The Business of Government Hour

 

About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

Angela Styles interview

Friday, April 19th, 2002 - 20:00
Phrase: 
Angela Styles
Radio show date: 
Sat, 04/20/2002
Guest: 
Intro text: 
Contracting...

Contracting

Complete transcript: 

Washington, D.C.

Friday, November 16, 2001

MR.LAWRENCE: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the Endowment by visiting us on the Web at endowment.pwcglobal.com.

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Angela Styles, Administrator for Federal Procurement Policy in the Office of Management and Budget. Good morning, Angela.

MS. STYLES: Good morning.

MR. LAWRENCE: Well, Angela, the Office of Federal Procurement Policy is a mouthful. Could you tell us about its mission and its activities?

MS. STYLES: Certainly. The mission of the Office of Federal Procurement Policy or, as most people call it, OFPP, is to coordinate efforts to improve federal procurement law, policies, and practices which affect all federal and federally assisted purchases of goods, property, and services.

In essence, OFPP is responsible for the policies by which the Executive Branch purchases over $200 billion in goods and services every year. Everything from paper clips to nuclear submarines. For those of your listeners that may be more familiar with federal personnel policies, the role of the Office of Personnel Management, OPM, is very similar to OFPP. OFPP is to federal procurement and contracting what OPM is to federal personnel policy.

And much like OPM, we coordinate the setting of policy for the Executive Branch, but we're not actually doing any buying, that is, we don't award contracts, we leave that to the individual agencies much like OPM doesn't actually hire people except for people at OPM.

The activities of our office are numerous and probably too numerous to list, but I would like to focus on four areas of what we do with our mission: First, I probably spend about 60 percent of my time focusing on Congress and legislative issues. How should the procurement system be run; what role should competition play; and what should be the basic statutory framework for procurement.

OFPP works extensively with the Senate Government Affairs Committee, House Government Reform, Senate Armed Services and House Armed Services in fashioning acquisition-related portions of the defense authorization and other government wide legislation. We also work a great deal with some of the small business committees, the Senate Small Business Committee and the House Small Business Committee.

And aside from the legislative area, which I spend a great deal of time in, our second focus and very important to me is OFPP's role in coordinating the Federal Acquisition Regulatory Council, which is responsible for maintaining the Federal Acquisition Regulation. Anybody who has even ventured a little bit into the federal procurement area knows that the FAR is something of The Bible for the contracting community.

Really, the FAR embodies in one regulation all the statutory and policy direction that govern contracting and I serve on the FAR Council with representatives from DOD, GSA, and NASA and we're really the primary procurement policy-making body. And updating the FAR, keeping it current with statutory changes and other things to reflect sound policy is a pretty significant job.

Third, and I think we'll probably talk about this in more detail later, is the responsibility of OFPP for certain portions of the President's management agenda, specifically, competitive sourcing, which is a new area, really, for OFPP in many respects.

And, fourth, I serve as chair of the Cost Accounting Standards Board, which is the regulatory body for setting the accounting rules for how the government makes payments under large federal contracts, primarily with defense contractors. And we're involved in a lot of other areas, as well, but I think those are the big ones.

MR. LAWRENCE: And what's your role as the administrator of Federal Procurement Policy? What do you actually do?

MS. STYLES: It's to provide leadership in the procurement area and to carry out the President's agenda in establishing procurement policy. I think I see myself something as an honest broker, balancing a great deal of competing interest in this area, of which, there really many competing interests, and applying the President's overall goals to achieving results.

The best example I can give you is, really, in the area of competition, which has been hotly debated in the procurement area for a while. Some people think there's too little, some people think there's too much. The President, overall, is really committed to making the government a market-based government, making our departments and agencies market-based and that application applies to procurement in that competition is -- he's really committed to making sure that there's competition in virtually every aspect of government performance.

So, there are a lot of policy debates, I think, between Congress, contractors and among the agencies on how do we increase competition in federal contracts. And I, fundamentally believe that competition is what improves quality, reduces price, and is the key to ensuring hat we're maintaining integrity in how we spend the $200 billion in goods and services.

MR. LAWRENCE: Two key pieces of legislation really changed the landscape of procurement in government: The Federal Acquisition Streamlining Act of 1994 and the Klinger/Cohen Act of '96. What's been their impact on federal procurement?

