Abstract
The Federal Government always has an ongoing series of initiatives aimed at stimulating the economy and the job market, renewing U. S. infrastructure and making the government more efficient.
As numerous articles and reports have pointed out, performing this work requires major effort by trained, experienced government procurement and oversight personnel. Unfortunately, it is generally acknowledged that because of past funding constraints and retirements, sufficient experienced government personnel does not exist to perform the government's procurement business today, even without major new requirements.
One critical indicator appears in the Department of Defense’s 2010 Quadrennial Defense Review, which reported that the number of Defense acquisition professionals had declined by 10 percent during a decade that saw contractual obligations triple.(p.27 of the Final Report, Commission on Wartime Contracting)(See also the End Note 1, Excerpts and Comments regarding a Coast Guard Procurement and the assigned Contracting Officer, as an example.)
The reaction of Congress to this problem has been generally funding to "hire more procurement personnel". While this is a needed starting point, this will not solve the problem—neither short-term nor long-term. Indeed no one seems to be doing serious thinking about the problem—just hire more people.
This is a multifaceted problem, with multifaceted solutions. It requires thought, discussion, and analysis to affect realistic solutions. It requires respect for many divergent views and issues. It is not just an issue of the government hiring more people.
There is no quick fix. But the problem can unquestionably be solved long-term if it is understood. Understanding it requires effort.
And this problem greatly affects contractors who should care about it being solved because it affects them so directly as well. This not just the government’s problem.
1. Impact on Contractors
This government contracting personnel problem is very serious for contractors and their management. They must deal with these new contracting officers and inexperienced personnel—they can create problem contracts that have disastrous impact on contractors—including staggering losses and default terminations. (See e.g. Trust Title Company v. United States, (Ct of Fed Cl 2015), aff’d per cir., cert denied). These not thought through action often include:
a. Change orders are issued, but there is no recognition of item or funding for them.
b. Delays exist which are the government’s responsibility, yet the contractor is ordered to finish by the assigned scheduled date. This is a classic, but often unrecognized acceleration.
c. Inexperienced contracting officers are therefore a danger to a contractor’s work on a program, and, if a large contract, a danger to the company’s long-term viability and existence.
Contractors must identify these “inexperienced” personnel before they start performance—so they can protect their companies. What can they do?
a. They can and should assign their most experienced own contract administration personnel to a contract with an inexperienced government contracting officer (or contracting officer representatives).
b. They must be constantly on alert for an unknowing constructive change activity being undertaken by the inexperienced government contracting personnel.
c. They must be giving written notices of all government delaying events and actions (whether or not the government personnel agrees), so as to protect the contractor’s schedule and avoid a potential default termination.
2. What is NOT the Problem.
An initial step in solving these problems is determining who is “trained, experienced procurement personnel” who we all wish to have available to do the government's procurement work.
Most people think of this as a long-term government employee who has been placing and administering many contracts for many years. That is an appropriate attempt at a definition, but it only satisfies half of the need in terms of experience: do we know what these “experienced” people are really doing every day?
For many years, experienced government personnel, because of time pressure and lack of support, have placed much of their emphasis on the "form" of procurement—getting contracts placed, using the right boilerplate terms and conditions, getting contractors paid on time, trying to ensure that there is some initial competition for the work, and making sure the contractor finishes the work on time. This pressured approach to "getting the work placed"/"getting the work performed" is often in the nature of a paperwork production line effort. (Fixes to the whole paperwork production line approach are a separate issue for a separate discussion.)
Unfortunately, the production line approach itself misses at least half of the real need—having experienced procurement people actually providing:
a. Oversight of the performance process, who understand what contractors are really doing when they perform government work,
b. Knowledge and action to prevent inappropriate activities that contractors are performing, and
c. Proactive work to ensure that the government gets the most from contractors for its procurement dollars spent.
These needs overlap—but it is the focus that is important—knowing and anticipating what contractors are doing or not doing. After years in the job, good contracting officers understand this—they learn it from on the job training. It could be trained for—but it generally is not.
Again, see the Coast Guard contract excerpts in the end note. Can’t we do better than this? Can we train people to do a through c above? Of course, we can, but we are not doing it today.
3. The Use of Subject Matter Experts (SMEs).
Enter the missing link in federal procurements—the SMEs. In many other areas in the federal government (and private industry), it is customary to use "subject matter experts" or SMEs. If you want to prepare a training video for a group of soldiers to perform a type of Special Forces extraction operation, you hire a retired sergeant who has been there and done that to do the training video. They are the subject matter experts, and the government routinely procures this type of service.
