The Unfinished Agenda

n debates about procurement policy, voices are being raised in favor of moving the system "back to basics"-back to the traditional focus on constraints rather than best value. If these advocates of turning back the clock were to prevail, our 21st century government could end up with a procurement system more suited to taming the lawless, Wild West of the 19th century. A "back to basics" system would have little chance of giving acquisition strategy and contract management the attention they deserve. Instead it would return to the era of stifling rules and a focus on preventing transgressions rather than on achieving results.

For the government to be successful when it buys products or services, it needs to do three things right. It must first have a good acquisition strategy to figure out what the agency wants to buy and how it intends to buy it. The quality of that strategy should be reflected in the agency's request for proposals. Then, it must select the best company to do the work. Finally, it must manage the contract to maximize the chances that the contractor will deliver value.

Before the reforms of the last decade, the procurement system was not focused on achieving contract success. For starters, the system failed even to emphasize the overriding goal of acquiring best-value products and services for the government. Instead, the focus was on process issues, such as preventing corruption and making sure competitions were as open as possible to all bidders. But these are constraints under which the system needs to operate; they are not the goals of the system. Everyone agrees that government procurement should be managed with integrity, which is analogous to honest accounting in business. But nobody would say the goal of, say, IBM is not to cook the books. Honest accounting (or integrity in government procurement) is not a goal, but a constraint that limits what people may permissibly do in pursuit of their goals. IBM's goal is to make a profit, but in pursuing that goal, IBM may not cook the books.

Managers want employees constantly to focus on achieving the organization's goals. By contrast, they should make sure the constraints-the "thou shalt nots"-are so ingrained that nobody needs to think about them. I spend no time in my personal life thinking about how to avoid murdering people. That doesn't mean it's not important for me to avoid murdering people. But it's not a goal; it's a constraint I operate under. And the less I need to think about it, the better.

There are countries-Paraguay and Nigeria come to mind-where levels of integrity in procurement are so low that they should focus on constraints. But systems in that situation are in trouble, just as I would be if I had to spend lots of psychological energy stopping myself from going on a killing rampage. If so much focus needs to be placed on making sure constraints are working, not much will be left for achieving substantive goals.

The federal government is lucky enough not to be in that situation. But the traditional system, instead of focusing on the substantive goal of achieving best value, was designed for a Paraguay or Nigeria. The first task of the procurement reforms was to focus on what should have been the overriding goal all along-achieving contracting results for the government and for taxpayers.

The second problem with the traditional procurement system was an obsession with the middle phase of the process-the contract award-to the exclusion of acquisition strategy and contract management. This failure was another symptom of focusing on constraints and process rather than goals and results. Source selection and contract award was a stage in which the government could demonstrate features the traditional system most strongly valued-openness, integrity and equal treatment of all bidders. It also was the stage most amenable to regulation, a stark contrast to acquisition strategy and contract management, which were dependent on good business judgment and skills.

The system concentrated so much of the psychic and intellectual energy of contracting people on source selection that there was little energy left for anything else. In buying offices, a palpable sense of relief accompanied the award of a contract. It was seen as the end of a lengthy process, and people longed to get the effort behind them, forgetting that crucial work in assuring successful contract performance still remained. The process-laden source selection process was so drawn-out and unwieldy that the system had few bodies left for anything else. Program managers, furious at the arcane demands of source selection, also demanded all resources be directed to that stage of the process so contracts could be awarded sometime within their lifetimes. The result was a steady stream of General Accounting Office and other reports documenting the system's lack of attention to acquisition strategy and contract management. Source selection was not only extraordinarily overregulated, but many practices-most notoriously the unwillingness, in the name of "fairness," to consider contractors' past performance-were ill-suited to achieving what should have been the main goal: selecting the best vendor.

Credit cards for small purchases, streamlined buying vehicles such as General Services Administration schedules, and deregulation of source selection were all designed to reduce the resources devoted to contract award. They were designed to get contracts out the door and make purchases faster, thereby making program managers happy and helping agencies accomplish their missions. Some of the deregulation, such as use of past performance and new negotiating authorities for the government, also has increased the government's chances of landing a good contractor and a good deal.

Above all, the reform effort tried to send the message to contracting people that their job wasn't just to follow the rules. They had important responsibilities as the government's business advisers during acquisition strategy and contract management, as well. On the front end, reforms spurred government procurement offices to give much more attention to areas such as performance measures for contractors, the use of incentives to encourage good performance, and leveraging the government's considerable buying power. During contract management, the buying corps needed to focus on measuring contractors' performance and building effective government-contractor teams.

This transformation is under way, but it is definitely unfinished. Workforce downsizing (which emanated partly from the Clinton administration and partly from congressional Republicans) meant that resources freed up by the changes in source selection went to managing the system with fewer people. The major culture change ordained by the new rules requires more training and, above all, a consistent message from procurement leaders promoting transformation. Making these reforms a reality is a worthy ambition for procurement executives in the next decade.

Not surprisingly, most of those making "back to basics" procurement arguments are procurement lawyers. Lawyers have a lot to say about constraints, but not much to say about how to achieve the system's substantive goals. That's the domain of experts in business and management. The rule of law is a surely wonderful thing, and the constraints lawyers focus on represent important ethical values. But particularly in an era of competitive sourcing, when contracting is likely to increase, there is too much unfinished substantive work to do to improve government acquisition to permit any distraction from the effort to transform the procurement system. Let's not turn a buying system that increasingly supports business and mission results back into one obsessed with rules and bureaucracy.