MS. STYLES: These laws were implemented with some substantial revisions to the Federal Acquisition Regulation and I think, between FASA and Klinger/Cohen, the FAR really underwent some dramatic changes that streamlined and commercialized our acquisition system. Of course, I think the proof is in the pudding, and we have a lot of aspects of those laws to continue to look at, but I think the changes are evident, particularly in light of September 11. The Pentagon had a contract in place for reconstruction on September 14. I don't really think that would have been possible under some of the old methods of contracting, pre-FASA, pre-Klinger/Cohen.

But I also have to tell you that we really have to be concerned about taking a close look at what the effect of these laws have been, what the effect of these laws have been on competition, particularly. There's no question in my mind that prior to these laws, prior to 1994, our procurement system was drowning in paperwork and we brought around much-needed efficiencies in the system. But in the process, we may have left behind some of our fundamental commitments to competition. And that's really what I see my job as, right now, is to making sure that we knew what the goals were; that we achieve the goals; and that we take a close look at what some of the fundamentals -- competition, due process, equitable fair-play for offerers in similarly situated situations.

MR. LAWRENCE: Well, let's spend some time talking about your career. Tell us about your career prior to joining OFPP.

MS. STYLES: I came to D.C. in 1987 as an intern for Congressman Joe Barton; worked on the Hill as a legislative aide for him for a couple of years; worked on some energy and commerce committee issues there. I moved on from there to work at the State Federal Relations for the, then governor of Texas, Bill Clemmence (phonetic), was there for a couple years and returned to Texas after his term expired to go to law school at the University of Texas. And decided I missed D.C. a great deal and came back up after law school; worked first for a Texas-based firm, Baker and Botts (phonetic) for a couple of years in the government law and procurement area on a vast array of issues.

And then I moved to another D.C.-based law firm Miller and Chevalier, and worked there for a number of years, again, on government procurement law issues.

MR. LAWRENCE: You�ve been in both sectors public and private sectors. What drew you to public service?

MS. STYLES: I think it's a fundamental commitment to give back something. You know it's our system of government that has enabled us to do well in the private sector but it's essential for people to come back in and to serve in government, to really bring an influx of private-sector ideas back into the government or, I think, the government becomes distant from the people that it's trying to serve if they're not a group of people that are really committed to being in the private sector but, when the opportunity arises, coming back to public service and bringing the ideas that they had in the private sector to the public sector, we can't move forward. The government just becomes too distant from the people it's trying to serve.

So, I think it's important, even more so in these times and I think it's really a privilege in these times to serve. I know there are a lot of people -- I'm not the only one, but there's a lot of federal employees out there, particularly in the D.C. area that get questions from family and friends about, aren't you worried about going to work every day?

And I think it's a privilege to be able to serve right now. There are a lot of people out there that are putting a lot more on the line than simply coming into work every day in D.C. So, it's really an honor, in these difficult times, to be able to bring some resources, bring some ideas, and to help the government move forward.

MR. LAWRENCE: Which of the positions you described best prepared you for your current job?

MS. STYLES: I think all of them did. I think this job requires a vast array of skills, particularly working with the Hill. Being on the Hill, knowing how it works, having a good number of contacts there helps in this job a great deal. I think you have to know how the system works in order to be able to effectively push legislation through, particularly in the procurement area.

In the legal area, I think my experience means I take a very analytical approach to substantive issues. And that's important, because as the devil is in the detail, oftentimes, in the procurement area. And we have to be very careful about how we choose to regulate people. That's one of my topics that I'll keep bringing up again, is transparency and the need to make sure that people understand that when we choose to regulate, that it's thoughtful, analytical, we know what we're doing and we know what the effect of that is. And I think my legal experience brings that to the job.

MR. LAWRENCE: Why is transparency so important?

MS. STYLES: People have to know why we're doing what we're doing in the government. Certainly, one of my concerns in the acquisition area is that, from the private sector, I saw rules and regulations that came out that would oftentimes say 20 comments were received and they were all considered. Well, fundamental to our system of government is the ability for the public to give us comments about regulations. And to provide information about how they think we would better be able to run the system. And I think transparency, in that aspect, means when people do submit comments that they know that we considered them and that there was an analytical process that we went through in thinking about why we're regulating you and what the effect of that will be on you.

