Consultants rush to meet agency performance needs

Consulting firms are ramping up their performance-oriented services to the federal government in anticipation of increased demand for their expertise.

In the last week, Censeo Consulting Group announced a new acquisition training lab, the Performance Institute unveiled plans for a database of management tools, and Booz Allen Hamilton hosted a radio program on performance-based contracting.

All three companies point to what they see as a need for heightened training and awareness of innovative management and contracting techniques.

"There's inertia in the government and industry. We're not used to defining results; we're used to defining activities and processes," said Booz Allen senior associate Mike Cameron.

Performance-based contracts, which are mandated on 40 percent of eligible contracts, usually require contracting officers to shift from outlining the work they want done to specifying only their objectives and giving vendors the freedom to propose various approaches.

Participants on Booz Allen's radio program, which was broadcast on Federal News Radio Wednesday, differed on how close contracting officers should get to vendors. "I'm just afraid, if we use the word partnership…it's almost like a relationship," said David Shea, chief of procurement policy at the Agriculture Department. He suggested that it may cause contracting officers to be overly forgiving of vendors who don't abide by contract terms.

Julia Wise, the General Services Administration's deputy chief of contract policy, stuck up for relationships. "When we say 'partnership,' it doesn't mean we're going to give up rights…it's not that we're taking the reins off," she said.

At a recent acquisition advisory panel, private sector experts urged intimacy between suppliers and vendors.

Tim Laseter, an assistant professor at the University of Virginia's Darden Graduate School of Business Administration and a senior adviser to Censeo, said that Japanese automakers tend to work so closely with their suppliers that they visit their sites and recommend ways to cut costs.

"The cooperation dimension is a fundamental one. There's a huge amount of waste in most customer-supplier relationships, and working together can eliminate a lot of that," he said.

In addition to the new training lab, which will be at Darden, Rajesh Sharma, founder of Censeo, said his firm also is working on a research paper on strategic sourcing with the University of Maryland. Classes are scheduled to start this fall. "You'll be hearing our name more and more," he said.

While performance long has been emphasized in government, at least publicly, the Bush administration's management agenda has propelled performance-based contracting and management tools to the forefront of federal agendas. The 2003 Services Acquisition Reform Act has also increased agencies' focus on innovative contracting tools.

Still, Laseter said some managers continue to resist traditional approaches to acquisition. Those who tend to defy performance-based contracting, he said, are "people who have been in contracting for 30 years, a mid-level manager who spent his whole life doing the FAR [Federal Acquisition Regulation] and making sure they cover their rears." Despite their biases, he said he manages to convert many of them.

On the Booz Allen radio program, Shea said that in order to convince contracting officers to use performance-based contracts, agency leaders have "to create an environment that supports reasonable risk taking."

The Arlington, Va.-based Performance Institute's Web site will allow managers to share performance tools that they have successfully used in program management, the think tank said.