CEO Jeff Lyash and the fact that TVA had reportedly outsourced some jobs to foreign tech workers.

Whether the firings were appropriate or Lyash’s salary is reasonable are issues for others. But the executive order raises real questions and offers valuable insight into battles likely to emerge as the U.S. economy recovers from the devastation of the COVID-19 pandemic.

The context for the president’s actions is important. The federal utility, which receives no taxpayer funding, had determined that it did not have within its workforce the requisite capabilities to move the company to the next level. As such, TVA decided to outsource its technology work with a plan to evaluate the effectiveness of the outsourcing before taking it beyond the initial phases.

On the surface, this is an entirely logical management decision. TVA’s plan was to take the outsourcing in stages, starting with only 20% of the work. Any expansion was to be based on performance. Further, TVA’s workforce dilemma is not uncommon or new, and it is often very pronounced in public sector, or quasi-public sector organizations. The combination of aging workforces and fierce competition for skilled technology workers has been well documented for many years. The federal government is an excellent example of this. Among the federal IT workforce, for every professional under age thirty there are 10 or more over fifty. That ratio is not improving and the imbalance is unsustainable.

However logical TVA’s process might have been, it generated unusual attention and controversy. To some extent, that attention is the result of the normal tensions and disagreements that arise between agencies and their workforces (and their unions) when potentially significant changes are contemplated. Those are debates that should be had.

But what is different in this case, and could be a sign of things to come, is how the issue of outsourcing has become conflated with offshoring (moving the work overseas) and the new pressures surrounding “Buy American” initiatives, even when the work is not leaving the country or the region.

In the case of TVA, those pressures manifest themselves in allegations about both foreign ownership of the companies involved and the reported use of non-U.S. citizens performing the work under H1-B visas. That’s where things, including the White House reaction, get particularly troubling.

As the nation recovers from the devastation of the pandemic, few would argue with the need to ensure that American jobs are prioritized. And in the case of TVA's outsourcing, that does, in fact, appear to be mostly true. Contrary to what has been reported, only a small percentage of the workforce will be non-US citizens and all of the work will be done domestically. The fact that the three companies contracting with TVA are all foreign owned or foreign based also became a central part of the narrative. Yet anyone who looked beyond the headlines would quickly realize that each of the companies have long standing and robust U.S. operations overwhelmingly staffed by American citizens who pay American taxes.

Yet, despite these facts, the reaction to initial news reports (and an intentional advertising campaign that was, according to its backers, aimed solely at the White House) was almost instant. Whether Trump’s executive order will have any real impact or will be mostly political window dressing remains to be seen. But what this episode has made clear is that during this time of heightened financial and employment insecurity, analytically-based management decisions can be challenged and company reputations unfairly damaged through the political process.

Indeed, while “Buy American” sounds straightforward, there’s significant potential for simplistic applications to have unintended consequences. One such consequence could be gleaned from what we have learned from the pandemic about the viability of remote work. H1-B visas are intended to be utilized when specialized workforce capabilities are not available. While there are undoubtedly some abuses of the system, the concept behind them makes sense. In TVA’s case (and other future cases) a prohibition on hiring H1-B visa holders could, however, pressure companies and agencies to fill workforce gaps with remote workers from other parts of the country who, unlike H1-B holders, pay no local taxes or contribute in any way to the local economy. Is that a better solution?

Finally, the TVA saga offers another lesson often overlooked. Decisions to outsource work may well be entirely justifiable and defensible. But they also have unavoidable consequences for the incumbent workforce. At a time of intense economic insecurity, it is more important than ever that such decisions be accompanied by well thought out plans for ensuring to the maximum extent possible that existing workers are not victimized as a result. Wherever possible employers need to include in their planning and execution a range of initiatives, such as reskilling and retraining workers, providing effective "soft landing" options, and more. The extent to which TVA assessed and addressed the impacts on its workforce are not clear. But such considerations, even if it means savings and efficiencies accrue more slowly, are essential.

As governments and companies continue down the path toward digital transformation, these issues will grow more acute. Whether it be through outsourcing or the digital journey itself, there will be labor implications. For any entity that is serious about optimizing its operations for the benefit of its customers, that journey has become inevitable. But the road taken also matters greatly. That's why as we talk about and pursue new technologies, it is imperative that we also talk, think about and act on behalf of the people who are most impacted.

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Hungry Children Can’t Wait for Government ‘Innovation’

Stan Soloway — Tue, 07 Jul 2020 12:05:58 -0400

Two months ago, I wrote in this space about the current pandemic’s potential to serve as a launching pad for innovation in our public assistance programs. At the time, I described a number of arcane policies and processes that were inhibiting the efficient, and much needed, execution of newly authorized emergency support: paper based processes at the Internal Revenue Service; overloaded mental health and substance abuse support lines; antiquated, COBOL-based systems for handling unemployment insurance, and more. My point at that time was that the pandemic offered an opportunity, indeed, a “clarion call,” for innovation.

That remains true. But what is also true, and has become ever more evident, is that those in need are struggling to get the critical support they need now. In short, even as we examine the lessons from the pandemic and evaluate the kind of major programmatic changes and investments that are required, there are steps that need to be taken immediately if we are to ensure that the safety net does what it is intended to do.Nowhere is this more true than in the Supplemental Nutrition Assistance Program, previously known as Food Stamps. In simple terms, because of outdated thinking and policies, millions of American children are almost certainly not getting the SNAP benefits they need. And that isn’t acceptable. And oddly, SNAP stands almost alone in the limitations imposed on it.First, a few facts. Moody’s Analytics projects that SNAP participation (need) will peak at around 70 million as a result of the pandemic. For the sake of comparison, the peak during the last recession was about 50 million. It is now estimated that fully 40% of households with children under 12 are “food insecure,” up from 15% a year ago. CNBC reported that as of mid-May, Florida had only taken action on 28% of the nearly 2 million claims that had been filed in the preceding two months.

Meanwhile, demands on other aspects of the public assistance ecosystem, prominently including unemployment insurance, have also skyrocketed. Yet, although implementation of expanded unemployment benefits has not been without significant challenges, Congress has given state unemployment s flexibilities that are, inexplicably, not available to SNAP program offices. As such, states are far better able to deal with the overwhelming demand they face. Specifically, the CARES Act authorizes states to use contractors and technology, rehire retirees and part-time employees, to deal with the unprecedented surge of applications for unemployment insurance.

Today, the District of Columbia and more than half of the states—evenly split by which party is in control of the governor's mansion—are now capitalizing on this unemployment insurance flexibility. For example, Washington, D.C., brought on contract support to deal with caller wait times that were as long as five hours; that has now been brought down to 30 minutes or less. In North Carolina, the state was logging more than 125,000 calls per day, but existing internal resources could only handle about 10% of them. Since hiring contractors to help manage the volume, the backlog has now been cut in half.