MR. LAWRENCE: Well, this is a good stopping point for a break. Come back as we continue our conversation with Angela Styles, Administrator for Federal Procurement Policy. In the next segment, we'll ask her to explain A-76. If you don't know what it is or how it works, you'll learn when The Business of Government Hour continues. (Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and today's conversation is with Angela Styles, Administrator for Federal Procurement Policy in the Office of Management and Budget.

Well, Angela, you mentioned the President's management agenda, which includes initiatives to link agency performance to budget, improve management, and increase the use of e-government. How does procurement and acquisition relate to these initiatives?

MS. STYLES: I think procurement and acquisition is actually key to all of the initiatives. In particular, I'll talk a little bit about each one of them but, in particular, the human capital initiative -- the human capital, in terms of the acquisition workforce. And it's the acquisition workforce, the program requirements, the program managers, the procurement people that are really essential to making each and every one of these initiatives work.

But let me give you a little background on how we got where we are on the President's management agenda. When I started back at OMB in March of this year, we sat down, the senior staff, both political and career, sat down with all the management issues that have been floating around OMB for years and years whether it was NPR or through other administrations there were hundreds of good proposals on the table -- some good, actually, and some not so good.

But we kind of felt that the problem was that no one had sat down and narrowed down the proposals to ones that were achievable in the short-term and could make some real significant differences in how the government was managed. So we sat down there for a number of days and vetted through the ideas and came up with five government wide initiatives that we thought were mutually coordinated, achievable in the short term, and could make some significant changes in the way the federal government was managed.

I think the President really gave us some direction in saying he didn't want to look back in a year, two years, three years, or four years and see that the federal government was managed the same way that it was when he came in.

So we came up with these five initiatives. And I encourage everyone to actually go and take a look at them. We spent a great deal of time not only vetting them, but also discussing what each one of them meant and how they work together. And it's available in the President's management agenda at OMB.gov.

And we spent a great deal of time explaining each of the initiatives and why each one was important. I'll talk briefly about each of them.

The first one is budget integration, which is the integration of performance with budget decisions. And I think here, you're really seeing the M in OMB or the management side of OMB like you never have before.

Management in these management initiatives is becoming a real part of the budget process. As the director of OMB, Mitch Daniels, goes through the budget review process this fall, management issues have been of primary importance and primary importance in making budget decisions, as well.

This initiative, also, is an attempt to reflect the full costs of many of the programs at different agencies in agency budgets. Many times, I think, somewhat irrational decisions are made because the budget and appropriations process isn't tied to the full cost of some of the programs. So it's very hard for a program manager to be able to make a rational decision one way or the other, because he only sees part of his personnel costs; he doesn't see the overhead costs; he doesn't have the same incentives for making decisions that you see in the private sector where they do have the ability to know what their full costs are.

So, once we have the reflection of full cost, which we have put forward part of it in a legislative proposal of the Managerial Flexibility Act I think we'll be able to move forward with this budget and also in the future when some of this legislation is enacted, some of it we can do internally and some of it requires legislation to reflect full cost, we'll see a real tie between performance on programs and the budget for these programs, as well.

Particularly in these times when we really need to work to reallocate some of the budget resources to priorities -- to fight the war on terrorism -- we need to be able to determine what are the poor performers and what are the good performers in terms of programs and make sure that we're properly allocating those costs and to do so, we really need to know what the full costs of these programs are.

This one also ties into competitive sourcing in A-76. The competitive sourcing initiative, which I'll talk about in some more detail, is really an attempt to infuse the elements of competition that you see in the private sector into the federal government where there are commercial activities that are being performed by federal employees. But a difficulty with that is the fact that, in the public sector you don't have the true cost reflected. In order for the public-sector entity that may be performing payroll services or janitorial services, it's hard to compare them with a private-sector entity because the public sector doesn't reflect the full cost.

Thus, we had the need for this A-76 process, which brings into line through a cost comparison, the public-sector cost with the private-sector cost, so you can be able to compare the two. If we have the true full cost reflected in an agency budget, you wouldn't need to go through a difficult complex cost-comparison process in order to make or for a program manager to make a rational decision.

I�ll just mention briefly, some of the other initiatives, because they do work rather well together. We have one on improved financial performance, which deals with clean audits and many of the overpayment issues.

