A handbook on acquisition reforms
No one can blame the policy wonks in the Obama administration for not diving into the weeds of acquisition policy just yet.
In the past eight months, top officials have been dealing with
the economic meltdown and have spent what little time they’ve had left
over on a handful of high-profile, high-impact issues: workforce
development, cost-plus contracting and insourcing, the idea of bringing
contracted work back into the government fold.
But the economy will settle down eventually, and administration
officials will then turn their attention to the more mundane aspects of
running the government and spending billions of dollars each year on
technology. When that happens, they will confront a number of issues
Experts say President Barack Obama’s acquisition team needs to
get up-to-speed on three topics in particular: the General Services
Administration’s schedule contracts, interagency contracting and
small-business set-aside contracts.
Those issues are not likely to make headlines or generate much
buzz in the blogosphere. Nonetheless, those types of contracts account
for much of the money that agencies spend on information technology.
Poorly defined rules in those three areas could lead to wasted money
and even legal problems in the case of interagency agreements.
Federal Computer Week asked three acquisition specialists to
make some recommendations for the Obama administration in those areas.
was assistant acquisition commissioner at the General Services
Administration and is now president and chief executive officer of the
Washington Management Group and FedSources. In his briefing for the
Obama administration, Gormley busts some myths about GSA’s
multiple-award schedules program.
was deputy administrator of the Office of Federal Procurement Policy
and is now a partner at Venable law firm. He offers recommendations for
tackling interagency agreements.
is co-founder and chief visionary officer at the American Small
Business Coalition. He gives the administration some insight into how
small government contractors operate.
BY Bill Gormley
This administration, more than any other in recent history, has
highlighted the need for change, transparency, competition and
strategic sourcing in government contracting. Those are key tenets of
the General Services Administration’s multiple-award schedules program,
which offers millions of commercial services and products through
18,000 contracts. Yet, an increasing number of myths have been used to
support duplicate contracting, which costs taxpayer dollars that could
be used more effectively toward agency missions.
Let’s start by debunking some high-profile myths about the GSA schedules program.
Myth: Indefinite-delivery, indefinite-quantity contracts are better vehicles than the schedules.
Fact: The schedules program has evolved to the point that many other commercial-item contract vehicles are redundant.
There was a time when acquisition professionals needed a broader
range of contract options, which served as the catalyst for the
creation of agencies’ many IDIQs, governmentwide acquisition contracts
and multiple-award contracts.
GSA is not meant to be the government’s sole purchaser. But for
commercial services and products, the schedules program can meet
government needs. Today, it has evolved so that many GWACs,
multiple-award contracts and IDIQs are simply redundant.
Myth: Government agencies can get better deals and prices by not using the schedules.
Fact: GSA schedules reduce
acquisition costs for federal agencies and provide a platform for
lowering the price and increasing the value of the services and
One of the schedules program’s primary objectives is to do the
acquisition legwork in advance — vetting vendors, finding the best
prices, etc. GSA completes 80 percent of the acquisition process for
federal agencies. The contracts are already signed, and the services
and products are already available. Agencies can buy what they need
rather than worry about going through the process of establishing
contracts in accordance with myriad acquisition rules. GSA eliminates a
significant part of the cost of acquisition for federal agencies.
And within the program, there is a built-in provision for price
reductions and volume discounting. Contractors offer voluntary price
reductions, and customer agencies are encouraged to seek price
reductions based on their particular requirements. It is simply not
true that you can automatically get better prices elsewhere.
Myth: GSA does not offer the latest solutions, services or products through the schedules program.
Fact: Schedule contracts are continuously refreshed to provide new technology and commercially available services and solutions.
Vendors can add new services and products or delete old ones at any
time. Vendors can also upgrade their solutions, services or products
any time — and that is exactly what they do.
It’s in a vendor’s best interest to be able to offer the latest
technology and services and stay up-to-date and competitive for what
might be its largest customer. The government reaps the benefit by
having access to the newest services and technologies, and it is not
locked into a particular level of service or product offering.
Myth: Government agencies will not get credit for socioeconomic goals if they buy through the GSA schedules program.
Fact: Small Business Administration
policy allows agencies to get credit for the dollar value of orders
placed against schedules contracts.
I know no other way to dispel this myth than to simply say that it’s
not true. Agencies do, in fact, get socioeconomic credit when ordering
from small businesses. Agencies can even search within the schedules
program for those companies. Few things could be easier than meeting
those requirements through the schedules, which is why more than 30
percent of sales go to small businesses.
Interagency agreements: Guiding agencies and modeling their agreements
BY Robert Burton
Interagency acquisitions offer one solution to the severe shortage
of acquisition personnel by allowing agencies to use contract vehicles
established and managed by other agencies. Those contracts also ensure
the success of the government’s strategic sourcing initiative because
they capitalize on the government’s enormous buying power. The
challenge for the government is effectively managing those high-profile
Congress recognized the importance of interagency contracts in the
fiscal 2009 National Defense Authorization Act by directing the Office
of Management and Budget to issue guidelines to assist agencies in
improving their management of such contracts. Ironically, just a few
months before the legislation was passed, the Office of Federal
Procurement Policy issued guidance for that purpose in a 66-page
Here are a few recommendations for improving the management of
interagency acquisitions, based in large part on the guidance OFPP
1. Codify OFPP’s guidance in the Federal Acquisition Regulation.
OFPP developed its guidance in response to a Government
Accountability Office report that criticized the government’s
management of interagency acquisitions. GAO was especially concerned by
the lack of clear lines of responsibility between agencies with
requirements (requesting agencies) and agencies that award contracts on
their behalf (servicing agencies).
