ICE-MAN is about feds adopting business methods

Beware of getting what you wish for.

Lobbyists for information technology vendors and critics of federal IT have complained
for decades about stodgy, inefficient bureaucracies, saying they should adopt modern
business methods. To cut costs, the Clinton administration has pushed agencies to
consolidate data centers. So the Agriculture Department and the Federal Aviation
Administration took these messages to heart.

Most of the bureaucracies I know would find it tough to prevail against their leaner,
no-nonsense, bottom-line counterparts in the private sector. But FAA's award of the $250
million Integrated Computing Environment-Mainframe and Networking contract to the USDA
shows it is possible for federal units to compete effectively. USDA's National Information
Technology Center (NITC) won the ICE-MAN contract in May.

A few observers in the Beltway Bandit crowd are shocked and livid.

As the song goes, "Get over it." Vendors have complained for decades about
inefficient government and how they would fix it. But when government does change, we hear
sore losers whining that it's not fair. The earlier lamentations of the complaining
vendors cast doubts on their current sincerity.

Let's consider some of the complaints that have appeared in print.

"Government has lower overhead because it doesn't have to pay taxes," goes
one line. True, government agencies don't pay taxes, but they have a 535-member board of
directors. Each of these distinguished social engineers is willing to use the federal
government to prove the merit of his or her noble cause. What company could survive the
level of micromanagement that agencies routinely endure at the hands of Congress?

Moreover, federal agencies labor under thousands of pages of legislation and
regulations. These millions of words dampen the entrepreneurial ardor of the most eager
federal capitalist. What private company would care to use federal budgeting, procurement
or personnel procedures? My guess is that the NITC awardees would gladly trade all that
for the relative simplicity of paying taxes.

The next complaint is: "Private companies get rated on their past performance. How
does one government agency sit back and rate a sister agency?" In my experience,
there is no sisterly love lost between federal agencies. If anything, the bias is in favor
of the private sector. Would the Park Service contract with the Forest Service? The Army
with the Marines? Agencies are just as loath to share turf as companies are to give up
market share.

My guess is that FAA gave USDA's proposal as careful a review as any other proposal.
Like their private-sector counterparts, agency facilities have customers, reputations and
track records. FAA wouldn't want to buy NITC's problems any more than it would want to buy
a company's deficiencies. You can bet USDA got the same performance scrutiny as the other

Like a female drill instructor, an agency offerer has to be superior simply to stay in
the running. Everybody is waiting for you to slip up so they can say, "See, didn't I
tell you so?" Therefore, I doubt that FAA cut USDA any slack.

No contracting officer or program manager wants to make flawed awards. Though flaws
occur, my guess is that FAA did its best to make a sound decision, given the controversial
nature of the award. Assuming the unsuccessful offerers didn't find any lint to pick
during the suspension and subsequent 20-day waiting period, FAA will likely treat USDA
like any other contractor.

The final complaint we'll look at is: "Government agencies don't have an incentive
to make a profit." So what? NITC has an incentive to stay in operation. It has jobs
at stake. There may be some legitimate policy issues about the cost of capital, but the
answer to that question is not at all clear. Even so, does FAA or a taxpayer care if the
contractor makes a profit? No, that's the contractor's problem.

Unless one of the losers takes FAA to court, the whining is simply histrionics. If an
unsuccessful offerer thought they had a winning argument for a bid as big as ICE-MAN,
they'd be in court, not the newspapers.

My guess is that all the commotion is really about the humiliation of losing to a bunch
of bureaucrats. Unless they have a real gripe, they need to get over it and move on. Smart
vendors will quietly pore over the USDA proposal and learn from it so they can win the
next time.

Walter R. Houser, who has more than two decades of experience in federal information
management, is webmaster for a Cabinet agency. His own Web home page is at

Stay Connected

Sign up for our newsletter.

I agree to this site's Privacy Policy.