We have one on e-government really making our government citizen's center, collecting data once, using it many times and really wisely spending our IT resources.

Human capital, which, as I said before, is I think, the key to all of these initiatives and, particularly, the human capital in the acquisition workforce.

And fifth, which I spoke a little bit about is competitive sourcing.

MR. LAWRENCE: You mentioned the A-76 process. Could you describe it a little bit? You did describe it some, but it seems like you're hinting at some of the shortcomings of it.

MS. STYLES: Well, the basis of the A-76 process is the Federal Activities Inventory Reform Act of 1998, which required departments and agencies to identify federal employees who were performing activities that are really commercial in nature.

And what we do with that is we take those people that the agencies have identified and we say the President committed to competing those activities to making sure that where the federal government is performing a commercial activity that they are performing it in a competitive environment with the private sector. So he set a goal of competing 50 percent of the FTEs or the federal employees that are listed on the 2000 Fair Act inventories. And these are set up as public/private competitions, where the public sector functions and actually competes for their job with the private sector under the structure that we have at OMB of circular A-76.

And a large part of this circular or the structure of this is so we can bring the cost of the public sector into line with the private sector so you can have a true competition between the two.

MR. LAWRENCE: Is it a fair comparison and a true competition?

MS. STYLES: I think the question you ask raises are there problems with the A-76 process. And, yes, absolutely, there are problems, it's lengthy -- the private sector often doesn't want to participate because it is lengthy and difficult. There's appeals and we are working closely right now with the General Accounting Office's commercial activities panel that was created by statute last year, to really work to make the right changes to this process. We've got the right people at the table for this. We've got the unions, we've got industry, and we've got the Administration all at the table really discussing, I think, the difficult issues with public/private competition; giving public employees true opportunity to compete for their job; making sure that it's fair and objective, and that we have accountability.

But overall, you know, A-76 and public/private competition is, in my mind, and I think in the Administration's mind, really a tool for management, it's not an end in and of itself. What we want people to be doing is to be looking at their whole workforce. What are people on our workforce doing that's inherently governmental? What are they doing that's commercial in nature? And they also need to be looking at what have we contracted out? Who do we have in the private sector that is performing mission goals for us, that are helping us meet our mission, what are they doing?

I mean, in order to manage the agency well, you really have to have a full view of the process. So we're using one tool that we have to really try to force some good management, and some good management decisions and that's really what we're concerned about, is let's make some good management decisions about how you're using your workforce.

MR. LAWRENCE: We know that House Representative Tom Davis plans to propose legislation called the Services Acquisition Reform Act, SARA, that would create chief procurement officers at the agency level and it would also increase money for training and encourage a shared in savings mechanism for federal contracts. What are your thoughts on these procurement innovations?

MS. STYLES: I think we're always looking for ways to innovate. When I came to this office, one of my primary concerns was not necessarily looking at ways to push the envelope in terms of innovation. I certainly think it's important to always consider those, but I also want to make sure -- and we've been through 10 years of acquisition reform. We want to make sure that we go back and assess what our goals were and whether those were achieved and what changes we need to make in the system to make sure that we are properly promoting competition, that we haven't left behind some of the fundamental ideas.

And what procurement reform really did was bring around efficiency where it was needed and innovation where it was needed. And that certainly doesn't preclude further innovation, I think there's a lot of good ideas out there, but I certainly consider it my mission to make sure we know where we are; make sure the procurement officers that are implementing the changes in acquisition reform are doing it right and see what kind of changes we need to make, sure that we have good acquisition fundamentals; that we've got the basic building blocks there whether it's planning or management of the contract so we don't leave behind some of the important elements in the name of efficiency.

MR. LAWRENCE: Well, that's a good place for us to stop. Rejoin us after the break when we continue our conversation with Angela Styles, Administrator for Federal Procurement Policy. This is The Business of Government Hour. (Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and today's conversation is with Angela Styles, Administrator for Federal Procurement Policy in the Office of Management and Budget.

Well, Angela, in our last segment, you talked a lot about competitive sourcing, so I'd like to go back to that. How do you encourage competitive sourcing at agencies?

MS. STYLES: It's a difficult process to encourage any large change in management and in the way we manage agencies. Before I got to OFPP, there were some numeric goals that were set for the agencies that they had to compete 5 percent of their FTEs that were listed on their Fair Act inventories for 2000 in 2002, they had to compete them in 2002 and then they had 10 percent in 2003.

