Page 52 - FCW, August 2017

TheLectern
Could ‘microconsulting’ disrupt
government contracting?
Short engagements priced under the micropurchase threshold could be just the sort of disruptive innovation agencies need
BY STEVE KELMAN
I have never been a fan of contrac- tor bashing. I believe there is nothing wrong with making a profit, and I do not believe that contractors typically spend their days dreaming up ways to cheat the government.
Indeed, I even believe that many contractor employees and managers are deeply committed to the missions of the organizations they work for and get satisfaction from helping citizens and society through their organizations’ efforts.
Even when I worked for the gov- ernment 20 years ago, I was a strong advocate for bringing more suppliers into government contracting that pri- marily sold to the commercial market- place. At a strategic level, one of the main goals of the procurement reform efforts of the 1990s was to reduce bar- riers to entry for commercial firms created by government procurement rules — in terms of the complexity of the process and with regard to some oversight requirements that were bur- densome or expensive for contractors to comply with.
I believe we made progress in both areas, but for whatever reason, those efforts did not produce the entry of a significant number of new players into the federal marketplace. I am inclined to disagree with those who argue that those changes did not facili- tate the entry of new commercial firms
because they ended up getting signifi- cantly diluted or reversed.
I worry that, for a period at least, some of the reforms, particularly regarding oversight, were used more effectively by longtime defense con- tractors than by new firms from the commercial world.
If anything, my worry about the exis- tence of a government contracting eco- system separate from the commercial world has grown since the 1990s. It is extremely distressing and depressing to know that the top five IT vendors to the federal government are companies that sell only to the government, according to Washington Technology’s latest list. Four of the five are defense contractors rather than firms that an ordinary per- son would recognize as IT companies.
My reasons for concern about this phenomenon have shifted since I served in government. At that time, I was mainly concerned about insuf- ficient performance pressures on contractors. Firms dealing in the commercial marketplace were used to an environment in which, if you performed well, it was easier to get repeat business than in government — because of procurement policy efforts for a level playing field.
If you did not perform for a com- mercial customer, you got dumped — compared to a less demanding govern- ment world in which efforts to hold
contractors accountable were often met by lawsuits.
I still believe that is an important reason to seek to open the govern- ment marketplace to more commercial suppliers, but now a different reason looms larger for me. The barriers to entry in the government marketplace insulate existing contractors from truly vigorous competition from new play- ers, which are often newer firms or startups.
In the comfortable environment of limited competition inside the gov- ernment bubble, it is far easier for old practices to persist well beyond their use-by date and far less likely for dis- ruptive innovations to be developed.
Such innovations could improve what the government receives and could cut the government’s costs not by 10 percent but by much larger amounts or dramatically improve the effectiveness of what is delivered. One example, which I have blogged about, is Elon Musk’s SpaceX, which has chal- lenged the cozy world of the Boeing/ Lockheed Martin space launches with a disruptive technology that has cut costs in half.
And last week the New York Times ran a story about a startup that has developed a technology for allow- ing spy satellites, such as those that fly over North Korea, to take pictures at night and through cloud cover, and
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