But not SNAP. Agriculture Department policy prohibits similar flexibility for State SNAP program offices. Moreover, the Families First Act expanded eligibility for SNAP but was silent on how states could meet those increases. As a result, it is almost impossible for many states to deliver food support to all children in need. Even worse, USDA recently reiterated that all SNAP applicants may only use paper documents as evidence of eligibility, even though other simpler, more efficient methods are available (e.g., electronic data from federal agencies such as the IRS). This just serves to further exacerbate inefficiencies at a time when timeliness is essential.

Think about that for a moment. We are in the midst of a major national health emergency and attendant economic crisis, and one agency has simply refused to allow states to pursue proven solutions to help deal with the incredible surge requirements they are facing. How does that make sense? How is that fair to children in need?

Let’s also be clear about a couple of things. Contracting-out eligibility verification or similar work can and should be accompanied by clear guardrails so that contract incentives are structured around the speed of delivery of support to those in need, the speed and effectiveness of issue resolution, customer satisfaction, and the accuracy of payments (an area in which SNAP has long needed improvement). In other words, contracts can and should be emblematic of what citizen-service and citizen-centric government is all about.

Second, adding temporary support is not an indictment of the existing workforce; how can a workforce sized for normal times be expected to handle the overwhelming demands of a crisis like this? While bringing contractors on board can open the eyes of state and federal government entities to different, often more efficient and effective methods and processes, the first and foremost goal is to get aid to those who need it, and to do so quickly.The good news is that there is a simple fix. Congress can amend the Families First Act to authorize states to do precisely what Congress has already authorized for unemployment insurance. This is not the time for tired debates about insourcing and outsourcing. Nor is this very complicated. But time is of the essence and Congress needs to act quickly, just as it did on the previous pandemic response bills. This is a time for getting nutrition to children in need quickly, consistently, and in a manner that protects the interests of both beneficiaries and the taxpayers. To do otherwise would be a disgrace.

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The Pandemic Is a Clarion Call to Remove Barriers to Innovation

Stan Soloway — Wed, 15 Apr 2020 16:56:50 -0400

Across the spectrum of relief and stimulus initiatives, many of them federally funded and state administered, antiquated technology and processes are inhibiting effective and efficient execution. As a result, we face the very real possibility that desperately needed assistance will simply not flow to those who need it nearly fast enough.

Indeed, to put in context the enormity of the challenges being faced by both the federal government and the states, consider the following:

For every 1% increase in the unemployment rate, Medicaid is experiencing an increase of one million applications.
Public assistance call centers are experiencing exponential increases in volume—a massive surge coming at a time when many centers, already struggling to meet routine needs, are dealing with health challenges affecting their own workforces.
The governor of New Jersey recently put out a desperate call for COBOL programmers. After all, that’s the language of the state’s now overwhelmed unemployment system. New Jersey’s system is far from alone. To further complicate matters, The CARES Act includes entirely new eligibility definitions that are not yet accounted for in any state unemployment insurance systems.
The IRS has acknowledged that there will be delays in processing emergency refunds for businesses refiling last year’s taxes because the process is paper-based and all but one of the agency’s processing centers is closed.
The Substance Abuse and Mental Health Services Administration continues to arbitrarily limit its use of contracted support, even as pressures increase dramatically on mental health systems across the country. The SAMSHA national mental health hotline has already experienced a call increase of nearly 900% since the start of the crisis. With expectations that the surge in need for mental health and other support will come in inconsistent waves—precisely a circumstance where contracted support is most needed—these restrictions, which are hard to defend in any case, make less sense than ever.

As many have suggested, it is critically important that Congress include funding for technology modernization in the next COVID response legislation. And that funding should not be limited to federal agencies; there should also be substantial, direct grant funding to the states. While some might argue that this is principally a state responsibility, these programs, while state administered, are federally funded and have average payment error rates of over 10%, meaning billions of our tax dollars are already wasted every year. Thus, it is clearly in our collective best interest to support initiatives that drive improved performance and reduced cost.

However, we can invest all we want in modernizing technology but we won’t get much value in return if we don’t also attack the underlying business processes and policies that drive sub-optimization. The legislation Congress is now crafting should become the conduit to truly unleash innovation and open the door to new, creative, and responsible solutions. This will not only address immediate problems but can also have long term programmatic benefits.

To that end, the bill should include authority for states to pilot new approaches to their management of federally funded, state-administered programs, provided those approaches meet four critical requirements: 1) improved support and service to beneficiaries; 2) reduced administrative costs; 3) documentation of impact (increased payment accuracy; rapidity of addressing beneficiary appeals; call center performance, overall customer satisfaction, etc.); and, 4) assurance that eligible beneficiaries do not lose any of their benefits.

Today, these programs are too often impacted by disparate and arcane rules that stipulate how and where contractors may be utilized, and how and where data or enrollment processes can be shared to facilitate cost reductions and improved service. This innovation pilot initiative would be specifically designed to attack those arbitrary and limiting factors. With this authority, and through well-constructed contracts, states will be in a far better position to facilitate implementation of the CARES Act. They will also have the ability to broadly explore and implement the kind of systemic changes that drive documentable long-term program performance—the need for which has been clearly highlighted by the current crisis.

To spur innovation, the process needs to be as open as possible. As such, the legislation should strongly encourage, even require (if that is possible) that states use an acquisition approach known as “Commercial Services Openings” (CSOs) or an equivalent methodology. At its heart, a CSO is pure performance-based acquisition. All interested parties respond to a problem statement with their proposed solution. From there, an agency can rapidly down-select to those it thinks are most relevant and viable. Gone are traditional, constrained, time consuming requirements processes and documents. Instead, CSOs offer the potential for an agency to see, and access, a much wider array of potential solutions than would likely have been otherwise possible. For states looking to transform their delivery of assistance services of all kinds, the process could be eye opening.

Winston Churchill famously advised that one should never waste the opportunities presented by a crisis. Crass as it may sound, his advice was right. While the coronavirus crisis is tragic by any measure, it also presents a rare opportunity—and an imperative—to innovate, to open eyes and minds, and to put in place a range of solutions that will benefit us all, now and in the future. Let’s not waste it.

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There’s a Playbook for Implementing the CARES Act; Agencies Need to Follow It

Stan Soloway — Tue, 31 Mar 2020 13:59:13 -0400

Some 15 years ago, the Professional Services Council and the Army Materiel Command teamed up on a joint “lessons learned” exercise focused on contracting issues that arose during the first phases of the Iraq war. As we prepared to brief the report to senior Pentagon officials, the commander of AMC suggested to me that we change the title. “Instead of Lessons Learned,” he said, “We should call it Lessons Observed. After all, we haven’t learned a damn thing.”

With the passage of the CARES Act, we are again on the precipice of a massive federal initiative, the largest of its kind ever. Of the $2 trillion called for under the law, agencies will spend billions of dollars on new federal contracts for both ongoing and surge activities. And looking back, many past lessons remain highly relevant. While imperfect analogies, the early days of the Iraq conflict, along with the days following Hurricane Katrina, the 2009 recovery and stimulus, and more, share a number of common traits and do offer some lessons worth keeping front of mind.

