The Winding Paths of Reform

number of factors coalesced in the early 1990s to create the impetus for changes in federal acquisition and the vehicles to allow these reforms to develop. Now the interesting question is where these reforms are heading. The wild card in this equation is outsourcing, which will have a major bearing on the federal marketplace for years to come.

"Business works; government doesn't" sums up perceptions about the acquisition environment at the beginning of the decade. Many changes since then have focused on methods for bringing commercial best practices into government contracting.

An activist procurement policy office and a new Pentagon acquisition reform operation helped voice the need for change. A receptive Congress ultimately sealed the deal with legislation such as the 1994 Federal Acquisition Streamlining Act (FASA) and the 1996 Clinger-Cohen Act to streamline processes and reduce administrative burdens. The 1998 Federal Activities Inventory Reform (FAIR) Act has continued this trend by attempting to make it easier for agencies to decide whether government or contractor staff could best accomplish their missions.

Office of Federal Procurement Policy documents dealing with past performance, performance-based service contracting and inherently governmental functions issued in the early 1990s promoted a more results-oriented, commercial-style culture. In particular, the inherently governmental policy revealed that contractors could provide many more services than the common wisdom envisioned. The National Performance Review's emphasis on customer service and reducing red tape both reinforced and expanded these efforts.

Other measures that contributed to significantly reducing procurement lead times and increasing customer satisfaction include:

• The new Federal Acquisition Regulation Part 15 promoting best-value procurements rather than lowest price and oral presentations to cut down on lengthy written proposals;
• The General Services Administration's bold efforts to encourage agencies to use GSA's management and information technology schedules;
• The FASA explosion of governmentwide acquisition contracts (GWACs), which greatly simplify the contracting process.

These paths of reform have are reshaping the way government does business with contractors, moving agencies from arms-length contracting to partnership; rule-bound to streamlined; low price to best value; how-to to outcome-based; over the transom to shared mission; full and open competition to commercial style; award fee to incentive fee; in-house to outsourced.

The prevalence of best-value contracting and the plethora of contracting vehicles that promote task-based procurements alter government and industry approaches. For the government, program and contracting officials are compelled to unite with end-users to define needs and assess the quality of products or services being offered by the contractor. For the private sector, firms must adjust to short-term tasks and projects rather than weighty multi-year procurements. Understanding agency needs and developing good relationships with federal staffers help firms respond quickly and appropriately to new offerings.

As a result, the new acquisition culture is more team-based, value-based, results-driven, project-oriented and relationship-focused

However, this is where we're heading, not where we are. The challenges are many. A team-based approach requires at least some deconstruction of stovepipe organizations, so that program and contracting personnel can genuinely partner. It requires mutual respect, with program officials perceiving contracting officers as more than guardians of the rules. An acceptance of innovation requires more risk than tried-and-true approaches, yet the procurement system for years has militated against risk-taking.

Limited skills for bringing technology to bear on procurement processes as well as a personnel system that fails to promote innovation and reward accomplishment are major challenges. In addition, it's vital that agencies develop metrics that show whether new approaches are in fact accomplishing "better, faster, cheaper" acquisitions. Proven success is the best defense against efforts to dismantle reforms. Finding better ways to allow small businesses to share in the benefits of this new acquisition environment would help to turn an aggrieved party into a proponent for reform.

Recruiting people with the right business and information technology skills and training employees to operate in a team-based, results-oriented environment are two ways to solidify the changes. However, the government's most significant marketplace adjustment will come from looking to private-sector practices.

Outsourcing makes sense for the private sector and it also makes sense for the federal government to focus on its core missions and responsibilities. Unfortunately, implementation of the FAIR Act, which is supposed to help agencies address this important issue, is definitely wanting. Inconsistent, confusing, haphazard and incomplete best describe the process of identifying commercial-type activities that might be outsourced. Straightening out this process may be the government's single most important marketplace challenge.

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