Getting It Right

As agencies ramp up new initiatives, they must ask the critical contracting questions.

No matter what the nation's challenges are, the public expects government to work. In addition to carrying out its many existing programs, the stimulus bill and the financial bailout have added new promises the executive branch must deliver on. All the more reason the new administration must find the appropriate balance between the civil service and contractors to get the job done right.

Early indications are the Obama administration is leaning toward hiring more civil servants to carry out many of its new initiatives. But there is little doubt that government will continue to rely on contractors. The choice between civil servants and contractors is critical in deciding how best to deliver services to the public.

To determine where more civil servants are needed, the administration must decide which agencies need more boots on the ground, which positions are understaffed, and whether to hire employees on a full-time, part-time, temporary or term basis.

If agencies are considering hiring contractors, here are some questions they should ask:

  • Do we have a temporary or a long-term need? Is an agency facing a short-term backlog problem, such as processing benefit claims, or does it have a need for ongoing support in back-office functions such as finance, personnel or call centers. If so, then contractor support is the most accessible source of people power. If the need is long-term, then the agency has to decide whether this is a core government function that needs to be supplied by civil servants, or whether it is a noncore competency in which long-term contractor support is most appropriate.
  • Which type of contract is most appropriate for our specific need? The Obama administration has made clear its preference for fixed-price contracts, in which an agency and a vendor agree to a price up front for the service to be delivered. But agencies also should consider performance-based contracts, which provide the contractor bonuses for meeting specified milestones, making them more accountable for the quality of their work.
  • How long should the contract term be, and what type of management structure is needed? There has been a trend toward longer-term contracts with options to renew, which are appropriate when government has a continuing need for functions such as back-office support. These contracts can include several companies or multiple agreements, which must be coordinated. In these cases, a lead systems integrator might be needed to manage the contract. That role can be performed either by an agency or by a contractor.
  • Do we have enough well-trained staff to manage or oversee the contract? Agencies must determine the adequacy of their contracting staff. Many contract problems can be traced to poor federal oversight. Years of downsizing have depleted the acquisition workforce, prompting calls to hire more procurement officers and provide them the training they need.

Time is of the essence as agencies scramble to deliver on new initiatives. While the Obama administration is committed to hiring more civil servants to accomplish its goals, contractors will continue to play a formidable role. But ensuring quality services will require smarter contracting techniques and a larger, more skilled, acquisition workforce.

Mark A. Abramson is president of Leadership Inc. He has served as executive director of the IBM Center for the Business of Government and as president of the Council for Excellence in Government. His e-mail is

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