First, to paraphrase a military adage, we need to fight as we plan and plan as we fight. As agencies come to grips with their specific roles in the execution of the CARES Act mission, the centrality of industry partnerships are eminently clear. Engaging industry partners from the beginning, sharing objectives and tapping their creativity and expertise is not just smart management; it’s also essential to finding the best, most efficacious solutions.

How can we best surge capacity to meet the extraordinary demands numerous agencies will face? What is the best combination of people and technology available to meet any of the many disparate missions at hand? To what extent does the current crisis provide a path toward longer term innovation that can have hugely beneficial long-term effect? These questions can’t be answered in a vacuum. If there was ever a time for government to model a collaborative approach—something often discussed but rarely put into practice—this is it.

Second, urgency and emergency are not synonymous. In the cases of both Iraq and Katrina, the transitions from the initial emergency phase to sustainment were uneven at best and were central to many of the controversies that ensued. The CARES Act will likewise create a dizzying mix of immediate and mid-to-longer term actions—all of which are urgent, not all of which are “emergencies.” It’s up to agencies, and contractors, to individually and together carefully assess how and where emergency contracting authorities are—or are not—appropriate.

Expectations will be high and pressures will be great. “Success” for one community may well be measured by spending velocity—getting the money out there. But for others, and for taxpayers and those who will conduct the necessary after-the-fact reviews, success will be measured by whether the money was spent smartly and delivered actual outcomes.

Third, managing these dichotomous expectations will largely fall to the frontline workforce. But they can’t do it alone. At no time does leadership matter more than in times of crisis and the best provide their teams a sturdy layer of risk absorption. The risk aversion that is evident in so many areas of government is largely a consequence of a workforce that simply isn’t confident that, when things go wrong, as they inevitably do, they will be supported and protected by their leadership.

Implementing the CARES Act will require that the government’s acquisition and mission workforces, and their industry partners, be willing to take responsible risk; engage in and act on innovative strategies; seek new solutions; move out quickly and surely; and frequently challenge the expectations or demands of more senior officials in the administration or congress. There will be enormous pressure on everyone to deliver—pressure that will only be exacerbated by the upcoming elections. And deliver they will. But they’ll also need uncommon levels of clearly articulated and actualized leadership support of the kind we’ve not seen nearly enough of in the past.

Finally, early insight facilitates better oversight. Make no mistake about it. Within a year, and for a long while after, we are going to be treated to a series of inspector general investigations and reports, GAO studies, and congressional hearings assessing the government’s performance in executing the CARES Act. Indeed, comprehensive oversight is to be expected and is entirely appropriate. But we shouldn’t wait for after-action reports. The time to align agency plans with oversight community expectations is now. Agencies should explicitly seek to engage the various components of the oversight community in their planning—how they are going to address the immediate demands of the crisis; what their strategies are for the longer term; how and where sole sourcing work is called for; how they are going to use “limited competition” rather than full and open; what contract types or contract vehicles they plan to use, etc. Effective oversight requires depth and understanding of circumstances at the moment; and it’s up to those charged to engage all stakeholders from the start. It’s been done before (ask Greg Rothwell, the Homeland Security procurement executive during Katrina). It needs to be done again. Across the board.

There is a playbook for all of this, several of them in fact. Paying attention to those playbooks and capitalizing on core and common lessons learned is one important way to optimize our national response to the current crisis. Things will go wrong, but the frequency and severity of problems can be constrained, and the game of recriminations that always seems so popular in the aftermath of a crisis will be limited, if we learn from rather than simply observe past experience.

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Mixing Politics and Procurement Creates a Toxic Brew

Stan Soloway — Fri, 06 Dec 2019 12:23:41 -0500

Imagine this: You are a mid-career government acquisition professional responsible for making an award decision on a contract worth over $400 million. As you evaluate the bids you also can’t help but see and hear the president of the United States openly advocate for one bidder. You’ve already heard, directly or through channels, that one or more U.S. senators are also pressing for this company to get the award. What are you going to do?

This is the heart of the controversy swirling around the recent award of a border wall contract to a North Dakota company for which the president and at least one senator publicly advocated. Was the award politically influenced? Is the company the best positioned to build this portion of the border wall along the southwest border? Since the company was deemed unqualified on more than one previous occasion, one has to wonder: Has the company taken significant steps forward in its capabilities to the point where it is now best suited to the requirements of the contract?

Of course we don’t know the answers to any of those questions. Neither does the president or the senator. And we may only get answers should another bidder protest the award and the questions are litigated. But that’s not actually the biggest concern this incident raises. The biggest concern is that we even have to have this discussion.

This is not the first time recently that the issue of political interference has arisen in federal contracting. Amazon Web Services is currently battling the Defense Department over the award of a major cloud services contract known as JEDI (for Joint Enterprise Defense Infrastructure) to Microsoft Azure. Prior to the award, the conventional wisdom was that Amazon was uniquely positioned to win the contract. At least one competitor even took legal action against the procurement before bids were submitted, claiming that the competition was rigged for Amazon. Ironically, even as all this was going on, President Trump loudly proclaimed his disdain for Amazon and its founder Jeff Bezos, and made it clear he did not want Amazon to win the contract. Now, Amazon is claiming that the President’s explicit opposition to the company caused it to lose the award, which, of course, would be illegal.

I don’t know the government’s rationale for making the selections it made in the border wall contract or the Pentagon’s cloud contract. Nor do I know which companies are most qualified to perform the work. But here’s the thing: Neither does the president, or any senator, or any other elected official (and few, if any, appointed ones). And the fact that there are credible questions about political interference in the awards should concern everyone committed to procurement integrity. Allegations of cronyism may be as old as public procurement and at one time or another have beset almost every administration. But not at the level we are now seeing.

The federal procurement system is specifically designed to be apolitical. Members of Congress sometimes advocate for constituent companies, but the system is remarkably effective at absorbing those entreaties without inappropriately impacting actual procurement outcomes. Indeed, the very essence of federal acquisition is that awards must demonstrably be in the best interest of taxpayers. And any explicit or implicit effort to violate that core tenet is both illegal and a direct assault on the public interest. Full stop.

Likewise, the acquisition workforce is trained to be studiously apolitical in its work. As imperfect, even troubled, as the system is on many levels, one would be hard pressed to find a significant number of contract decisions that have been politically ordained.

That’s why the JEDI and border wall cases merit close examination and much more attention. In more than 30 years around federal procurement, I have never seen two procurements subject to such explicit political pressure, particularly from the president. We need to know if those pressures did, in fact, influence the procurement decisions and if the awards made were actually the right calls.

Americans deserve to know that such decisions are being made in the public’s best interests; that we can have faith in the integrity of this central function of government. Moreover, it is widely accepted that the acquisition workforce must be empowered to take reasonable risk. As such, they deserve to know they will be fully supported when they ignore political pressure and make thoughtful decisions for the right reasons.