What we've really moved to, you know, we set those up as goals and in some respects somewhat arbitrary goals because we had to have something to get agencies moving down the line. But when Mark Everson (phonetic) came on-board --he's the head of OFFM, the Office of Federal Financial Management, within OMB -- he brought some very creative ideas from the private sector with him. And one of them was a management scorecard.

And what we have done is, we have taken all five of the President's management agenda items and we have a scorecard for the major departments and agencies that participate on the President's Management Council. They essentially get a red, yellow, or green mark for a baseline. What we've just gone through is, we've made a baseline determination on where they are on each initiative as of September 30 of this year. And we've communicated with them, you know, what their score on this baseline is. And the President will be receiving it in the next couple of weeks and he'll be discussing it with the Cabinet. And Mitch Daniels will be discussing these scores with the Cabinet officers, as well.

But that's not all of it, we had -- quite frankly, there are a lot of red marks. We have a very aggressive mission and in almost, I think I counted about six yellow marks for the five initiatives at all the departments and agencies. And I can tell you every department and agency is red in competitive sourcing. I had that distinct honor of all the management initiatives that I'm the only one that has all reds for all the departments and agencies. But, you know, that's not very useful in terms of pushing people forward.

So what we did was we have a second side to the scorecard, which is progress on achieving the goals that we've set forth; our progress on achieving our vision. And the second side, we're going to score quarterly. If people have come in, particularly in competitive sourcing, they have a work plan, they have schedules, they have a good mix of direct conversions and true public/private competition, if we see that they're making real progress, they can have a green come January or a yellow come January and it's quite an incentive. It actually is an excellent tool for the departments and agencies to discuss where they're going with us because it's something on one page that the President can use, that the director of OMB can use, that he can talk to the departments and agencies and where they can see what the scores are and how they compare to others.

I've been pleasantly surprised at how this tool, this scorecard tool works much better than setting up somewhat arbitrary numeric goals on the board and saying you need to meet these. This is, actually, a way to effectively work with the agencies on their plans to really make some progress. And I've been pleasantly surprised at the progress we're making, particularly at the civilian agencies as a result. And I think the other owners of these management initiatives are very happy with this, as well.

Not to say that we don't still have aggregate goals that we want to meet of 5 and 10 percent in competitive sourcing, but this is a much better way to make sure that we have good management plans. I'm not looking for just goals, arbitrary FTE goals, I want good management plans; I want people to really be thinking about this in a functional sense. And what makes sense is to compete.

MR. LAWRENCE: Well, let me ask you about the scorecard. Would an agency have gotten a red because they hadn't reached their goals? I know you described the progress towards doing that, but for the first one out, how did you get a red?

MS. STYLES: Well, actually, the metrics are available on our Website at OMB.gov. For competitive sourcing, we did have some rather objective goals of have you competed 15 percent of your Fair Act inventory from 2000 and, you know, certainly, you know, 9 months, no agency's actually done that. It will probably be a couple years in the broad vision respect before an agency can move from red to yellow as far as competitive sourcing goals, but we have some other things in there. Are they considering an appropriate mix of direct conversions in public/private competition? Because the point of this is not to just convert or outsource to the private sector. The point is, really, to have true competition infused in the government; to have public/private competition and to give employees an opportunity to compete and to show us their entrepreneurial skills and really move the government forward from a management perspective.

MR. LAWRENCE: Early on in our discussion, you described a somewhat unique mission of OFPP working with lots of different groups. And I'm curious, how do you manage crosscutting issues and the divergent perspectives amongst the different stakeholders?

MS. STYLES: I think it's really the hardest part of the job because OFPP really has a large group of stakeholders. You know, we've obviously got the President; we've got Congress; we've got all the departments and agencies; we have industry; we have the unions; and the only way to be effective in communicating with them is to be out there talking with them. We have an open-door policy, you know, and I truly do have an open-door policy and where people aren't coming in, I go out and seek them, I mean, I've had, I think, in some unique ways, I've had some recent meetings with the government employee unions, AFT and NETEU because I think that it's essential, whether it's competitive sourcing or anything else, that we have good communications -- we many not always agree on issues -- but we have good communications and that we get input and that we work on the issues together because, you know, if we're ignoring one sector of the stakeholders, I don't think we can appropriately move forward. It's essential to have as open a door as possible, whether it's in rule making or whether it's simply in working on some of the policies and initiatives.

MR. LAWRENCE: How do you actually do that communication? You can't meet one-on-one with all the people you described. How do you really do that?

MS. STYLES: I certainly go out and speak a lot. There are some councils that we work with. We, certainly, for the rule-making process, we have the FAR Council, which is a well-developed process that was set up by statute to work with the main rule-making agencies to make sure that we have appropriate input from both the agencies and the public.

You know, as I talked about before, that's really a key to transparency in the system. And I really do get out there and talk to people on a regular basis. And we have formal communications but, you know, the informal ones, in many respects, are the ones where I get the most information from people and I'm also able to relay more information that way.

MR. LAWRENCE: Well, let me shift gears here a little bit and talk about the procurement and acquisition professionals. What kind of training and professional development resources are available to them?

MS. STYLES: I think we've really had an explosion in the resources that we have available in training. I think over the past 10 years there was a reduction in the acquisition workforce but, also, a recognition since there was a reduction in the workforce, and there were a lot of changes in the procurement system of the need to appropriately train these people.

We have numerous schools; we have in-house institutes that offer procurement training, such as the Defense Acquisition University, and the Treasury Acquisition Institute. And there are also a lot of private-sector training firms that have really blossomed in recent years. You've got colleges and universities that have gotten into the act. You've got George Washington University, University of Virginia, University of the District of Columbia, all are offering degrees and programs in procurement and contracting.

I think federal procurement mangers and employees are encouraged and even required, in most cases, to take continuing education credits and to update their skills and to stay abreast of the field, because it is constantly changing and it's essential for them to do that.

MR. LAWRENCE: And I was going to ask you about that. Are those courses teaching the way things used to be or are or the way things should be or might be? I know many of your predecessors have talked about the acquisition professional changing in their role in an organization, so I'm curious. Is the training helping to drive this new vision?

MS. STYLES: I think the training has helped to drive this new vision. I think it's to help to make some cultural changes and some step-forwards and in how the procurement community works and works together. I think one of the key elements for me that we really haven't addressed is how we get a more cradle-to-grave view of acquisition. How we get the program managers, the program acquirements people and the procurement people to all work together. The focus of acquisition reform is really on the isolated piece of procurement.

But to do a good job, to move forward, whether it's competitive sourcing or whether it's simply in procurement, you really have to have these people working together and communicating together or you don't end up with a good product and you don't really end up with a good procurement, but I find at the civilian agencies that there are some cultural difficulties to those people communicating. And that's one of the most difficult challenges of this office is to figure out how to get these people communicating to have better statements of work; to have better contracts; to really take it to the next step.

MR. LAWRENCE: How will you measure your success?

MS. STYLES: Well, I do have a scorecard -- it's not the agency -- it's not simply the agencies that are being measured on the scorecard, I think it's also, internally, that the director, Mitch Daniels, is certainly measuring us on how successful we are in moving the departments and agencies forward in the President's management agenda item.

But I really came to this office with the idea that we need to take a hard look at where we were in acquisition reform and if I'm successful and, in some ways, calming down the system and taking a practical view of it, you know, we can't keep training people on new things if we keep changing the system. I want to make sure that we've trained them on the right parts of the acquisition system; that people understand it; that we know where the problems are; that we know that we've achieved the goals; and that we take a careful and cautious approach to this so we know, from my perspective, that I'm getting the best value for the taxpayer in terms of price and quality and that we've got the proper rules and regulations in place to do that.

I mean, the most important job here, I think, is being a good steward of the $200 billion that we're spending.

MR. LAWRENCE: Well, that's a good stopping point. Rejoin us after the break as we continue our conversation with Angela Styles, Administrator for Federal Procurement Policy. This is The Business of Government Hour.

(Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and today's conversation is with Angela Styles, Administrator for Federal Procurement Policy in the Office of Management and Budget.

Well, Angela, what do you think are the greatest challenges facing procurement officials today and in the future?

MS. STYLES: Currently, I think the greatest challenge is trying to figure out how we push forward with what the President has articulated as our primary goals and objectives. And in my mind, in acquisition, that means competition. How do we make sure there is an appropriate level of competition and how do we make sure that our system is appropriately transparent, so people know that the decisions we make are objective and not subjective in nature. And that we are promoting access of lots of different companies, commercial companies into our marketplace.

