Acquisition Reform Today: Back to the Future
This guest post by Stan Soloway, former President of the Professional Services Council, is part of a longer series on government reforms over the past 30 years and lessons for future leaders.
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Given that about half of the discretionary portion of the federal budget goes out in contracts, it should come as no surprise that the acquisition function—the processes, policies, and people—continues to be a focus of attention. Sadly, that’s especially true when things go south. Today, we are at the beginning of a fourth decade of efforts to reform -- even transform -- a system that is arcane and often struggles (but is also remarkably effective) at somehow getting the job done. The former is mostly a reflection of policy and process, the latter a reflection of a workforce that, even while under-resourced and often under assault, doesn’t give up.
To understand where we are and where we need to be going, it is first important to understand how the preceding decades played out. Earlier installments of this series have covered in some detail the highlights of the first two of those three decades (the 1990s, the 2000s). But reiterating some of their core characteristics is important to the context of the most recent decade and, perhaps more important, what comes next.
Acquisition Reform Today: Back to the Future - Stan Soloway, former President of the Professional Services Council, describes.
A New Sense of Optimism for Acquisition Reform. It may seem difficult to imagine, but 26 years ago there was a remarkable bill signing ceremony in the Rose Garden at the White House. There, President Clinton, accompanied by Vice President Gore, numerous cabinet officials, including Secretary of Defense William Perry, senior leaders, from both parties, of the House and Senate armed services, governmental affairs and small business committees, and a crowd of some 200 people, gathered on a sunny afternoon for the signing of a sweeping piece of legislation. The focus of the bill? Government procurement.
Rarely before and never since has such a powerful array of American leadership convened on a topic typically shunted to the shadows. Sure, there have been plenty of hearings and discussions about the failures of federal acquisition (some real, some imagined); and sure, there have been lots of hearings about individual pieces of the acquisition puzzle, from people to process. But that day was unique in that it was both a recognition and celebration of the centrality of acquisition to the right functioning of our government. It was, in short, a day of optimism, of believing that we, as a nation, were taking an important step forward in modernizing one of government’s most arcane yet essential functions.
Dashed Hopes for New Era of Flexibility. While memories are nice, this one is also particularly significant because it was, on some levels, the beginning of the beginning and the beginning of the end of transforming federal acquisition. For as much freedom, flexibility and open thinking was (and still is) reflected in the underlying legislation (known as the Federal Acquisition Streamlining Act, or FASA), it was also followed not too long thereafter by a decade in which the acquisition function and community became an increasingly frequent target of criticism for a wide array of government’s problems. Some of the criticisms were well deserved; many others however were based on a less than fulsome understanding of the acquisition system and the interdependencies that drive it.
Indeed, if the 1990s were marked by a new sense of optimism about and support for acquisition, in the 2000s the pendulum took a real swing backwards; it was a period of finger pointing, retrenchment and the increased, often unprecedented politicization of acquisition; a period during which contracting mistakes—some real, more perceived, many overstated and overblown—became a kind of cudgel through which other policy differences and grievances were all too frequently played out. During this time, some of the most important reforms of the previous decade were greatly diluted and came to resemble little of their original intent. One key example, the buying authorities contained in what is known as Part 12 of the Federal Acquisition Regulation (FAR) --which really opened the government market door to new entries that were previously unable or unwilling to bring their capabilities to the government -- became layered with dozens of new clauses and requirements. Some of these new requirements were driven by agencies, some by Congress--many of which add little value but much cost and complexity. Today, those new clauses actually number over 150.
It was, in short, mostly a period of retrenchment, of what some called “acquisition re-reform.”
Ask virtually any objective observer and they will acknowledge that that decade was also a low point for the acquisition function and workforce; a time during which risk aversion, always present, became an ever more dominant feature. For a workforce that had been told in the 1990s to be creative, thoughtful, and open minded, the pendulum swung back hard toward rigidity, distrust and a lack of communication. Ironically, when then-Administrator for Federal Procurement Policy Dan Gordon issued his “mythbusters” memo, which argued strongly for more open communications between the public and private sectors, the greatest resistance came from within the very workforce he was trying to support.
A Metronome of Tactical Reforms. Thus, as the 2010s evolved, acquisition policy and practice increasingly began to reflect the schizophrenia of the preceding two decades. If those decades were marked by palpable pendulum swings, the 2010s were more like a metronome set at a high rate. There were new tactical initiatives, like
- Category Management,
- Strategic Sourcing,
- Best in Class contracts,
- “frictionless contracting”;
- broad efforts like the Defense Department’s “Better Buying Power” initiatives, and more.
Meanwhile, the dominance of large, government-wide contracts grew substantially (by intent); and at the Defense Department significant investments in the acquisition workforce were enabled by special funding authorities in 2008 under a new Defense Acquisition Workforce Development Fund—funding that was unfortunately not replicated in the civilian agencies. As is the norm, each initative experienced its own successes and failures. But each also faced at least five common challenges, none of which was fully or adequately considered in their development.
- A Risk Averse Culture. Each initiative faced a workforce that had learned, the hard way, that they were better served by sticking to clear, rules-based decisions; that there were far too few risk absorbers in the system to support them doing otherwise. The sharp rise in low price/technically acceptable (LPTA) procurements was one good example. So too was the (still evident) decline in communications with industry, both pre- and post-award. In that environment, it’s awfully tough to move a workforce forward.
