On June 13, 2011, President Obama issued Executive Order 13576 entitled “Delivering an Efficient, Effective and Accountable Government (“the EO”). On Wednesday afternoon I took time out to study the EO before heading up to Baltimore to see my favorite band, U2, in concert. I headed out with one of my friends—a person who has worked both inside and outside the government procurement system. Not surprisingly given the traffic environment here in DC, the trip to Baltimore ended up taking three hours (Baltimore is less than 40 miles from DC). During our long drive we started talking about the current state of procurement and, inevitably, our discussion turned to the EO. What follows are some reflections on the EO.
The EO focuses on improving transparency and accountability in government operations. It establishes an Accountable Government Initiative and a new Government Accountability and Transparency Board (GATB). The GATB is tasked with providing “strategic direction for enhancing the transparency of Federal spending and advance efforts to detect and remediate fraud, waste, and abuse in Federal programs.” The GATB is to work with the American Recovery and Reinvestment Act’s (ARRA’s) Recovery Accountability and Transparency Board (RATB) to apply “the approaches developed by the RATB across government spending.” This EO cements what many observers of the procurement system predicted when ARRA became law. ARRA’s procurement oversight and transparency provisions are the new normal for the Federal procurement system.
What does this mean for government procurement personnel and contractors? Based on my experience in the private sector, contractor costs will likely increase. During the height of 2009, companies spent untold amounts seeking advice from counsel and accountants to ensure compliance with ARRA’s procurement provisions and to assess risk. So government contract lawyers and accountants will continue to be busy. For government acquisition personnel, the challenge could be much more profound. The governing framework put in place by the GATB and RATB creates the possibility of institutionalizing a management shift where the oversight community exercises fundamental control over the management of the procurement process. Having worked closely with the oversight community during my time at GSA, I understand and respect their role. However, I do believe that to the extent the GATB focuses solely on oversight and transparency as the means to improve the procurement system, such an approach will be counterproductive for the procurement community, the oversight community and ultimately the taxpayer.
Hopefully as the GATB seeks to improve results, it will foster a management framework that focuses on improved requirements development and greater access to commercial products and services. Better requirements development is the foundation for improving results. It enhances competition and leads to effective and efficient contract performance. Access to commercial products and services allows the government to leverage the market place to obtain greater value. Today, commercial item contracting is being hampered by the layering on of additional government requirements. More often than not these new requirements are inconsistent with commercial practice. Inconsistencies with proven commercial practices increase cost and risk for commercial firms. As such, firms will ultimately turn away from the government marketplace. Competition will be reduced and access to the latest commercial technologies, including green technologies, will be limited. The taxpayer cannot afford such a result.
It is time to reinvigorate commercial item contracting. A first step would be a top down review of the contract clauses and requirements that have been layered on commercial item contracting over the last ten years. A second step would be to reform the pricing practices and policies governing the Multiple Award Schedule (MAS) program in light of the Section 863 competitive ordering procedures now in FAR 8.4
One of my favorite U2 songs is “Beautiful Day.” It would indeed be a “beautiful day” for the government and the taxpayer if commercial item contracting were reenergized. Oh yes, we and 80,000 other fans did make it to the concert. U2 put on a great show. Have a great weekend everybody!