I certainly am concerned that if it's viewed, if your system is viewed as too subjective in nature, that people don't want to participate, people don't want to contract with the government if they think that the deal is already set that, you know, there are certain agencies that contract with certain contractors. You know, I want to make sure that the system is objective, promotes competition and is as transparent as we can possibly make it.

MR. LAWRENCE: Do you have a timeframe for how this will work? I'm curious because Fair was a '98 act.

MS. STYLES: That's right.

MR. LAWRENCE: Even in now 2001 people have got red dots on their scorecard. Do you think it's going to take a while for people to really want to do what people actually said they were going to do?

MS. STYLES: Absolutely, I think, particularly at the civilian agencies as far as competitive sourcing and public/private competition goes, there's not really significant infrastructure in place to conduct these types of competitions, so it's going to take a long time and I think, as I've said before, I want the focus to be good management plans, to be really taking a look at everything that the agency is doing to be meeting their mission goals and use competitive sourcing and public/private competition as a tool. It's a means to an end, it's not the end in and of itself.

MR. LAWRENCE: What do you see as the upcoming procurement and acquisition trends?

MS. STYLES: From my perspective, I certainly see a focus on, again, on competition to make sure that we have an appropriate level of competition. I see us focusing on the acquisition workforce to make sure that it is well coordinated between what I've mentioned as the program requirements, management and procurement people. Those people have to be working together for us to be able to meet any of our goals, whether they're procurement goals, human capital, financial improvement, competitive sourcing. I mean, we've got to move to a cultural change and a cultural change in the way we contract, as well, you know, a lot of people talk about performance-based service contracts. And the primary difficulty with implementing those is that there's not a cultural change, these three groups in acquisition aren't communicating. The requirements people aren't communicating enough of their needs for procurement people to be able to write a performance-based service contract.

So there's some cultural changes that have to take place, I think, for us to make significant steps forward in how the government contracts.

MR. LAWRENCE: Are there any new procurement technologies on the horizon that will allow this to happen?

MS. STYLES: We certainly have looked at a lot of different areas, and we don't want to move out with something before it's viable. I think we have some past experiences in procurement with things like FactNet, for anybody that's familiar with that. So we don't want to move out ahead of the curve, but we want to make sure that we're appropriately using technology.

What I've found interesting is that we have a federal procurement data system, which, for a number of years, as required by statute, collects data on procurements. But it's really just been used to report back to Congress on meeting small business goals, women-owned small business, minority forum, all the goals, the statutory goals that Congress sets forth.

And what I want to move that to is to a management tool where a manager of a federal department or agency can actually look at it and say, okay, I've got my Fair Act inventories, I've got a list of inherently governmental people, but I also know what my contractors are doing. I can have a tool available that immediately tells me exactly what it is that I have contracted out so I'm able to manage that and know how these contractors are helping me meet my missions and goals.

And we've also got some initiatives in other areas: vendor registration, past performance databases, and certainly taking a look at integrated acquisition.

MR. LAWRENCE: We hear a lot about the coming retirement wave and the difficulty of retaining government employees and recruiting. How will these issues impact procurement offices throughout the agencies?

MS. STYLES: The first step is making sure that Congress doesn't attempt to make further cuts in the acquisition workforce. And we have been very up front in our opposition to some congressional initiatives to cut the workforce, because it really is the key workforce to make improvements in the management of government.

And as I talked about before, one of the elements of the President's management agenda is the human capital initiative. It's actually shared jointly between OMB and OPM, which is very unique in the history of OMB and OPM to share an initiative such as this. And we've actually introduced legislation, the Managerial Flexibility Act. And we've briefed a good number of the stakeholders on it. And one of the titles of the Managerial Flexibility Act would actually make some changes to make the personnel system more flexible for the agencies.

But with that said, you know, we're working pretty hard and I've seen Kay Cole James out talking to numerous departments and agencies about the flexibilities that they have in place and how they should be used. And, certainly, there's some concern that the departments and agencies have a lot of flexibility out there that they haven't, for a number of reasons, used so we're pushing forward with them actually using those, actually working to recruit and retain the good people.

And, I guess, the other element of that is, certainly, the technology workers, which, you know, we've had some historic difficulty retaining versus the private sector. And, you know, we need to think long an hard about what we can anticipate as an appropriate level of technology workers. You know, I'm concerned that even now we don't have an appropriate level of public-sector employees that can even manage our IT contract, so it really -- it has to be a focus of how do we recruit and retain the appropriate people for those positions?

MR. LAWRENCE: Could you tell us a little bit about the Managerial Flexibility Act in terms of what it is and why you think it's important?

MS. STYLES: Well, we came out with a Freedom to Manage initiative that has several parts: a Freedom to Manage Act, which would give us fast-track authority for some statutory barriers that agencies may have to managing their agency. There are some, you know, ludicrous examples, like, not being able to fly test planes East of the Mississippi, you know, there's some -- there's some -- and we're asking departments and agencies to really come forward with their lists of requirements that Congress has put on for one reason or another that, you know, may have had some validity at one point in time, but doesn't now.

There's also the Managerial Flexibility Act, which has three titles: One is a budget integration portion would actually would reflect the full cost of retirement and health costs in agency budgets. OPM actually pays for a great deal of the cost right now, so the agencies don't know what the true costs of their personnel are.

A second title deals with many of the personnel issues and flexibilities. And then a third title has to do with property disposal and actually incentivizing the departments and agencies to determine what some of the excess property is that they have and it would allow them to keep some of the money, once that property is actually sold. Right now, if the Department of Defense has excess property, the money resulting from that sale simply goes back to the, you know, general fund. So the department has no incentive to actually identify excess property, and this would change that.

MR. LAWRENCE: Why, whenever there's a discussion about flexibility, people are quick to point out, as you did, that the agencies actually have much flexibility and they, perhaps, don't use it. How does that work? Do they just not know about it or do they really need more, I've never quite understood the balance?

MS. STYLES: Some of it is not knowing about it; some of it is education; some of it is, certainly, concern about using it. I mean, I think some of the federal employees are concerned about how the authorities will be used, and I think some of that concern is legitimate. But there also are some additional flexibilities that we think would be appropriate, too. So, we'd like to move forward with those, as well. I mean, some of it's educational about what we already have and some of it's moving forward with our legislation on the Hill.

MR. LAWRENCE: What's our vision for OFPP in the future, the next 10 years, what will it look like? What will it be doing?

MS. STYLES: You know, we have some -- it's interesting -- it's a very small shop of people. We've got about 23 people on staff. And it's gone back and forth. I mean, sometimes it's considered to be an implementation office and sometimes it's considered to be a policy office.

And my vision for it is, certainly, to be a premiere policy office. You know, we are within the Office of Management of Budget, we're within the Office of the President and we're really relied upon for advice in all aspects of procurement laws and policies and acquisition and oftentimes a lot of other labor issues and various policies. And I want OFPP to really be the premiere policy office, the place that people go when they have the difficult policy questions, how should we change this regulation; what's the right way to do this? You know, what's the vision for the future of procurement? What laws do we need? What changes to laws do we need?

You know, certainly, we'll always have some mission and trying to implement being at OMB, but I'd like the focus to be on the true policy issues and determining some of the difficult questions that we have in acquisition.

MR. LAWRENCE: Well, I'm afraid we're out of time, Angela. I want to thank you for joining us this morning. Thank you very much.

MS. STYLES: Thank you, for having me.

MR. LAWRENCE: And did you want to mention your Website one more time, you referred to it several times.

MS. STYLES: Oh, yes, it's at OMB.gov and many of the issues that I've discussed here today with the President's management agenda and our scorecard are available there.

MR. LAWRENCE: Are the scorecards with the red dots there yet or is that �

MS. STYLES: No, no, we don't actually have those, but they will be eventually, so �

MR. LAWRENCE: Thank you very much.

MS. STYLES: Thank you.

MR. LAWRENCE: This has been The Business of Government Hour, featuring a conversation with Angela Styles, Administrator for Federal Procurement Policy in the Office of Management and Budget.

Be sure and visit us on the Web at endowment.pwcglobal.com. There, you can learn more about our programs in research and get a transcript of today's interesting conversation.

Once again, that's endowment.pwcglobal.com.

This is Paul Lawrence, see you next week.

Angela Styles interview
04/20/2002
Angela Styles

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