- The Changing Nature of Work. The market itself was (and still is) undergoing a major transformation. The worlds of technology and professional services were converging. The explosion of the digital economy was (and still is) altering the way work is done at almost every level. For the acquisition community those changes manifest themselves both in the ways their own jobs could or should be performed as well as in the ways their customers’ needs could be met. Yet, that market convergence was only slowly recognized by the government’s practices and policies and, even today, it continues to outpace the government’s ability to effectively keep up. Indeed, the world around us is an historically dynamic one; yet the government, as the Section 809 Panel suggested, remains too mired in its history.
- An Aging Workforce and an Aging Development Model. Even as the acquisition workforce was transformed by age (today it is estimated that some 40 percent of contracting officers have less than five years of experience) the overall strategies associated with their development have not genuinely transformed. It would be unfair to say that those responsible for workforce development haven’t driven some change; but it would be very fair to say that, taken as a whole, workforce development simply has not kept pace with the changes in the marketplace. If the military goes by the adage “train as you fight and fight as you train,” the same cannot be said of acquisition. With some modest exceptions, even as the rules governing federal acquisition were dramatically changed, the ways in which the government trains and develops its acquisition professionals has been exceedingly slow to adapt.
- Buying Outside Traditional Channels. With a little help from Congress, including some of the only forward-moving acquisition legislation in years, the government customer began to exert its influence. Fairly or not (and the answer can cut both ways), the customers’ perception that because the current acquisition system and workforce was incapable of meeting the demands of the times, they had to drive toward new or alternative acquisition strategies. The dramatic increase in the use of Other Transactions Authority (OTAs), which enable some agencies to procure new capabilities through processes outside of the FAR, as well as the increasing use of “Commercial Services Openings (which, while still subject to the FAR, incorporate key, performance-based components of an OTA) are perfect examples. Moreover, the very nature of those methodologies—customer-centric, collaborative, multi-functional—reflect widely acknowledged “best commercial practices,” but is largely different than the way most government acquisitions are executed.
- The Rise of Agile Thinking. Even as agile software strategies became the accepted best practice across the marketplace (a trend to which the government was slow to respond), so too did agile strategic thinking take hold. Like its software counterpart, agile strategic thinking is founded in the concepts of flexibility, customer needs, and collaboration, Indeed, such as the software world had migrated to agile development strategies, so too has the commercial sector navigated to agile acquisition strategies, which were also perceived (again, fairly or not) as anathema to traditional, FAR-based acquisitions.
Which leads to where we are, hopefully, heading. The most important next step in acquisition “reform” is much bigger than changing the law or regulations, although some of that is still needed as well. It starts with viewing, operating and measuring acquisition; and recognizing that what we call “Big “A” acquisition is really horizontal supply chain management, an enterprise approach to meeting rapidly evolving and ever-changing needs in an equally uncertain marketplace. Meanwhile, there are a range of interim steps that could have important impacts in the near future.
Get back to basics. The goal of federal acquisition must be to give the government the broadest possible set of options for capabilities it needs to meet its many and diverse missions. In that regard, and as the congressionally-mandated Section 809 Panel reported in its 2019 study on streamlining the Defense acquisition system, there is an abject need to reinvigorate the government’s ability to effectively and efficiently utilize best commercial practices. That does not mean that the government is or should be run like a business. But it does mean that we have strayed too far from smart, core commercial practices that are essential if the government is to be in a position to fully access the array of capabilities available across the marketplace. And we can get started doing so by adopting the recommendations of the Section 809 Panel to simplify, clarify and recast “commercial buying” authorities.
Start measuring the effectiveness of acquisition. Several years ago, the Professional Services Council recommended that federal acquisition organizations begin utilizing 360-degree evaluations of every major procurement. Much like such evaluations in the human resources arena, these surveys would seek input and assessments from all relevant stakeholders from inside and outside the government. Was the acquisition team responsive and communicative? Were they open to alternative approaches? Did what they “procured” accurately reflect the customer’s expectations and/or what the vendor community understood the desired capability to be? Through a handful of questions, organizations could quickly determine the extent to which they were meeting expectations and delivering.
Don’t refill the vacuum. Even as we eliminate barriers to the government market, we also have to carefully guard against establishing new or expanded government-unique compliance requirements that in and of themselves could close the door to the commercial market. For example, while there is broad consensus cybersecurity presents enormous national security threat, new cyber policies, such as the Cybersecurity Maturity Model Certification (CMMC) must carefully balance that threat against the government’s ability to fully capitalize on technologies and capabilities that may not have been developed with a CMMC-specific framework in mind. That means we need the willingness and capacity to evaluate other tools to measure cyber hygiene and not assume one size is the only size for all. Ironically, one of the first and more subtle (and also largely diluted) reforms of the 1990s was a policy to no longer require specific “certifications” and to instead always allow for “equivalence” from a range of sources. Cyber is a key area in which we need to return to that model and one that can have a dramatic effect on acquisition effectiveness.
Think broadly. Perhaps most of all, the time has come to rethink the very structure and approach to acquisition. A few years ago, a group of acquisition experts, most of them mid-to-senior career federal acquisition professionals, devised a concept known as “Acquisition of the Future,” through which acquisition organizations would develop themselves and be measured on the basis of a classic maturity model in which the attributes and characteristics of each level are well defined and provide clear aim points. The essence of the Acquisition of the Future concept boils down to a few, core tenets, including customer focus, cross-functional collaboration, data, and an interdisciplinary strategy and structure. Whether that model is “the” model going forward or not, it serves as an important jumping off point for an entirely new way to think about acquisition and provides a baseline for the kind of forward-leaning workforce development that is needed if the government is to operate and even compete effectively in the market of today. That would be genuinely transformative.