The procurement process is different, not better -
Mystified and amazed by the GCN editorial that lionized the recently departed Office of
Federal Procurement Policy administrator, Steve Kelman, many of us were given pause [GCN,
August 4, Page 30].
Perhaps Kelman will be judged by history to be a "happy warrior," but it will
take several years for some of his bizarre initiatives to play out in the real world of
information technology contracts.
Although stirring up the procurement pot is always popular, it seldom creates any
tangible benefits for taxpayers. Kelman's thrust of relaxing regulations governing federal
contracts has been quite popular in many quarters. Program people in government agencies
can now spend money faster, easier and with less accountability. The role of contracting
officers has been greatly diminished. Vendors now know that with enough money behind them,
they can win a procurement, often without even offering a competitive price.
For example, Kelman's championing of massive blanket purchasing agreements is highly
suspect. In the absence of competition, BPAs truly are a license for vendors to steal.
Take a look at the Federal Acquisition Regulations Part 13 and read for yourself. A BPA is
one of the most flexible instruments in our system and was originally designed for small
purchases. But now we have orders, or calls, for commercial items worth up to $5 million!
This is great for those buyers and sellers who enjoy playing fast and loose with the
rules. But some gleeful BPA recipients will lose their smiles when they realize that after
competing to get the BPA, they now must compete for each and every individual order.
Unless a company is the recipient of a BPA, there is no practical way of knowing
whether BPAs exist. A BPA is not a contract. It is a vehicle to contracts. So many of the
provisions and procedures related to public contract information and the redress of
grievances are rendered moot when an agency uses a BPA. No one can complain about a
contract that is not, in the legal sense, a contract.
Because the actual contract components under a BPA--solicitation, offer, award and
consideration--don't kick in until an order is placed against the BPA, tracking orders is,
as a practical matter, impossible. A company would need lots of doorknob pullers and feet
on the street to monitor the many orders that an agency can place over the phone.
And what about the vendors, particularly small companies, that sell products and
services competitive with those available on a big BPA? In a Washington Post article
several months ago, Kelman seemed to show disdain for the concerns of small businesses.
The OFPP administrator said his programs are not intended to nurture small-business
contract activity in the public sector. Yet isn't this the administration that has told
small and minority business groups that they are the "backbone of America"?
In the view of many of these companies, Kelman had no qualms about sacrificing equity
And the redress of grievances has become increasingly challenging. Without the General
Services Administration Board of Contract Appeals to adjudicate contact disputes via the
protest process--a casualty of the 1996 Information Technology Management Reform Act--we
run the risk of the government being right, even when it is wrong, in the conduct of a
In fairness, the Claims Court is a viable avenue of redress, if only for large
companies with plenty of financial resources.
But here again, BPAs come into play. Anyone who has been stalled when ferreting out
competitive information to prepare for a federal sales campaign will shudder to think of
the time and money that must be invested to learn the real facts surrounding BPAs. For the
small company, it is a massive effort for which the odds of success are slim.
But expansion of BPAs is only one issue. As a result of Kelman's shrewd, as GCN put it,
use of trade groups to advance his objectives, he has, perhaps, encouraged an environment
in which only the in-crowd brings home the bacon.
Kelman alleviated much of the stress on corporate moguls when he championed past
performance as a major evaluation factor for award. Whether accurate or not, those on the
inside track perceived that consideration of past performance could be swayed easily by a
well-placed nudge. Maybe that was the real meaning of blending contracting with
For the record, past performance has always been a critical evaluation factor for
contracting officers. But when Kelman discovered the term, he decided to, well, reinvent
Now agencies can more easily use past performance to eliminate undesirables from the
contract-award party. A well-entrenched vendor worth its salt can come up with something
to mar the record of pesky would-be competitors not part of the inner circle.
Already, some agencies are beginning to modify or undo some of the reform Kelman began.
On Aug. 20, the Defense Department issued a proposed rule that will revise current
past-performance ideas. Perhaps the FAR and Defense Acquisition Regulation councils can
remedy the damage done thus far without spending too many months and too many dollars. We
will watch and wait.
The United States has a reputation for fair and honest contracting. Unlike many
nations, our federal officials have typically neither taken nor solicited bribes.
But this could all change. Without a firm set of rules, our system of procurement and
contracting becomes less of a system with integrity for all parties and more of a gambling
Perhaps most troublesome is the tendency not to learn from history. Our country has
thrived as the oldest democracy in history, having clocked more than 220 years. We have
succeeded at this largely because of the checks and balances built into our system. Kelman
has removed many of the checks and balances in the acquisition process.
As we bid farewell to Kelman, we must thank him for taking an interest in the business
of federal contracting. He has made many people happy with his initiatives and brought an
aura of glamour to an otherwise mundane piece of the government's work.
After his return to Harvard, with the passage of time, we will all be able to judge
whether his time in Washington was a blessing or a curse.
Lynn Bateman is editor of The Government Contract Adviser and is founder and president
of Government Counseling Ltd. of Alexandria, Va.