By Jeff Erlichman

The current Procurement process isn’t optimal for what the federal government needs, and the Administration is committed to transforming it.

For IT, the process can be as simple as making a phone call and giving a government authorized credit card number. Or it can be as complex as issuing line after line of detailed requirements and then evaluating competing offers from hundreds of vetted suppliers. Both are types of Procurement.

Procurement is the acquisition of goods and/or services at the best possible total cost of ownership. A good Procurement buys a quality product or service in the right quantity, at the right time, at the right place and through the right source using an approved contracting vehicle.

It sounds straightforward doesn’t it?

The Administration Acts
So, why on March 4, 2009 did President Obama tell government to use fixed-price contracts rather than cost-based contracts? Why is he asking OMB to come up with new government wide guidance governing the use of all types of contracts and what are the parameters for outsourcing, by September 2009?

Federal CIO Vivek Kundra told an AFCEA meeting audience that “the current Procurement process isn’t optimal for what the federal government needs, and this administration is committed to transforming that.”

He further said “the Data.gov Web site will enable the public and industry to access agency data and create new solutions the government can use. Democratizing agency data could help the government save money.”

What Kundra proposes is to use a combination of “improved access to information, better-defined requirements and more accountability” to improve Procurement.

But if it were just that easy! On using fixed-price contracts, Harvard professor and former OFPP administrator Steve Kelman wrote recently in Federal Computer Week:

“There are two potential problems, distinct though often mixed together. One is a situation in which the government knows what it wants, but it’s unclear how much effort it will take a contractor to meet the requirement... A second kind of problem is where government isn’t, or can’t be, specific about what it wants. In such situations, a fixed-priced contract is meaningless, because it is unclear what the
customer will get for the price.”

Kelman believes there are opportunities for increasing fixed-price contracting. “For example, some requirements get competed and re-competed without changing dramatically. It should be possible to convert these projects to fixed-price.”

Both Kundra and Kelman said part of government’s problem partly lies with poor requirements from the federal government.

A poorly specified requirement will produce a poorly delivered service. Requirements changes, which are common, then require negotiating change orders in a sole-source environment, potentially negating benefits of a fixed price according to Kelman.

All of this sounds as if there is a lot of work to do. So, what is government currently doing to meet the goals of the Obama Procurement memo and employ a Procurement process that works for everyone – buyers, sellers and taxpayers?



C-Level Commitment
Procurement begins with the acquisition process.

At the CIO level, there is a concerted effort for these senior officials to promote continuous learning and professional development for the IT workforce. One way this manifests itself is through the Clinger-Cohen Core Competencies and Learning Objectives that call for CIOs to “ensure that the knowledge, skills and abilities represented in each competency are resident within their organization.”

The competencies include the skills to: develop acquisition strategy; use acquisition models and methodologies, from traditional to streamlined; perform post-award IT contract management; use IT acquisition
best practices; and manage software acquisition.

At the same time The Chief Acquisition Officers Council provides a senior level forum that promotes effective business practices. The goal is to ensure the timely delivery of best value products and services to the
agencies, achieve public policy objectives, and further integrity, fairness, competition, and openness in the federal acquisition system.

Acquisition Community Assessment
Procurement policy may be made at the senior levels, but for Procurement policy to be effective it has to work practically in the trenches. 

Col. Steven Burden is the program manager for the Army’s Joint-Automated Identification Technology program. PM J-AIT is the Army’s RFID technology leader, providing provide global asset tracking, Web-based RF-ITV services, and complete program life cycle support. He buys what Warfighters use on the ground.

In a recent interview with 1105 Government Information Group Custom Media, he talked about Procurement and what advice he would give to IT buyers.

“We in the acquisition community need to carefully think about who exactly the end user is and the types of environments they will be operating in before making Procurement decisions. It is very easy to decide that a solution that appears to be less expensive up-front has long-term costs due to sustainability that make it the least cost-effective.”

Col. Burdon further advocated open communication with the requirements community on whether the recommendation for a solution is a want or a need.  Due to unrealistic requirements (there is that word again) the acquisition community has often gained a reputation for delivering solutions too late due to unrealistic requirements. 

“Finally, keep engaged with the commercial marketplace.  There are a lot of companies that are making IT solutions that are ‘off-the-shelf’ that can be the 75% solution now rather than the 99% solution a year from now.”

An Expanding Workforce
Procurement is dependent on an educated, professional workforce – and having more of them. For example when it comes to fixed-price contracts, Kelman wrote “government needs to understand that more fixed-price contracting requires more acquisition professionals to develop requirements.”

DOD agrees, predicting more employees and a larger role for the Defense Department’s acquisition workforce. They have launched an unprecedented acquisition workforce growth initiative to increase the acquisition community by 15 percent to 20,000 people through fiscal 2015.

And because DOD needs to adhere to the Obama Procurement memo, they are moving to draw clear lines between what is inherently governmental and what is not. They plan on changing nearly 11,000 contractor support positions to full-time government employees.


Those 11,000 are most likely to need education and training. For that they will turn to organizations such as the Defense Acquisition University (DAU) or the Federal Acquisition Institute (FAI). These organizations provide the hands-on knowledge and professional accreditations needed to make the Obama memo not just another White House memo that the rank and file tepidly embraces.

Read More
Procurement touches everyone. This 1105 Government Information Group Custom Media exclusive report will focus on the different groups that are involved in the day-to-day business of Procurement.

So, if you are an IT buyer, you need to know what types of Procurement vehicles are available to use and learn about organizations such as the Acquisition Services Directorate. Read the article titled “The Vision Is Becoming Real” for answers to those questions and more.

If you are an IT vendor, what are your concerns?  Read this article “It Takes Two To Tango”.

If you are a government agency, what best practices can you follow? Detailed examples of “A Transformational Agency”.

And if you’re looking for a career in Procurement, then look to this article “Be America’s Buyer” for direction and insights.