The OFPP guidance defines the roles and responsibilities of both
types of agencies and, more importantly, helps agencies make sound
business decisions to support their use of interagency acquisitions.
Therefore, the Obama administration should ensure that the best
practices outlined in OFPP’s guidance are institutionalized in the FAR.
2. Modify existing interagency agreements in accordance with OFPP’s guidance.
The guidance includes a model interagency agreement for agencies to
use when entering into an arrangement for an assisted acquisition. In
the process of developing that agreement, OFPP found that some existing
interagency agreements contain weak contract management and financial
However, OFPP’s document merely asks agencies to consider modifying
existing agreements in accordance with the guidance. OFPP should have
gone further and required agencies to modify their existing agreements
to incorporate the sound contracting and fiscal practices outlined in
the model agreement.
3. Require the use of the model interagency agreement for all future assisted acquisitions.
The agreement is perhaps the most valuable aspect of the lengthy
OFPP guidance document because it provides agencies with a road map to
achieve the greatest value possible from assisted acquisitions. The
agreement was fully vetted with agency chief acquisition officers,
senior procurement executives, chief financial officers, chief
information officers and GAO. Therefore, it seems appropriate for
agencies to use the model agreement to ensure consistency and
reliability in assisted acquisitions.
Although the guidance requires agencies to use the elements of the
model agreement, it might be time to require the uniform use of the
agreement by all federal agencies.
4. Require strong business cases for multiagency contracts and link them to the Federal Strategic Sourcing Initiative.
There are more than 50 multiagency contracts (MACs) available for
assisted acquisitions, which does not include the governmentwide
acquisition contracts managed by the General Services Administration,
NASA and the National Institutes of Health. Some MACs are duplicative
in scope and not supported by strong business cases.
At a minimum, the Obama administration should ensure that the MACs
are supported by strong business cases that support the goals of the
Federal Strategic Sourcing Initiative by taking full advantage of the
government’s buying power.
5. Develop and institutionalize a governance structure for MACs.
A top priority for the Obama administration should be to develop and
institutionalize a governance structure for creating and renewing MACs.
That structure should include a business case review process similar to
the one used for GWACs. Under the Clinger-Cohen Act, OFPP is required
to review the business case for each GWAC and designate a lead agency
to manage the contract.
Although OFPP’s small staff cannot review business cases for all
MACs, a review board consisting of a select group of agency
representatives could operate under the direction of the Chief
Acquisition Officers Council for that purpose, which would go a long
way to improving interagency acquisitions.
Small business: Connecting with strong partners
BY Guy Timberlake
On behalf of the members of the American Small Business Coalition,
who are small and disadvantaged businesses, we extend a sincere and
warm welcome to the appointed officials of the Obama administration.
As members of an industry organization focused on facilitating the
development of domain-specific relationships and knowledge to
government and industry, we respectfully offer the following tips about
capitalizing on the portion of your industrial base that represents the
backbone of the U.S. economy and stands ready to serve as a quick
reaction force for you, in addition to its normal duties.
• Value us.
The level of talent and commitment to excellence in this community
of small and disadvantaged businesses is tremendous. Most are more than
willing to commit the same blood, sweat and tears to any task you
assign that they do to pursuing their goals to support employees,
families and communities.
“Small and disadvantaged” does not mean “seeking handouts” and does
not imply helplessness or a diminished dedication to serving you well.
• Take advantage of the available resources.
There are many facilitation resources, such as industry
associations, that can help the government conduct expeditionary-based
identification and vetting of companies, products, services and
solutions to support the needs of internal customer organizations.
• Communicate with us.
Industry in general and especially small businesses feel and share
your pain. There are many ways to communicate with your industry
partners that result in a win-win situation for those looking to
achieve a common goal. All too often, the relationship is adversarial,
which hinders success. Like you, we are committed to the continuation
and growth of our economy, availability of citizen services, security
of our homeland, and ability to defend the United States and our
interests as necessary.
• Recognize that we’re here to help.
The companies you want to do business with are not focused on
getting work because they fit into a specific socioeconomic profile.
Hire small companies because you are convinced they have the capacity
and requisite expertise to get the job done. Take advantage of
contracting methods that suit your needs but do not simultaneously
create barriers that hinder you from reaching a viable solution. In our
opinion, most small businesses in the government sector are here for
the right reasons and are focused on innovation, problem-solving and
quality in exchange for fair rates.
• Understand us.
The segment of U.S. owned/controlled small and disadvantaged
companies represents a cross-section of the United States at every
level. We are citizens willing to put in an honest day’s work, and we
constantly strive to better ourselves and our offerings to provide for
those who depend on us. Although the mission of the government is
always Job One, we ask that you consider the ramifications of some
decisions made during the acquisition cycle. In the past, some of those
actions have resulted in unnecessary burdens beyond the normal risk of
doing business. That only serves to diminish your industrial base and
results in the loss of the next great advance in human capital
management, health care or technology to counter improvised explosive
Just as there is no magic pill or silver bullet to develop success
for small companies, the development of meaningful government/industry
partnerships takes time. Good leadership is the key to achieving the