As we head into 2008, federal acquisition faces a long list of
challenges;
three of the most pressing are the workforce, oversight, and
performance-
based acquisition.
Workforce
The key challenge for federal acquisition is rebuilding the
workforce to
give it the right size and right skills.There simply are not enough
people to
do the work, which greatly increased in volume and complexity at
the same
time that the workforce was slightly declining (Figure 1). Some of
those remaining
in the workforce lack the skills to handle
task order awards, much less the award of
original contracts to support major programs.
As veteran practitioners have left the workforce,
the federal government has lost their
knowledge and experience, as well as their
availability as mentors for the next generation.
The acquisition workforce of the 1970s and
1980s featured supervisors who reviewed their
employees work, coached them to improve,
and helped them work through challenges.
That is much less prevalent today.Today, supervisors
themselves carry crushing workloads and
have little time to mentor junior staff members.
The little training available is too often of the
check-the-box type rather than effective, situational,
just-in-time training likely to produce
better resultsand more competent people.
What is the right size for the workforce?We can calculate
cost-to-spend
and other ratios and conduct a comparative analysis for the
contracting component
of the acquisition workforce. Such analysis renders statistical
indicators
for workforce size, but we must consider other factors before
deciding for a
particular agency (see box).Hiring more people doesnt help if we
drop them
into a toxic environment, one that stifles innovation and
kills enthusiasm. Managers too often throw their newly
hired, perhaps even freshly trained, recruits into this type
of environment and then quickly lose the benefit of their
investment.Turnover is costly, as mentioned previously.A
toxic environment has the following
characteristics:
Lack of leadership. No one at
the top understands the importance
of acquisition,
which now accounts for
anywhere from 40 percent
to as much as 90 percent of
agency discretionary budgets.
No one inspires the
staff to make a difference.
Shared values are not communicated. No positive
culture is identifiable: those from outside view the
acquisition organization as an obstacle rather than
a partner.Acquisition managers dont demonstrate
any strategic thinking or behavior modeling that
makes program and financial managers in the
agency want to give them any influence.
No strategic linkage. The staff has no widely shared
understanding of the relation of their jobs to mission
accomplishment.A grand plan for sourcing
strategically to meet customer requirements is
lacking; the focus is on completing individual
transactions. Individual performance plans are not
linked with the success (not just the award) of
major contracts and programs.
No culture for capturing and sharing knowledge.
Communities of practice and technologies to support
knowledge capture, sharing, and reuse are absent,
as are robust, up-to-date policies and procedures
in a centralized and easily accessibleideally,
electroniclocation for all to use. Everyone is on
his or her own. Not only do employees not have
experienced supervisors to coach and mentor
them, they dont have policies and procedures to
consult for consistent guidance in producing highquality
work.
Acquisition managers certainly dont want to foster
toxic environments for their staffs, but many do not have
the time or resources to assess their organizations,much
less address the problems.
Oversight
A second key challenge is the appropriate extent and
intent of oversight (of the management kind, as opposed
to criminal detection), which is certainly necessary, but
the extent must be tempered.Oversight was mild in the
1970s, severe in the 1980s,very mild in the 1990s, and oppressive
in the current decade.
When the overseers outnumber
the doers by about 5:1 (as in the
Federal Emergency Management
Agency), they can contribute to the
problem rather than the solution.A
workforce already stretched to the
mistake-prone limit is overburdened
responding to oversight demands
especially when providing
documents to two, three, or even
four oversight entities concurrently, or worse, in a row.
Oversight has to feature common sense and balance.
The intent should be insight rather than merely
oversight. Figure 2 outlines a transition that could be
constructive for acquisition improvements.However, two
factors are converging to intensify acquisition oversight
in the next year or so: current movement in that direction
and the pending elections, which tend to generate
greater scrutiny of incumbent practices of all kinds.
Performance-Based Acquisition
The third key acquisition challenge is full implementation
of results-based acquisition, often referred to
as performance-based acquisition (PBA). Congress, the
Government Accountability Office (GAO), the Department of Defense,
and the Office of Federal Procurement
Policy remain committed to PBA. However, although
agencies report they are doing PBA, many of the reported
awards are not PBA.The Acquisition Advisory
Panel (AAP) confirmed the findings of previous studies
that many contracts are incorrectly reported as PBA:
[Federal Procurement Data System] FPDS data are insufficient
and perhaps misleading regarding use and success
of PBA. The AAPs survey of 55 contracts and
orders reported as PBA found that only 36 percent reflected
all the PBA attributes, 22 percent were questionable,
and an astonishing 42 percent were not PBA at all.
Many observations (including those of Acquisition
Solutions, Inc.) of government solicitations confirm that
agencies do not have a good understanding of performance-
based contracting and how to take full advantage
of it. Many contracts awarded using PBA methods are
not managed as PBA.To be effective, PBA methods
such as managing by relationship, selecting the meaningful
and vital few performance measures (versus the
trivial many), and monitoring the metricsmust be followed
after award.When contracts fail, we have to look
at the causes of the problems and stop attacking the
symptoms.
The AAPs findings on PBA indicate that establishing
good performance measures is one of the more difficult
aspects of conducting a PBA.Our experience bears
this out. Our clients, including those who fervently believe
in PBA, tell us that they dont know how to articulate
outcomes, nor do they know how to measure results
other than for compliance with specific requirements.
Leading PBA Practices
Establishing optimal performance measures and
metrics is just part of the challenge of PBA. PBAs, especially
transformational PBAs, should be led by a team of
program and contracting personnel that employs these
leading practices:
Ensuring strategic alignment with agency goals
and stakeholder needs
Developing change management strategies to address
the cultural transformation that is essential
for successful PBA
Developing communications strategies for continually
communicating with stakeholders, including
industry
Conducting one-on-one market research with industry
leaders
Publicizing the agency budget (not the independent
government estimate) for the project for
scope and solution realism
Articulating requirements in terms of objectives
and desired outcomes
Providing meaningful due diligence opportunity
for down-selected vendors to fully understand the
environment and constraints under which their solution
needs to be successful (due diligence is necessary
for preparing realistic proposals)
Establishing the few (rather than many) meaningful
performance measures and metrics
Having governance mechanisms in place prior to
contract award
Managing for outcomes according to the performance
measures and metrics, rather than compliance
with detailed specifications.
Compliance or Results
PBA is hard, complicated acquisition, as show by its
definition:
(1) Describe the requirements in terms of results required
rather than the methods of performance of the
work; (2) Use measurable performance standards (i.e.,
terms of quality, timeliness, quantity, etc.) and quality assurance
surveillance plans (see 46.103(a) and 46.401(a));
(3) Specify procedures for reductions of fee or for reductions
to the price of a fixed-price contract when services
are not performed or do not meet contract requirements
(see 46.407); and (4) Include performance incentives
where appropriate.
For FPDS reporting purposes, a minimum of 80
percent of the anticipated obligations under the procurement
action must meet the above requirements.
Not enough acquisition organizations have the capacity
or skills to conduct and manage an acquisition for
results. Its so much easier to administer a contract for
compliance.Therefore, behaviors slip into compliance
trackingsuch as whether reports were delivered or the
contractor complied with specificationsrather than
monitoring and measuring for resultssuch as whether
objectives were met and goals achieved.
This brings us full circle to the sophistication of the
larger government acquisition workforce (the one engaged
from requirements identification through completion
of performance).Why is it that we spend billions
of dollars on programs, pour in millions more to save
troubled contracts and programs, but dont invest in theworkforce
resources necessary to get the job done right
in the first place?
Our clients tell us that when they follow performance-
based methods, they get a better result.They get
a much faster award than when developing detailed requirements
and specifications, and they get better performance
when they have the right measures and
metrics.When they get off track,usually because of some
external force such as program budget cuts or significant
leadership turnover, the wheels fall off the wagon. In
other words, PBA works when its methods are followed
from pre-award planning through post-award performance.
But all too often, behaviors revert after award.
Solutions
The way forward requires experienced leaders inside
the system, in both the executive and legislative
branches, who understand acquisition and have the capacity
to lead.
Appropriators should address the resource needs of
the acquisition workforce. Senators Susan Collins and
Joseph Liebermans S. 680, the Accountability in Government
Contracting Act, will help if enacted. More is
needed, such as training funds and a government-industry
exchange program for acquisition, as antithetical as
that may seem in this era of heightened conflict-ofinterest
concerns. Although a government-industry acquisition
exchange program with proper safeguards can
be devised and would benefit the government as much
if not more than industry, its an idea not likely to come
to fruition at this timebut its one that should some
day be realized.
Overseers should strike a better balance between
oversight and mission needs, striving for constructive insight
that will help agency managers improve acquisition
operations. Nonetheless, agency managers should
prepare for increased scrutiny by conducting their own
assessments using the GAO Framework forAssessingAcquisition
Organizations. In fact, they should go a step
further and ask their overseers for help in planning their
self-assessments and then document their improvements.
Agency managers should consider their overall environment
before determining staff size and investing in
new hires.They should invest in the workforce, not just
with check-the-box training but with organizational improvements
that address the need for learning and
growth, inspire innovation and achievement, and provide
guidance and tools such as effective training tied to performance.
The future of PBA depends on following the practices
and modeling the behaviors that produce results,
from planning through final performancenot just to
award.
Summary
The acquisition workforce will be gradually rebuilt,
but to optimize that workforce, acquisition leaders must
establish an organization strategically aligned with the
direction of the agency and an environment that fosters
learning, innovation, and creativity.Acquisition oversight
will intensify over the next year or two, but acquisition
leaders can prepare by conducting their own assessments
and embarking on improvements in anticipation of external
reviews.
The benefits of PBA have not yet been fully realized
because many challenges with implementation remain,
notably the lack of understanding of what PBA
really is and the dearth of skills to articulate and measure
outcomes.We must go beyond the symptoms to find
the reasons for current acquisition failures.Commitment
to PBA will continue because the methods work when
fully employed.