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MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
In addition to managing your own workforce, you will be responsible for managing a large contingent of contractors. You will need to ensure that contractor performance is high and that contractors are meeting and hopefully exceeding your agency’s expectations, as set forth in your contracts.
Government today depends greatly on contractors, stemming from several factors: limits on the number of government employees, a difficult process to hire government workers, and the need for government to frequently ramp up quickly to solve immediate problems. Given this history, you will likely find that your agency now has a large contingent of contractors working to support your agency’s operations and mission. As a consequence, you will face a series of challenges.
Align Contracting Practices with Your Agency Goals and Objectives
For the past decade, agencies have had little or no overall contracting strategy for the entire organization. Your first step should be to take a strategic look at contracting and align your agency’s use of contracting and contractors to support your agency’s goals and objectives.
An effective and efficient government requires a strong cadre of government workers supported by a strong cadre of contractors, each in an appropriate role. As part of your strategic assessment of your organization, you will have to work to align roles and responsibilities for both your government employees and your government contractors.
Align Contracting with the Appropriate Number of Government Staff
At the same time that government contracts have gotten more complex and the number of contracts and contractors has grown to a very significant level, the number of government employees to manage contractors has continued to decrease. In some cases, this has created poor contract oversight, which has resulted in ineffective and costly contracts.
There is now agreement that government is severely understaffed in the contracting arena. The shortage of contracting specialists is due to the downsizing of those positions in the 1990s and to the increasing rate of retirement of “baby boom” contract specialists. You should devote your personal attention to the unique issues and problems facing the acquisition profession. This will include program experts and contracting professionals.
There are specific actions that you can take to strengthen the acquisition cadre in your organization:
Align Contracting with Industry Best Practices
There is little doubt that government will continue to contract many activities in the future and will continue to work closely with contractors and their staffs. Because of this, you must align your contracting activities with industry best practices. The work of government contractors has substantially changed in recent years, as well as the relationship between government and contractors. These changes are, in part, responsible for some of the recent challenges. Government and contractors are moving into new terrain, and both will need to learn how to deal with changing expectations and new relationships.
In recent years, three major shifts have occurred in the government contracting arena. Shifts one and two are clearly related. The “buying” of services (shift one) will require a new partnership relationship (shift two). Shift three reflects technology as an enabler to provide faster, more cost-effective services.
Leverage Alternatives to Traditional Contracting
Over the past four years, the Obama Administration has introduced the concept of “prizes” and “challenges” into the Federal lexicon. As noted on www.challenge.gov, agencies can use challenges to ask third parties “to identify a solution to a particular problem or reward contestants for accomplishing a particular goal. Prizes often accompany challenges and contests. Challenges can range from fairly simple (idea suggestions, creation of logos, videos, digital games and mobile applications) to proofs of concept, designs, or finished products that solve the grand challenges of the 21st century.” You can look to challenges and prizes as another means of leveraging the private sector to get things done quickly and effectively.
Align Your Expectations with Contracting Realities
Finally, it will be crucial for you to align your expectations in this area. While all the areas discussed in this book will be challenging, contracting presents special challenges. Specifically, challenges include:
Relevant reports from the IBM Center since 2008:
Challenge.gov: Using Competitions and Awards to Spur Innovation by Kevin C. Desouza (2012)
Kevin C. Desouza’s “Challenge.gov: Using Competitions and Awards to Spur Innovation,” examines the cross-government electronic platform, Challenge.gov, through which agencies can pose problems and challenge the public to provide solutions.
Improving Government Contracting: Lessons from Bid Protests of Department of Defense Source Selections by Steven M. Maser (2012)
Bid protests and source selection processes have received increasd attention in the past few years: a recent GAO study reported a government-wide increase in the number of protests by government contractors.
Professor Maser’s conducted in-depth interviews with members of the acquisition community, and analyzed bid protests submitted to the Government Accountability Office (GAO) involving Department of Defense (DoD) agencies between 2001 and 2009. His work yields nine findings with recommendations for changes that can improve the source selection process.
Contracted Versus Internal Assembly for Complex Products: From Deepwater to the Acquisition Directorate in the U.S. Coast Guard by Trevor L Brown, Matthew Potoski, and David M Van Slyke (2010)
This report focuses on providing lessons learned from the transition and offers three recommendations for contract management staff, agency executives, and congressional and executive-level policy makers. A key argument is that the federal government will need to enhance its contracting capabilities (including the number of personnel working on acquisition) to manage the “assembly” of complex products.
In the case of the U. S. Coast Guard, the last several years have been spent on enhancing both the capability and the size of CG-9, the Coast Guard Acquisition Directorate. One lesson from the Coast Guard experience is that federal agencies cannot easily turn the “switch” overnight from an external LSI to moving the LSI role in-house.
The Challenge of Contracting for Large Complex Projects: A Case Study of the Coast Guard's Deepwater Program by Trevor L Brown, Matthew Potoski, and David M Van Slyke (2008)
When the government buys simple products, like paper clips, they can turn to well-established acquisition strategies and practices and apply them to richly competitive markets. When government agencies buy complex products, like weapon systems, conventional acquisition approaches are often insufficient and markets are more challenging.
This report examines contracting for complex products by reviewing the U.S. Coast Guard's experience with its Deepwater Program. The Deepwater Program was a major "system of systems" acquisition to upgrade and integrate the Coast Guard's sea and air assets (such as boats and airplanes). Based on their analysis of the Coast Guard experience, the authors offer lessons for the future as the government continues to face the challenge of acquiring complex products.
Six Practical Steps to Improve Contracting by Allan V Burman, Ph.D. (2009)
With the passage of the Stimulus Bill, having an effective federal contracting function will be critical to the success of the Bill. While many observers see the current federal contracting system as broken, the seminar participants identified a series of practical steps that can be taken now to begin to fix it.
Read our other Operator's Manual Blog,an update of Chapter One: Leadership.
Read our update of Chapter Two: Performance.
Read our update of Chapter Four: Money.
Read our update of Chapter Six: Technology.
Read our update of Chapter Seven: Innovation.
Read our update of Chapter Eight: Collaboration.
Read the original chapters of the Operator's Manual.
Read materials related to Governing in the Next Four Years.