Page 46 - FCW, Nov/Dec 2017

Acquisition
Perhaps the most signi cant overall
coming from the Trump administration government management.
the type of service. For desktops, of cials have provided anecdotal examples of better pricing.
However, the government still has only sporadic data com- paring what it pays for commodities to what large commercial customers do. And for IT hardware, any comparison would be muddied because of the impact of the government’s Buy American constraints.
One key question mark is the impact of consolidation on the government’s endemic problem with the deterioration of
prices over time on IT that is refreshed with new products. Great prices at the time of a contract’s award are gradually replaced by prices that aren’t as good. On theoretical grounds, one could make predictions that consolidation into fewer contracts could speed or retard such price deterioration. That is an empirical question worth watching.
Why didn’t performance improve more?
The obvious question is this: If the system’s culture had changed in a positive direction during this period, why didn’t performance improve more?
My answer is that improvements in the procurement cul- ture coincided with a major decline in resources available for contract management. The culture was getting better, but contract management was getting worse so that we have ended up not noticing net improvements.
Problems with contract management occurred with the downsizing of the procurement workforce that began during the 1990s, when the number of contracting of cials declined by 21 percent. The number of employees at the Defense Contract Management Agency, which mostly works on post- award contract management, declined by half.
In the interests of honesty and completeness, I should note that the reinvention that produced a procurement system more oriented toward performance was also the one that produced cutbacks in the procurement workforce, which prevented improvements in the system from being translated into better performance. If one reads the reinventing govern- ment report, one of the biggest sources of the $108 billion in savings it promised was a 272,000-employee cutback in the federal workforce, a number that often became the headline
recommendation of the entire report.
Although reducing the federal workforce is always popular,
the reinventing government report had a broader rationale. It states that “most of the personnel reductions will be concen- trated on the structures of over-control and micromanage- ment that now bind the federal government,” and it includes procurement specialists and auditors on that list. Procure- ment employees were associated with a focus on compliance rather than performance, hence the link between getting rid of procurement employees and focusing on performance.
Without wishing to de ect blame from myself, I should note that the report was written before I arrived in Washington. I was not involved in the downsizing decision, and it was not something I either defended or criticized publicly or privately at the time. Yet I raised no internal objections, accepting it as an important part of the vice president’s reinvention talking points. In 1993, I did not think about procurement people being important for successfully managing contracts. How- ever, by my last two years in Washington, I had begun to argue that one purpose of streamlining contract awards was to free up resources for post-award contract management.
During the downsizing of the 1990s, procurement spend- ing rose fairly modestly, by 18 percent from 1992 to 2000, and defense procurement spending decreased by 26 percent. A decline in the need for contracting resources during the 1990s — mostly caused by the introduction of government credit cards and IDIQ contracts — probably meant that the resources available for contract management did not decline in those years.
However, a big increase occurred after the 2001 terrorist attacks, with procurement spending more than doubling from 2001 to 2008 in tandem with a similar increase in defense spending. During that time, despite the vast increases in workload, the size of the contracting workforce was almost stagnant; it increased just 8 percent from 2001 to 2008, with no increases at all until 2005.
That situation left the system reeling due to insuf cient management resources. Employment at the Defense Con- tract Management Agency was actually about 20 percent lower in 2008 than 2001, though the workload had doubled.
24 November/December 2017 FCW.COM