Along these same lines, it is primarily contractor personnel and their representatives and advisers who understand the contractor's motivations and methods of operation. These contractor personnel are actually the "subject matter" experts on major elements of federal procurement. Yet they are routinely disregarded as a resource by the federal government in the procurement area. When they offer to help—they are disregarded as having “only practical knowledge” or just experienced in “disputes”, etc.
When only government people are used as “subject matter experts” on procurements (and training), no more than half the needed knowledge needed is provided. The author knows, he has been there, tried to help, and been rejected as having only “practical, contractor side knowledge”.
Do we need that contractor SME knowledge to improve the federal procurement process? Of course, we do.
The Commission on Wartime Contracting Final Report ( p.29) (2011) recognized this issue:
This heavy reliance on contractors requires a fully capable and fully deployable acquisition infrastructure and workforce. In addition, non-acquisition officials who possess the necessary subject-matter expertise to perform requirement analysis, program management, and contractor oversight are especially needed.
4. Oversight for Fraud, Waste, and Abuse (FWA).
A closely related problem which is a most pressing need today is again not in the mechanics of doing the procurement, rather it is in knowledge-based oversight of the procurement to ensure that there is no "fraud waste and abuse" in the procurement itself. “Fraud” oversight is most often handled by the Justice Department, and the “waste and abuse” portion is most often handled by the agency Inspector Generals. These agencies also desperately need "subject matter experts" in order to perform their tasks effectively. They cannot get that from government employees only who have been pressured over the years to emphasize “form over substance"—get the contract placed and performed, then worry about oversight later. [See FWA End Note.]
5. Some Interim Conclusions
So we currently have exactly the wrong approach to quality procurement and quality oversight. Government employees are overwhelmed by paperwork obligations. They have no time, and little knowledge to perform effective proactive contract oversight. Neither procurement agencies, the Justice Department nor the Inspector Generals have adequate access to "subject matter experts" outside the government. Government employees alone cannot provide this “subject matter expert" knowledge. They often do not know what contractors are doing, their approach, measures, etc.
What must be done to solve this problem?
6. Some Real Solutions—And Analysis to Get There.
The author certainly does not have all the answers. But there are some obvious building blocks to solve the problems.
a. Recognize Good Procurement is Not a Production Line for Paper.
Hiring more people to eventually become experienced procurement personnel, but letting agencies do this in a business as usual approach as in the past will not work. The emphasis cannot be just on having a type of production line worker to place procurement paperwork. That is what exists today. That is exactly the wrong approach. The government must acknowledge this problem, own it, and move on to something better.
b. And Then Recognize Form is of Secondary Importance To Quality Procurement Work.
There must be major emphasis on proactive oversight by new and existing personnel in the contracting area. When one thinks about it, the form of the procurement should be done electronically by a computer system and take little effort—the major amount of effort should be on oversight.
This is exactly the way it occurs in private industry. "Form" of the procurement is largely ignored in private industry. Oversight predominates because that is how the commercial operation gets maximum value for its procurement dollar.
Of course, the Federal Government has unique requirements. That does not mean it cannot learn from private industry's approach, which is almost completely economically motivated—getting the most value for the dollar spent. Should that not be the government’s motivation too?
c. Existing Government Training
From a training point of view for new hires and existing government employees, there is a hodgepodge of training sources. Although the government has high-quality training venues, they do not appear to be well integrated, nor do they have the knowledge resources to get the job done because they lack industry experienced SME’s. Therefore they are only training to half the subjects or less. Government people from the “production line” of forms era, should not be the only trainers—again only one-half or less of the needed knowledge will be trained to.
d. Existing Private Training.
It must also be recognized that there are numerous outside private training courses in existence and vendors for them. Much of this training and coursework is fairly generalized in the procurement area. It does not address the problems set out above. It does not itself have any oversight or integration of content government-wide.
It is good training for refreshing knowledge or orienting new procurement people, but does not deal with the problems above.
e. An Integrated Approach.
The government is making a major mistake in thinking that Army procurement is different from defense procurement and that defense procurement is different from NASA procurement or Interior Department procurement. The important oversight functions in procurement are largely the same government-wide. Breaking up most procurement training by agencies, by civilian and defense, or supply and construction make no sense whatever.