Regardless of one’s views of this president or this administration, there should be no debate about the importance of ensuring that our procurement system is and remains as apolitical as is humanly possible; that direct or implied pressure from on high has no place if we are to ensure its integrity. Indeed, it would be a tragedy of massive implications if that core ethic were to become yet another norm tossed aside.

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Thoughts on the President’s Management Agenda: Kudos… With a Caution

Stan Soloway — Thu, 28 Mar 2019 09:00:00 -0400

Amidst whatever the current political climate might have been, for the last half dozen administrations, the president’s management agenda has consistently set forth a vision for government that not only serves as an important foundation for agency operations and priorities, but has consistently also built on the work of previous administrations.

Indeed, while every PMA has reflected some of the priorities of the relevant administration, for the most part the agendas have been apolitical and reflected a logical, if slow, progression in the modernization of government.

The Trump administration’s PMA is no different. To the administration’s credit, it avoided a “not invented here” mindset and grounded its plan in rationale, goals, themes, and, in some areas, specific priorities that reflect challenges and problems similar in nature to those identified for many years by previous administrations. Striving for better mission outcomes? Check. Improving customer service? Check. Improving fiscal stewardship? Check.

Similarly, the PMA’s “root cause” analysis also strikes some very familiar chords: regulatory burdens, siloed governance and management, sometimes torturous decision-making processes, concerns about workforce capabilities and competencies, leadership and culture. Further, the core management initiatives are, in the main, consistent and logical, as are the cross-agency priorities. Their implementation is now underway.

As with all such efforts, there will be heated debate over some elements, particularly in areas like regulatory reform and agency reorganization. Indeed, anyone who has lived through any of the several rounds of military Base Realignment and Closures can appreciate the challenges associated with major organizational changes. And while some might harp on the fact that there is little “new” in its themes, the authors of the PMA have wisely chosen to recognize that despite the clear (if uneven) progress achieved by earlier administrations, the core challenges facing government have neither been solved nor disappeared.

That’s all to the good. And good government practitioners and activists of diverse political perspectives are all working with OMB and the agencies to help those initiatives succeed.

Given the solid foundation on which the PMA is built, there are, nonetheless, two important opportunities that warrant additional attention.

First, on a macro level, while some initiatives have clear White House backing, there is not enough visible evidence of serious leadership engagement—cabinet secretaries, top White House officials, even the president—which we have seen in previous successful government

reform initiatives. Indeed, the most successful government transformation efforts have been marked by visible, unceasing attention and support of the very top leaders.

For example, the Clinton Administration’s National Performance Review was assisted by the direct involvement of the vice president. To be recognized by him with a “Hammer Award” was an aspiration across almost every federal agency. During the Bush II years, the administration was very open about the fact that key initiatives, for example, e-Government, were reviewed at cabinet meetings, thus putting cabinet members on notice that their progress (or lack thereof) had attention from the highest levels.

In short, top leadership engagement is a core principle of change or transformation. And leadership and culture are among the administration’s and PMA’s primary targets for improvement. As such, leadership itself has to be far more visible and engaged across all of the initiatives than has been evident to date. As the administration seeks to address the leadership challenges, risk aversion, and other characteristics that beset the federal government, it will have to openly and consistently “walk the walk” and incentivize and reward change.

At the micro level, the PMA frankly doesn’t provide adequate guidance or leadership on one of the most important levers available to the government to improve agency performance and customer service: acquisition. Over 50 percent of the discretionary federal budget goes out through contracts; even more through grants. It is thus no exaggeration to suggest that “as goes acquisition so goes the government.”

Within the context of the PMA, two of the eleven priority goals are primarily focused on acquisition: Category Management and Improving Major Acquisition Programs. Both are important. But both are also subsets of a larger framework which the PMA does not address. Category Management and improving major acquisition programs are both good goals, but they do not exist in a vacuum.

That is not to say that we need a raft of new acquisition policy “reform” proposals. In fact, that may be just what we don’t need. But what we do need is a more holistic vision that cuts across the full scope of acquisition initiatives and processes and across the PMA’s core themes and root causes themselves.

In fact, one idea is to specifically apply the PMA’s core themes to acquisition and to establish a set of metrics for measuring progress on each, particularly in the context of the PMA’s primary objectives of improving mission outcomes, customer service, and fiscal stewardship. This would elevate the acquisition conversation to the fundamental and cross-functional level it merits, and also provide a clarity of vision for the future.

Think about it this way:

Regulatory burdens. There have been countless efforts to reduce the regulatory burdens that so frequently slow the acquisition process and create barriers to market entry. And the efforts and reviews continue. But when it comes to regulatory reform, the PMA is silent on this critical topic. That could be easily changed.

Possible metric: Measure the increase in the number of federal procurements that include BOTH traditional and non-traditional federal contractors.

Management through silos and improved customer service. Indeed, while government-industry communications remain a common topic of concern, massive communication gaps within the government, largely between end-use customers and contracting officers, also continue to dog the process. Most contracting officers believe the program folks have taken over the world. Meanwhile, most program managers say just the opposite.

Likewise, the explosion in the use of “other transactions authority” (which enables procurements outside of the bounds of the Federal Acquisition Regulation) is largely being driven by customers who are frustrated by the pace and results of the current process. Fairly or not (and there is truth on both sides), they place much of the blame on the acquisition community. If improved customer service is a core goal, this perception cannot be ignored. Both challenges could be at least partially addressed through the use of customer satisfaction metrics—using an intentionally broad definition of “customer.”

Possible metric: conduct post-award 360-degree process evaluations in which all stakeholders, across both government and industry, evaluate the quality of the process---collaboration, clarity, responsiveness, etc. And use them as a tool for developing data to illuminate that which should be replicated and that which needs to be changed, driving improved organizational performance and, most importantly, outcomes.

Overly lengthy decision-making processes. Where else but in government does it take six months to award a small contract or two or more years to award one of size? Time is money and, in the current world of technology, two years can be multiple generations. We don’t really measure it. Let’s start -- openly and across the board.

Possible metric: Measure and report actual Procurement Acquisition Lead Time (PALT) Some agencies are taking some steps in this direction; yet there is no reason the initiatives couldn’t be broader and accelerated.

Workforce capabilities. Many acquisition leaders believe the workforce has dramatically improved, but that view is not necessarily shared by their “customers.” And there is little other than self-evaluations and certification levels to back up claims in either direction. Yet, the acquisition workforce of the future is among the government’s most critical human capital needs. Much work has been done, mostly by government professionals, to define the acquisition organization of the future. Imperfect as it may be, the “AoF” model offers a valuable starting point for building an acquisition capability maturity model of the type that we have and rely on for software. And in the process, it also provides a compelling picture of the skills and capabilities the workforce of the future will need.

Possible metric: Formalize the AMM (acquisition maturity model) and measure organizational attainment of targeted AMM levels.

Leadership and culture. Last on the list but perhaps most important of all, the government has a great deal of work to do to build the kind of culture needed in today’s environment. Nowhere is this truer than in acquisition.

