Buyers Beware of New Flexibility

s Steven Kelman, the former Office of Procurement Policy administrator, returns to the ranks of academe, many in Washington are reflecting on the last four years and questioning whether the pendulum is about to swing back.

Whether or not you support the acquisition reforms put in place during Kelman's tenure, you can't dispute the fact that the federal marketplace is quite different than it was four years ago. In my view, it's in better shape. Procurements are getting faster, and better contracting vehicles such as the GSA schedules and multiple award task order contracts certainly help.

As far back as the early 1990s, people recognized that the system was not working well. It took too long to get things, even everyday things. For acquisitions, the focus was form, not substance. Even the process for informing potential vendors about agency needs was stilted and unproductive. Contracting studies by the Merit Systems Protection Board in 1992 and then-Sen. William Cohen in 1994 pointed to an abundance of rules and a dearth of results.

Seeking Solutions

As of 1993, potential solutions were already under discussion. Some even had been presented to Congress, notably the idea to make it easier to buy commercial, off-the-shelf products. Moreover, policy documents were encouraging greater use of past performance in vendor evaluations and more emphasis on outcomes in writing statements of work. Nevertheless, key members of Congress were not convinced that legislation was needed. They felt the landmark Competition in Contracting Act of the mid-1980s, with its mandate for "full and open competition," afforded agencies an easy means to buy commercial or any other kind of products. "You don't need us, just do it" was their response.

But agencies needed changes in the laws. Kelman played a key role in gaining that recognition and in pushing for more flexibility in business. Many contracting and program officials are following his lead and pushing the envelope to meet needs and get results. The number of innovators is remarkable for a community known for its aversion to risk.

However, many officials remain uncomfortable with flexibility and reluctant to go beyond what the rules address and allow. The Federal Acquisition Streamlining Act (FASA) and the Clinger-Cohen Act have established a new regulatory baseline that even this group can embrace. Today, contracting officials are encouraged to go beyond what's in the new rules, as long the rules are silent on the matter and the proposed action reflects good business judgment and common sense. The following old saw characterizing the openness of various European countries comes to mind:

For Germany, everything is prohibited, except what is permitted.

For England, everything is permitted, except what is prohibited.

For the old Soviet Union, everything is prohibited, even what is permitted.

For France, everything is permitted, even what is prohibited.

Reformers are trying to move the Federal Acquisition Regulation from Germany to England, but there still are some Soviet types around.

Flexibility vs. Fairness

One example of the new flexibility is the FASA section on multiple-award contracts. Under these contracts, an agency makes awards to a number of contractors who then can compete for task orders. Some refer to the initial award as "winning an empty basket."

The administration had asked Congress to provide agencies clear authority for task order services contracting as a way to expedite procurement. Congress agreed, but in FASA expressed a clear preference for the multiple-award technique.

Rather than establishing in law how this competition for tasks should work, FASA required only that awardees be given a "fair opportunity to be considered." In fact, agencies have broad discretion on how to carry out this process. All use streamlined procedures of one kind or another, including quick responses, page limitations, a strong emphasis on past performance and oral presentations. A July 1997 Office of Federal Procurement Policy guide, "Best Practices for Multiple-Award and Task and Delivery Order Contracting" provides useful insights on how to make these contracts work.

The downside to this type of streamlining, however, is that it is easy to question the fairness of this opportunity for contractors, given the discretion available to the agency. Moreover, neither procurement integrity nor most protest rules apply to tasks once the initial award is made.

While risk aversion at the contracting officer level results in a strict interpretation of the rules, a different kind of risk aversion applies to program officials. They want to make wise choices that result in successful outcomes. Who better to select, then, but a brand name? And how much easier is that to do under today's task order procedures?

The challenge to agencies in using streamlined procurements is to see that a "fair opportunity" means just that. If a sufficient number of grievances are raised, that newfound discretion might just disappear.

Allan V. Burman, a former Office of Federal Procurement Policy administrator, is president of Jefferson Solutions in Washington.