Of course, the boilerplate form operation may have differences between agencies, but that is much easier to deal with and there is clearly some need for specialized agency training. None of that detracts from the fact that procurement oversight is a government-wide operation and should be largely trained for in that fashion.
7. Bottom Line.
a. Short-Term Fix
The Federal Government needs massive amounts of training for new procurement personnel and training must be largely in the oversight area. Form filling out can be readily accomplished for contracts by computer programs. It is not the real problem.
If the government does not make this effort in training for oversight functions, massive dollars will be squandered in fraud, waste, and abuse situations. Some of the shortfalls in training and experience can be satisfied by the use of "subject matter experts’ to aid and assist existing personnel.
b. On A Long-Term Basis.
The government must integrate its overall training functions for procurement personnel. It is time to merge most existing training functions. Having numerous different agencies and “schools” engaged in training functions is wasteful and does not get the job done. It promotes disparity in treatment and inefficiency by an agency attempting to live in its own little world and training only to their perceived needs and requirements. The oversight requirements are not just the agency's own little world. They are government-wide and worldwide today.
[
* * *
End Notes
1. Excerpts: The Government Shortage of Contracting Officers. New York Times, July 5, 2007.
* * *
Cathy Martindale, a government contracting officer, darted between meetings about three Coast Guard ship programs, negotiating prices for proposed changes and monitoring contractors' compliance with their deals.
Martindale's job was to track the projects at the heart of the Coast Guard's $24 billion modernization project, known as Deepwater. She attended meetings about design and engineering changes for the ships -- one of which, at 418 feet, is the largest the Coast Guard has ever built. When a dispute emerged about contract terms, Martindale mediated, interpreting the terms and ensuring that companies complied.
"So I am there, always on my toes, trying to pay attention to make sure the path they are heading down is consistent with the contract," Martindale said.
But the job required 12- to 14-hour workdays. She traveled 15 days a month. And when she found that she needed to be two places at once, she decided it was time to plead for help. "I realized there's not going to be light around the corner," she said. "I could work 24/7 and would not catch up."
Martindale, 43, is among a group of procurement officers struggling to keep pace with increasing demands to oversee billions of dollars in spending by the Pentagon and civilian agencies. Although she and her colleagues play pivotal roles in the government's operation, their plight has received little attention even as the government continues to expand its reliance on private companies and embarks on increasingly complicated programs.
* * *
Comments on above: This contracting officer, no matter how dedicated, had no chance. The private contractor would have at least twenty equivalent people on the other side, outperforming her on every issue. That is a disaster for the taxpayers—and it was—just google the Coast Guard Deepwater Program, and get ready to be disgusted.
Think what kind of training and progressive experience a person put in this highly responsible position for the government would need. And think what real backup and support staff would be necessary. SMEs?
2. End Note regarding Fraud, Waste, and Abuse
a) Fraud (stealing from the government in procurements in overt or clever ways) is as old as civilization. There is a small percentage of contractors, who lack moral scruples, who do this.
Look how General U.S. Grant summed it up when he was a captain in the Mexican-American War in the 1840’s:
* * *
The army was but indifferently supplied with transportation. Wagons and harness could easily be supplied from the north, but mules and horses could not so readily be brought. The American traders and Mexican smugglers came to the relief. Contracts were made for mules at from eight to eleven dollars each. The smugglers furnished the animals and took their pay in goods of the description before mentioned. I doubt whether they paid anything but their own time in procuring them. Such is trade; such is war. The government paid in hard cash to the contractor the stipulated price.
* * *
Memoirs and Selected Letters of U.S. Grant, Library of America Ed. 1990, Pg. 57.
b) Waste and Abuse by the contractor and the government is just as old. But it is unlike fraud, which is virtually exclusively a contractor problem. It is most often the government’s problem and creation
What is it when a contractor complies with the contract but produces something it knows is of little use, without fighting to get the government to terminate the procurement? Waste and Abuse.
And what is it when the government fails to decide exactly what item it wants but lets a cost type contract to procure the item, so it can decide later? Waste and Abuse.
The point here? Waste and Abuse is a two-way street, not just contractors doing it. It is not fraud, nor actionable as such. But it is rampant in the government procurement system. And extremely hard to identify and stop. Some would say it is part of having a bureaucracy—where no one—including Congress—is really responsible for anything. But that is a topic for another discussion, paper and another day.
Additional Resources in this Section: