Staying on Track

At a recent class for senior managers at Harvard University's John F. Kennedy School of Government, a manager from the Defense Logistics Agency explained how her organization had used performance measures to reorient the agency toward results and customer service. Another participant, a customer of the Defense Department supply system, said he has noticed the difference-the system is serving him better.

The customer, Col. Gregory Biscone, is a wing commander at Minot Air Force Base in North Dakota. He is not in acquisition or contracting. He is far away from the brouhaha in Washington over task orders for Iraq interrogators and IT purchases through the Federal Technology Service. He flies B-52s. "There has been a cultural change in the supply system that serves us," Biscone says about the Air Logistics Center at Tinker Air Force Base in Oklahoma. "People are motivated to do the right thing and to make things happen.

"It used to be that if we had a supply problem, we filled out a form," he says. "Now a supply technician or supervisor can pick up the phone and reach a person at the air logistics center who's responsible for us." Not only are routine supply functions better, allowing the base to have more mission-ready aircraft available, but planes are updated faster with new technology, Biscone says.

That's exactly the kind of feedback Jaime Guerrero, another student in the same class, likes to hear. Guerrero, an avionics engineer with an acquisition role at the Naval Air Systems Command in Patuxent River, Md., says, "If we had continued our old way, having industry manufacture just for us, we would have faced steadily reduced competition, higher prices and less access to the best technology. We encouraged leveraging commercial avionics technology, and modify only as necessary."

The performance-based approach hasn't been easy, Guerrero says. It requires more avionics engineering expertise to assess commercial technologies, he says, and then help industry meet the needs of its military customers. "We have learned from our mistakes and successes, and we get better at it all the time," Guerrero says.

These reports from the field are a welcome reminder of what the last decade of acquisition reform has been all about. A system that had focused on rules, process and "gotcha" was redirected to its basic goal-supporting agencies' missions. By and large, these changes have made the system work better. A survey by students at the Kennedy School of Government shows that government customers are more satisfied with their vendors. On a satisfaction scale of one to 10, the average response in a 2004 survey of program managers who buy IT services was 9.4, compared with 6.9 in a similar study in the late 1980s. Nonetheless, recent news reports suggest that during a decade of tough cultural and business-process changes, the procurement system neglected "boundary systems," a term coined by Harvard Business School professors Robert Simons and Robert Kaplan in a 1995 Harvard Business Review article.

These are the constraints and controls that tell people what they are not allowed to do. Simons and Kaplan argue that boundary systems establish an environment in which people can be given freedom to determine the best ways to achieve an organization's goals. For example, a well-functioning boundary system to prevent credit card abuse creates an environment in which an organization can reap the benefits of using credit cards.

Boundary systems must function so well that people can take them for granted and focus on their goals. But in properly maintaining boundary systems, managers must be careful. Recent headlines about acquisition have sent the message that people should pay attention to avoiding doing the wrong thing. But they say nothing about doing the right thing-looking for better, imaginative ways to do business. These signals can be overinterpreted on the front lines to mean that procurement professionals should be cautious to the point where inaction is preferred over action, should avoid risking anything new and should spend most of their time worrying about the rules. So there is a real risk that the system, and its leaders, will focus on controls, not goals.

In working out the latest contracting problems, acquisition officials must not forget to preserve the improvements of the last decade.