GCN Hall of Fame | Steve Kelman: An architect of reform
2007 GCN Award: Kelman steered the government toward better ways to buy
- By Christopher M. Wright
- Oct 07, 2007
THE REFORMER: Steve Kelman helped cut red tape on small purchases and bring past performance into the bidding process.
Harvard University professor Steve Kelman came to Washington in 1993 to help sort out the federal procurement mess, but it wasn't until the following year that he was convinced he would succeed.
The moment of truth came when Kelman, then administrator of the Office of Federal Procurement Policy at the Office of Management and Budget, walked into the marble-paneled Indian Treaty Room in the Old Executive Office Building for a pledge-
signing ceremony he had organized ' and saw that his invited guests had actually shown up. Procurement officers from 23 agencies were assembled to sign Kelman's pledges to use purchase cards for small, commercial items and consider past performance when evaluating commercial vendors for contracts.
Then-OMB Deputy Director Alice Rivlin and other VIPs looked on from the imposing room's gallery. That was when he knew his reforms would become reality. 'It was really an amazing feeling,' Kelman said.
It all began with nursing home beds. While a professor of public management at Harvard's Kennedy School of Government, Kelman was perusing the findings of the Reagan-era Grace Commission on government waste when a story about the Veterans Affairs Department (then the Veterans Administration) paying quadruple for nursing home beds caught his eye. It was from this kernel that his seminal book on government purchasing grew. 'Procurement and Public Management: The Fear of Discretion and the Quality of Government Performance' came to the attention of the Clinton administration, which brought Kelman to Washington. Kelman figured the timing was right because of Vice President Gore's National Performance Review.
By the time he was through, Kelman had helped usher in a whole new approach to federal procurement, one that remains largely intact today. Before the procurement reforms of the 1990s, regulatory constraints took precedence, and the needs of government employees were forgotten, Kelman said. Government customers waited months to obtain something as simple as a PC or dictaphone. It was 'OK to treat them like dirt,' he said. 'Their needs were such low priority, who cares how long they waited?'
Agency missions got lost in the shuffle, he said. With purchase cards and small-purchase reform, feds can expect next-day delivery or even walk into an office supply store and buy their items without bureaucratic wrangling over product specifications or cost data.
Before 1993, vendors who lost major information technology procurement contests could be counted on to launch protracted bid protests at the General Services Board of Contract Appeals, replete with lawyers, depositions and cross-examination. At Kelman's urging, Congress changed the law, and bid protests largely went away, at least through 2004, the way Kelman sees it.
But the most significant reform, Kelman said, is the use of past performance in evaluating vendor bids. Before reform, the government had to take the low bid, even from vendors who had been irresponsible in the past. Kelman recalled a major Air Force PC contract where the vendor simply stopped delivering because it wasn't making enough money.
'It was absolutely amazing to me'that this vendor thought that they could behave this way towards a customer and ever do business with the Air Force or with the government again,' Kelman said. 'But they could, because the government wasn't allowed to look at [poor past performance] in making future contract awards.' Under Kelman's stewardship, the Federal Acquisition Regulation was changed to consider best value to the customer.
Mark Forman, a Senate staff member at the time, worked with Kelman on the legislative front. Forman became OMB's first administrator for e-government and IT in 2001. Inducted into the GCN Hall of Fame in 2006 and now a partner at KPMG, Forman considers Kelman's work foundational to his own.
He credits Kelman with helping to secure the passage of two major pieces of reform legislation during his tenure at OFPP. 'Nobody else has done that,' Forman said. The first one changed the procurement system from heavy oversight at the outset to an emphasis on improved contract execution. Kelman's 'leadership, his attitude, his approach, his knowledge was critical to success on the Federal Acquisitions Streamlining Act,' Forman said. Kelman's book also was 'critical to the creation of the Clinger-Cohen Act' which emphasized commercial solutions, Forman said.
Kelman's accomplishments are all the more remarkable, Forman said, because they came at a time of tremendous downsizing in the procurement workforce and the government generally. Kelman's leadership, along with his care and feeding of reduced staff, kept the rank and file motivated, brought cost overruns under control and prevented a train wreck that could easily have resulted from diminished staff capacity. 'I don't think people recognize that or give him enough credit for that,' Forman said.