The questions regarding Healthcare.gov and the role the federal procurement system leads this week’s “FAR and Beyond” blog back to one of the Thirteen Thoughts for 2013:  Requirements development –the blocking and tackling of federal procurement!  Just as blocking and tackling are the fundamental keys to winning football, sound requirements development is the key to successful, best value procurement outcomes for customer agencies, contractors and the American people!

It may be too early to fully understand and/or identify the causes behind Healthcare.gov’s current challenges, especially without seeing the contract terms and conditions, including the statement of work.  But what remains true and has been true for close to two decades is that requirements development is the Achilles heel of government procurement.  Forget Low Price Technically Acceptable (LPTA) acquisition strategies, past performance databases and strategic sourcing.  The best, most effective way for the government to acquire high level, best value contractor performance in support of agency missions is through improved requirements development.  Indeed, that is one reason the current strategic sourcing approach is high risk—it focuses on complex, overly broad government-wide Blanket Purchase Agreements rather than focused, well- articulated agency specific Blanket Purchase Agreements.

To his credit, Former OFPP Administrator Dan Gordon’s Myth-Busters campaign was focused on improving requirements development through more effective communication between government and industry.  As stated in Former Administrator Gordon’s February 2, 2011 memorandum:

Access to current market information is critical for agency program managers as they define requirements and for contracting officers as they develop acquisition strategies, seek opportunities for small businesses, and negotiate contract terms.  Our industry partners are often the best source of this information, so productive interactions between federal agencies and our industry partners should be encouraged to ensure that government clearly understands the marketplace and can award a contract or order for an effective solution at a reasonable price.

Perhaps the current situation provides a teachable moment regarding our federal procurement system.  Perhaps the moment will provide the impetus for a review and reform of an overly complex system that creates unnecessary barriers to the commercial marketplace, stifles innovation, and increases costs for all.

Any such review should start with improving requirements development.  The Services Acquisition Reform Act (SARA) 2007 Acquisition Advisory Panel Report still provides a sound, effective foundation for revamping the procurement system.  As the SARA Panel Report noted in a finding on best commercial practices:

Commercial organizations invest the time and resources necessary to understand and define their requirements.  They use multi-disciplinary teams to plan their requirements, conduct competitions forward, and monitor contract performance.  They rely on well-define requirements and competitive awards to reduce prices and obtain innovative, high quality goods and services.  Procurements with clear requirements are far more likely to meet customer needs and be successful in execution.

See page 31, Chapter 1, of the Report.

In response to the above the SARA Panel recommended that:

Current policies mandating acquisition planning should be better enforced.  Agencies must place greater emphasis on defining requirements, structuring solicitations to facilitate competition and fixed price offers, and monitoring contract performance.  Agencies should support requirements development by developing centers of of expertise in requirements analysis and development.  Agencies should then ensure that no acquisition of complex services (e.g. information technology or management) occurs without express advance approval of requirements by the program manager or user and the contracting officer, regardless of which type of acquisition vehicle is used.

The SARA Panel’s recommendation remains timely and should be addressed.  Make no mistake, improving requirements development, especially with regard to information technology, will take a sustained, long term effort across the procurement community. Like blocking and tackling—requirements development is foundational, hard work that leads to success.  Let’s tackle requirements development for the American people!

Next week, more on the costs and complexities of the Federal Acquisition Regulations.  We will address how the “award price” paid will always be lower (a better value) based on the requirements.

Roger Waldron

President