Simply put, the acquisition environment is fraught with risk aversion. Numerous surveys of the federal workforce at large and acquisition professionals specifically, have documented the fear that if something goes awry, leaders will not be there to defend and protect the front line workforce. The good news, however, is that by implementing all or most of the above initiatives—especially the Acquisition Maturity Model and the 360 Evaluations--leaders will have more data to rely on and that, in turn, should serve to buttress their ability to support their people.

Beyond those initiatives, there are a range of tools, commonly utilized in dynamic private sector organizations, to encourage innovative thinking and reasonable risk taking. And while government functions within the context of a body politic that is often unforgiving, strong leaders can and will provide cover and reward to those of their teams who step out.

Possible metric/initiative: Agency sponsored “Innovation Awards;” internal “Innovation Challenges;” White House-led “Champions of Change” awards (similar to the Hammer Awards of old).

The PMA seeks to do just that (IT modernization, for example). But in other critical areas, especially in acquisition, the PMA’s vision is less clear and the map is generally non-existent. It’s certainly not too late to fill that gap.

A failure to do so could represent a significant opportunity lost.

Mr. Soloway is president and CEO of Celero Strategies, LLC. He served as deputy undersecretary of Defense for acquisition reform and director of the Defense Reform Initiative during the Clinton administration. This piece originally appeared in Perspectives on the President’s Management Agenda, published by the National Academy of Public Administration. It is republished here with permission.

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What the Country Needs: A Servant Leader

Stan Soloway — Tue, 04 Dec 2018 15:28:49 -0500

The late President George H.W. Bush epitomized what is known as the “servant leader.” Whatever anyone thought of his positions on various issues, one could never question his lifetime of commitment to service.

He was not alone in this commitment. Much has been written about Bush 41’s post-White House friendship and partnership with President Bill Clinton, under whose leadership Americorps and the Corporation for National and Community Service were born. President Jimmy Carter’s commitment to Habitat for Humanity embodies the ethos of service. And during Thanksgiving week, pictures of former President Obama chipping in at a Chicago food bank spread across the internet. There was nothing unusual about it; he and his family frequently have been seen doing volunteer service, while he was in office and since. Ditto for President George W. Bush.

But I have been struck over the last two years by the near absence of any similar images of, or messages from, President Trump or, for that matter, any members of his family or administration. Yes, there was the brief Thanksgiving visit to a military base near Mar-A-Lago. But unlike virtually every President in recent history, there has been no engagement of real meaning, no messages or leadership that conveys the value and importance of giving back and its centrality to the American experience. In the nearly two years since his inauguration, there have been two Martin Luther King Days of Service and two 9/11 Days of Remembrance and Service (both are officially designated as such), and the President has chosen to essentially ignore the service component. With few exceptions, the same is true for senior members of his administration. This too is a stark departure from each of the last several administrations. And it matters.

It matters because we are living in a time of such greatly diminished civility, painful divisions and a sharply reduced sense of shared national purpose. It matters because decades of data document that civic engagement, through voluntarism and service of all kinds, can serve as a great unifying force; as a critical foundation that enables a community to function effectively amidst a wide array of political, social, economic, ethnic and other differences. And it matters most because the national tone is set from the top.

More than 70 years ago, historian Arthur Schlesinger insightfully observed that voluntary organizations represent our “greatest school for self government.” Those who help lead such organizations he wrote, “have been trained from youth to take common counsel, choose leaders, harmonize differences, and obey the expressed will of the majority. In mastering the associative way, they have mastered the democratic way.” Nearly 20 years ago, Robert Putnam’s extraordinary book Bowling Alone reiterated the essence of Schlesinger’s message and opened our eyes to the dangers of decreasing civic engagement.

Yet, as Yoni Applebaum recently pointed out in The Atlantic, recent trends, most pre-dating the Trump administration, are cause for deep concern. In fact, while participation in voluntary organizations has been relatively steady, by 2010 only 1 in 10 Americans had served as a leader of such a group. Therefore, it probably shouldn’t be a surprise that polls taken just a few years ago showed that fully 25 percent of millennials questioned whether democracy was a good way to run a government. In a similar vein, it is notable that in the heat of the 2008 campaign, both Barack Obama and John McCain took a night off to participate in a nationally televised forum on the importance and value of public service, voluntarism and civic engagement. When I asked a senior Clinton campaign official why the topic had not come up again in 2016, he said that it just didn’t resonate in the polls. How sad is that?

So yes, it does matter that the President and his administration have been AWOL on the subject. And it matters that recent GOP budgets have consistently called for the complete elimination of the Corporation for National and Community Service, which, in addition to overseeing AmeriCorps and Senior Corps, provides essential support and leadership to scores of service organizations across the nation.

This is not a partisan political issue. Regardless of political persuasion, just about everyone I know shares a deep concern about the nasty nature of today’s public discourse, the inability to thoughtfully and respectfully discuss or debate, let alone compromise on often complex issues, and the overall breakdown of civility. The reasons for this are many and not all are recent. But as Schlesinger so cogently observed, incentivizing and growing a culture of volunteerism and volunteer leadership, is an indispensable tool in building and enhancing effective communities, democratic institutions, and democracy itself. This was core to President H.W. Bush’s ethos, as it has been to other presidents.

In that light, expanding the government’s leadership in national and community service needs to take on a renewed, critical urgency. And it is in that light that the absence of presidential leadership and action in promoting and enabling a culture of service, of shared purpose, matters. It matters a lot. And rarely has it been needed more.

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How a New Contracting Tool is Shaking Up Federal Procurement

Stan Soloway — Tue, 17 Jul 2018 13:01:35 -0400

The Government Accountability Office recently upheld a first of its kind protest of a contract awarded under the non-traditional contracting methodology known as other transaction authority. The protest and GAO’s decision have stirred debate over the future of OTAs and their potential to fundamentally disrupt federal acquisition.

First, some background. OTAs enable certain federal agencies, most prominently the Defense Department, to enter into commercial contracts outside the constraints of the Federal Acquisition Regulation. Historically, OTAs have been used to engage commercial companies during the research and development of new technologies without burdening them with requirements and costs associated with the FAR, which can be a major disincentive for companies to work with the government.

But the attractiveness of OTAs was often limited by the fact that once a selected technology entered final development and production—in other words, was ready for market— the FAR came back into play, thus obviating some of the very benefits the initial OTA was intended to provide. Advocates have long argued that extending the authority through full production or deployment (known as “production authority”) was the key to their success and to enabling the government’s access to the full range of emerging capabilities. Two years ago, Congress decided to do just that, at least for Defense. And that decision has, in turn, been instrumental in the dramatic spike in OTA activity since.

The GAO protest centered on a contract awarded through an OTA conducted by the Defense Innovation Unit/Experimental (DIUx) on behalf of U.S. Transportation Command. But within a few months, the Pentagon announced that the services provided under the contract would be extended across the department, increasing its value from roughly $65 million to over $900 million for departmentwide deployment. That created an uproar among traditional Defense contractors, and Oracle America filed a protest with GAO. The Pentagon quickly backed away from the expansion plan, but the protest remained.

The essence of GAO’s decision to uphold the protest was pretty clear-cut and easily addressed. GAO determined that under the Competition in Contracting Act, DIUx’s failure to make clear from the get-go that the resulting contract might be extended across the department was unfair to other interested parties. GAO did not question the use of the OTA process for the acquisition. The only real issue involved the expansion of its application. And on that point, DIUx acknowledged its error and clarified the resulting changes it is making to its own processes.

Normally, such a straightforward decision and response would have been the end of it. But in this case, it energized renewed debate over the use of OTAs and whether the protest decision signaled the beginning of the end of OTAs themselves, or whether they are being used appropriately. But make no mistake about it, the core issue here gets to the heart of the federal acquisition system itself: the Federal Acquisition Regulation.

This should not come as a surprise. After all, the dramatic growth in the use of OTAs represents the first time that the dominance of the FAR itself, and the community charged with executing it, has been so meaningfully and significantly challenged since the FAR’s creation in the mid-1970s, and possibly since the creation of its antecedent, the Armed Services Procurement Regulations of 1947. While there are other alternative acquisition methods, no alternative methodology can cover the scope, dollars and impacts of the OTAs recently awarded, in process, or planned.

Moreover, in granting the Defense Department production authority, Congress was clearly stating its willingness to give the department the chance to do business very differently. In so doing, it gave relief to growing frustrations over the limits of the existing FAR-based procurement system, which can make it exceedingly difficult for agencies to access commercial capabilities..

All of this suggests that any debate over the “appropriate” use of OTAs needs to be conducted in a contemporary, not historical, context. The most important questions are common to all federal procurements: are they delivering capability in a timely manner, at fair and reasonable prices, following a transparent and competitive process, and via contracts that are subject to reasonable degrees of accountability? But whereas those questions have typically been asked in the context of the FAR and how its requirements could be waived or reduced, with OTAs, the questions need to now be asked on their own merits, the FAR notwithstanding.

That challenges some of the most basic precepts that have guided federal acquisition for decades and under which the entire federal acquisition community has been raised and trained. No one really believes the government will move entirely away from the FAR anytime soon. But there is real potential for a substantially increased number of acquisitions to be conducted through something other than a FAR-based process that is often perceived, fairly or not, to be overly constrained by excessive rigidity and risk aversion. As I noted in this space some months ago, with OTAs, the Defense customer is speaking and a new conversation has begun. At a time when the customer experience is assuming a new primacy, it’s a conversation that cannot be avoided. Indeed, it should be welcomed.

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The Clock Is Ticking on Trump’s Management Agenda

Stan Soloway — Wed, 13 Dec 2017 14:00:00 -0500

We are now almost a year into the new administration, so it’s not really “new” anymore. Indeed, 11 months is a major chunk of time for any administration. I’ll leave it to others to debate the merits of various policy pronouncements during the last year, but one thing is clear: While better government management was a major theme of the Trump campaign, a real management agenda—one that is cogent, coordinated, leadership-driven, and focused on improving institutional and mission performance—is not yet in evidence. I’ve been in and around government for more than three decades, across five administrations. Like many of my colleagues, I would have expected more in the way of such a plan by now. And the clock is ticking.

It is true that every agency was required to submit to the White House Office of Management and Budget an individual restructuring plan. The details of those plans, as finalized by OMB, will presumably be reflected in the fiscal 2019 budget, which we will see in February. Although some of the agency submissions have been shared publicly, many have not. And thus the budget release will be our first real look at them and their implications, impacts and benefits.

But reorganization plans and a management agenda are very different things. The reorganization plans mostly involve the “what”: What are our mission priorities? What is the optimal organizational structure through which to achieve our goals? What changes, reductions or other adjustments might we make to better ensure success? Those are important questions, but a management agenda is more than that. A cogent and coordinated management agenda lays out the “how”: How will we change policies, practices, culture, and more to enable the desired outcomes? Without such a plan or roadmap, it’s hard to see how the proposed organizational changes can or will deliver the promised benefits.

There are other causes for concern as well. For example, we do not yet have a confirmed deputy director for management at OMB, even though it is through that position that a management agenda is typically developed and executed. We also lack senior management officials in a number of agencies, either by design (such as at State) or by dint of a painfully slow Senate confirmation process. Make no mistake. As much as Congress shares in any blame for the confirmation process, this is one of those rare occasions in which one party controls the White House and both Houses of Congress. And which nominations are moved and in what order is often driven by White House priorities—and that sends its own message.

Simply put, the president’s 2019 budget proposal is fairly close to final form and time is running out for it to reflect a meaningful, governmentwide management vision to serve as an essential baseline for this and future budget proposals. The issue also goes beyond the budget. A management agenda sets the administration’s priorities for the levers that are themselves central to the functioning of government—technology, acquisition, human capital and more. There appears to be no coordinated technology policy, such as emerged during the Clinton Administration’s National Performance Review, President George W. Bush’s E-Government initiative, or the Obama Administration’s innovation agenda. Meanwhile, although there are a range of generally disconnected acquisition initiatives underway, particularly at the General Services Administration and the Defense Department, how do they all intersect? And because they are inextricably linked, how do the acquisition initiatives align with a technology agenda?

Ditto for human capital—the lifeblood of the government. The linkages to technology, acquisition, even organizational change are obvious. All we know is that Congress wants to double the probationary period for federal employees (a step fairly described as being more about punishment than performance or empowerment) and continues to tinker with employee salaries and benefits (which is seen similarly). But what about a broader federal workforce agenda? What about the tremendous demographic, training and development gaps, let alone cultural challenges, that have long existed and are getting no better? Barely a peep.

A colleague of mine has said many times that change and transformation bear a lot of similarities to judo. No one move stands alone; success demands the coordination and alignment of a whole series of moves, many of which flow from each other. In the case of institutional change, those moves include but are not limited to clear leadership vision, timing, intra- and inter-organizational and cross functional collaboration, and coordination—little of which has yet been evident. By this point, nearly a year in, the Administration has had more than adequate time to put together a comprehensive management plan that supports its objectives. Now is the time to share, debate and discuss that plan, and to make sure the requisite leadership is in place to implement it. The clock is ticking.

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Breaking the Stranglehold of Calcified Federal Acquisition Policies

Stan Soloway — Tue, 10 Oct 2017 16:13:59 -0400

Mac Thornberry, Chairman of the House Armed Services Committee, thinks government ought to be able to take advantage of the robust world of online marketplaces (think Amazon or EBay). Thus, he has included in the House version of the 2018 defense authorization bill a provision authorizing just that. Since there is no similar language in the Senate bill, the provision will be decided in conference committee, although significant opposition jeopardizes its survival.

In truth, it shouldn't be a question at all. There is no reason the government cannot or should not be a part of this global shift. The only question should be how to make it work.

First, we have to answer the core question of the extent to which the government is willing to let go of longstanding acquisition policies and requirements. This is not a new question. In each stage of the decades-old movement to achieve real acquisition reform, some of the most important changes have been sub optimized by immovable orthodoxies. Think about the advent of the commercial buying authorities first created more than twenty years ago. Over the years, DoD in particular sought to water down or pull back those reforms. But Congress finally re-engaged and over the last two or three defense bills has reinforced its belief in the need for the government to break the stranglehold of the current acquisition process. The Thornberry proposal is yet another step in that journey, except now we know what to expect and what we have address in order to make it work. That’s where our focus needs to be.

For instance, the legislation declares that these established markets are to be considered “competitive” for the purposes of acquisition law. But are they? Do we have adequate insight and understanding of how they function, of the rules and math that govern dynamic pricing, and more, to ensure the government is getting the best price? Or, more fundamentally, given the vibrancy of these marketplaces, are we willing to let go of the traditional measures of competition?

Similarly, the legislation says that sales from small businesses that sell through these marketplaces are to be considered toward an agency’s small business goals. But here too, the transparency and validity of the means by which companies are defined as small (or self define as such) remains a question.

And then there is the requirement that the marketplaces report back to the government on every transaction. Will the government require Amazon and other companies to report the data in unique formats, with unique details to satisfy unique government requirements? Or are we prepared to accept more commercial-like information?

The list goes on: Labor practices and wage rates. Ethics programs. Audit provisions. There are any number of standing policies and practices that will have to be addressed in order to make the proposal work as designed.

These are critical, first-order questions and highlight why we can’t simply jump in with both feet without having done the requisite research and analytics. But there is a huge difference between opposing or questioning the efficacy of the proposal because of these complications and embracing it with a mind toward doing the hard work of addressing them and driving change. We’ve had too much experience with the former. Chairman Thornberry’s proposal again opens the door to a vital conversation.We should view the Thornberry proposal not just as a focal point for the next phase of acquisition reform, but as a natural next step in the digital transformation of government; a step that can dramatically improve efficiency and performance; one that can ultimately enable the government’s critical, organic acquisition resources to be focused on truly complex business and contract relationships, rather than devoting time to work that can be more effectively performed through automation and machine learning. It’s happening across the commercial sector. There’s no reason it can’t or shouldn’t happen in government as well.

So let’s hope the online marketplace provision survives conference and is included in the final bill. Sure, government never operate precisely like a business. But much of what the government buys—most of what the government buys—isn’t all that special or unique. And the emerging digital economy, including the ubiquitous availability of data of all kinds, and the related transparency that data provides, offers an extraordinary opportunity to really change the government paradigm. That’s the real power of the Thornberry proposal.

We can pose any number of reasons why the online marketplace proposal can’t work. We’d be far wiser to focus on how it can.

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The Trump Administration’s Innovation Problem

Stan Soloway — Wed, 06 Sep 2017 12:43:59 -0400

Just before Labor Day, the American Technology Council—the White House task force charged with propelling government IT to a new level—issued a broad set of initial recommendations. Coming from what has widely been deemed the most unorthodox administration in recent history, it's notable that the recommendations are actually fairly orthodox and reflect a continuation of themes that have evolved on a slow but steady basis for the last three or four administrations. Cloud migration, application modernization, security assessments, and more, are all core to the report. In addition, it lays out a set of time-bounded requirements for agency action on virtually every element.

The rub, of course, comes in execution. For while the White House goal is to accelerate progress, recent history suggests that it will take a lot more than a report or White House leadership to do so. It requires a realistic assessment of why progress has not been faster, why cloud migration—more than a half dozen years since the advent of the “cloud first” policy—remains a work in progress, and what human capital, process and policy changes are essential to success. In other words, this is not just a challenge for the government technology community.

Take the council’s directive that agencies submit extensive cloud migration plans to OMB within just a few months. Continuing to press the cloud button makes eminent sense; but what is the administration doing to overcome the challenges the cloud first policy has faced since its inception? Similarly, application modernization is a crucial component of the initiative; but on some levels, the required security layers and processes are growing so thick that they are retarding the government’s ability to quickly and smartly access the wide array of applications that so clearly meet the government’s needs.In addition, the council is very clear in its recognition that reforms to the federal acquisition system are needed. To achieve that, it recommends the creation of virtual “corner stores” for cloud services. That may be a great idea, but simply adding another option outside of the traditional acquisition process doesn’t address the underlying issues. Special authorities are great; but they only drive real change when they are normalized.

Indeed, beyond the headlines, there are many good ideas for modernizing the current processes in ways that are essential to modernizing government technology.

Take acquisition, for example. Some of those ideas were outlined by Deloitte’s Dan Helfrich in a recent speech to the National Contract Management Association. Among his recommendations was that the government dramatically open its aperture when it comes to personnel requirements and get away from resume checking. Not a new issue to be sure; but despite previous efforts at reform, personnel requirements remain overly specific and rigid, and are often out of step with the dynamics of the technology workforce. And it goes without saying that absent a smart, contemporary approach to human capital, any hope of effectively modernizing government technology will diminish substantially. As Helfrich pointed out, even Mark Zuckerberg probably wouldn’t qualify to be on many government technology contracts.

Helfrich also urged the government to more broadly adopt a “show me, don’t tell me” approach to acquisition; get rid of the reams of paper and replace them with real capability demonstrations. Again, not an entirely new idea but one that remains far too infrequently exploited. Ironically, some government colleagues have told me that this is one of the practices they so admire about Silicon Valley innovators. Well, guess what? There are a lot of innovative “traditional” companies that would greatly prefer this approach; just ask them.

In short, the American Technology Council roadmap for modernization is on the right track. That it is a track that for the most part expands that which has been done in the past is a good thing. But as is always true with such initiatives, it is essential to get past the “what” and more fully address the “how.” And that requires multi-functional and multi-sector collaboration that itself has been a challenge over the years. Yet that’s where real progress will be made.

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Why Innovation Programs Should Target Middle-Aged Bureaucrats

Stan Soloway — Fri, 07 Jul 2017 15:09:01 -0400

Imagine the benefits of these things: An earlier test for autism that could improve the ability to treat it. A new procedure to treat atrial fibrillation that holds hope for reducing the risk of strokes. A test for attention deficit hyperactivity disorder that, by focusing on biomarkers could enable more accurate and scaled diagnoses and treatments. These are just a few of the hundreds of innovations that competed in the Merage Institute’s fourth annual innovation competition in Tel Aviv last month, at which I was privileged to be a speaker and judge.

There were specific criteria competitors had to meet to ensure that their innovation would merit the $100,000 prize. But one requirement stood out: Competitors had be over 45 years old.

I, for one, thought that was a brilliant idea, which is one of the reasons I was so delighted to participate. And not just because 45 is for me well in the past. The competition highlighted a growing issue that those of us who believe the government must move aggressively into the digital age need to think about. That is that the demographic divide in government could create serious barriers to major change.

For example, at ACT-IAC’s Executive Leadership Conference last Fall, I participated in a “debate” that was advertised as pitting the “edgy” vs. the “experienced.” Only after some of us raised a concern that the very title implied that those of a certain age could no longer be “edgy” (i.e., innovative) did the organizers change the description to the “edgy” vs. the “edgy plus.” But the implication was clear. Innovation is largely the purview of the young.

I first started thinking about this phenomenon a few years ago after reading “Silicon Valley’s Youth Problem” in the New York Times Magazine by Yiren Liu, a then-28 year old technologist. She described a world in which her friends and peers were demonstrating the genius and vision to create innumerable disruptive new applications, yet were building them on top of technologies that were by and large emanating from large, established technology companies that her peers viewed as “old news” and wouldn’t consider working for. It’s a contemporary version of the old 1960’s adage “never trust anyone over 30.”

By many measures, the perception of innovation being mostly the purview of the young has always been true. Indeed, there is no doubt that the older we get the less we are inclined to change. Nor is there is any doubt that we are witnessing today the rise of a generation of extraordinary creators and innovators who are challenging our preconceived notions and models in new and ever more powerful ways.

However, that it is only part of the story. Data show that the average age of the most successful innovators—those who have transformed an innovative idea into a sustainable and impactful product or solution—is somewhere in the mid-40s. In its 2015 annual report on global technology, a major technology company said that more innovation than ever was being driven by customer demand, especially from large established manufacturing concerns, rather than by what some have termed the “Steve Jobs theory”; that is, customers don’t know what they want until Apple shows them. As just one example, one of my firm’s clients is a later stage start up with a potentially game changing supply chain solution—originally invented by and for a large, global manufacturer before being spun out as an independent company. In other words, in the commercial sector, there are signs that the perception and reality are beginning to change.

In government, that’s not necessarily the case. There are plenty of signs that it remains an enormous challenge and barrier to real change. Some procurements, particularly where agile software development is a core requirement, have been structured and executed in a way that would limit competition on some technology contracts solely to non-IT Schedule 70 holders, for example.

Whether Moore’s Law is about to expire or not, we live in a time when virtually everything we do is subject to immediate and dramatic change. Thus, while the pace of change has been historically fast since the dawn of the computer age, the continual emergence of new and disruptive technology applications has radically increased that pace such that the government could fall further behind, faster than ever. That puts an especially high premium on strategies that enable the government to move quickly and change smartly.

Unfortunately, I continue to hear from many colleagues inside and outside government that key workforce cohorts—particularly those in their peak career years—feel largely disconnected from the change and innovation movement. Correctly or not, they are rarely seen or tapped as sources of new thinking.

To date, much of the most innovative work in government has centered on improving the experiences of citizens and customers when they interact with government. That is both valuable and important. But as the shift in the commercial sector shows, the greatest potential for improving government’s performance and saving taxpayer money rests with the transformation of core business processes and operations. Improving customer service and user experience is crucial, but the extent of improvement is constrained by the extent to which the underlying processes can also be transformed. Achieving that end will require agencies to draw on the expertise of their most knowledgeable employees. Without that expertise, success will be incredibly hard to achieve.

There are many strategies for tapping this expertise, but few, if any, are widely evident in government today. We could, for example, take a hard look at how the procurement process incentivizes (or doesn’t) companies to bring innovative ideas to the table. We could more widely adopt non-traditional procurement rules under which some entities now operate, such as the Defense Innovation Unit/Experimental. And, as many companies are now doing, we could move away from special innovation cells or outposts, which by definition create an unhealthy dynamic, and instead build innovation processes into daily operations.

This brings me back to the Merage Institute competition. The Institute recognized several years ago that this demographic divide was impacting even one of the most innovative nations in the world. They launched the competition to both highlight that phenomenon and begin to address it. They recognized that intentionally democratizing transformation and innovation is ultimately essential to success. We would do well to recognize that as well.

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Congress is Sending Mixed Messages on Defense Procurement

Stan Soloway — Fri, 26 May 2017 11:10:33 -0400

Think Bold. That’s the slogan of the so-called "Section 809 Panel," a special commission created by Congress to review the full spate of federal (and defense-unique) acquisition laws, rules and practices. The goal is to provide lawmakers with a set of recommendations for legislative or administrative redress that will help improve the speed and performance of the defense acquisition system and open its aperture to the full array of available capabilities.

At a recent but little noticed hearing before the House Armed Services Committee, panel chair Deirdre Lee and several of her fellow panelists made eminently clear the need for substantial change, stating outright that the current acquisition system is simply incapable of getting the job done. The pace and scope of technological developments, the changing nature of the requisite workforce, the dramatic shift in technology ownership and leadership, and the numerous regulatory and policy requirements that too often wall the government off from needed solutions were among the reasons the panelists were so unanimous in their belief that truly bold action is required. And that’s exactly what they promised their final report would deliver.

Sound familiar? It should. The landscape is littered with the remains of scores of similar efforts conducted over the last 30 or more years. Some, like the Federal Acquisition Streamlining Act and the Clinger-Cohen Act of the 1990s were highly impactful and led to major reforms to the system. Others made positive differences but generally in limited ways, while too many others ultimately changed very little. Moreover, as the panel members pointed out at the hearing, even some of the most significant reforms of the past have since been diluted by a seemingly endless set of new regulations and limitations.

It is that checkered history that has caused more than a few, myself included, to view the panel with a supportive but nonetheless skeptical eye. Would they really step out in ways we haven't seen in the last 20 years? Based on their testimonies, as well as the tenor of the two meetings I have been privileged to have with them, the indications are that bold could indeed be the theme of their final report. And that's good news. Because the times definitely demand bold thinking. In fact, the title of a new report from my friend and former colleague Jeff Bialos, et al, says it all: "Driving Defense Innovation in a Change Resistant Ecosystem."

Ironically, that message is not at the core of the Armed Services Committee's acquisition "reform" agenda for this year. Chairman Mac Thornberry, who has been a strong advocate for reform and has over the years demonstrated a real understanding of the counterproductive ways in which the government has distanced itself from so much innovation, has now released his proposed acquisition reform provisions for the 2018 defense authorization bill. And they are, I hate to say, anything but bold. Overall they reflect a fairly traditional set of proposals with only limited focus on the changing paradigms that surround and beset the government. Many of them, in fact, focus principally on increasing accountability in acquisition, which, while a core responsibility of the acquisition system, pales in importance to the need for thinking and acting very differently, for fostering an environment and set of processes that reflect the very different marketplace of today that the 809 Panel so crisply defined in its testimony.

Of course, it could be that Chairman Thornberry is simply waiting for the 809 Panel's final recommendations (due next year) before stepping out too aggressively. But in the meantime, messages do matter; and legislative proposals are often seen as sending strong messages. At a time when a new administration, particularly one that has dipped its toes in the acquisition waters in what many might call questionable ways, is still developing its management and acquisition agenda, those messages matter even more. What we really need today is a single, very simple message: Think Bold.

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