Procurement and Administrative Flexibility

REINVENTION REVOLUTION: REPORT FROM THE FEDERAL-FRONT LINES

Moderator: Steve Klink
Presenters: David Bibb, Deputy Administrator of the Office of Real Property in the Office of Government Wide Policy, General Services Administration
Becky Rhodes, Deputy Associate Administrator for the Office of Transportation and Personal Property, Office of Government Wide Policy, Government Services Administration
Alan Balutis, Director for Budget, Management and Information and Deputy Chief Information Officer, U.S. Department of Commerce
Dr. Steve Kelman, Administrator for Federal Procurement Policy, Office of Management and Budget
Date: Lab - April 8, 1997; April 9, 1997

Steve Klink, as moderator of this session, began by noting that a great deal of folklore exists regarding what you can and cannot do within the arena of procurement. The purpose of this learning lab was to "demystify" the area of procurement and administrative flexibility. To help in this task, Klink assembled a panel of experts in the field to help bring us from fiction into fact. According to the panelists, reforms are taking hold in organizational culture and changing that culture for the better.

GSA Real Property Flexibility

David Bibb began by emphasizing the importance of finding flexibility in existing systems. When GSA entered the world of choice, they entered the world of competition. To effectively compete, GSA implemented "top to bottom, slash and burn" changes. They learned the need for speed, for focus, and the art of the deal.

Bibb reviewed the following areas open to competition:

• Lease Delegation: Acquisition has been made available to all Federal agencies for projects up to the prospectus threshold.
• Lease Management (COR): Emphasizes inspection for lease compliance with terms of lease for services, and for the alteration of space.
• Single Tenant Buildings: Delegation can be negotiated if the Government occupies 90% of the building, or less than 90% with the consent of other tenants. This would cover the day-to-day operations and management of the building, including repairs.
• Projects: Can be delegated when special needs, timing, or when GSA cannot meet security requirements.
• Standing Delegation of Authority: Available to all Federal agencies for reimbursable space alteration projects up to the $100,000 simplified acquisition threshold.

GSA's Re-engineering of the Leasing Process

Introduced in July 1996, "Can't Beat GSA Leasing" is GSA's initiative to "overhaul" existing leasing practices and make government leasing cheaper, faster, and more compatible with private sector real estate customs. While building on lessons learned in other GSA Reinvention labs under NPR, the resultant streamlining has dramatically reduced the average time and expense it takes GSA to obtain leased space. The re-engineered process includes eliminating the use of mandatory appraisals, allowing awards without negotiation, (if appropriate,) and relying on local codes to the maximum extent practical.

In October 1996, the Administrator of General Services delegated authority to the heads of all Federal agencies to perform functions related to the leasing of general purpose space as a further development of the "Can't Beat GSA Leasing" initiative. This step has introduced the element of competition, and has helped GSA's leasing specialists focus better on timeliness and bottom line results.

The "Can't Beat GSA Leasing" Integrated Occupancy Services provides all services required for initial space occupancy through one point of contact, including needs analysis, space planning, telecommunications, furniture purchase, build-out, and move coordination. "Can't Beat GSA Leasing" will improve GSA's responsiveness to clients, reduce the time it takes to lease space, and increase savings. This new leasing program gives PBS employees the tool and training needed to compete successfully against anyone.

GSA's Re-engineering of the Alterations Process

In September of 1996, the PBS Commissioner formed a taskforce of experience PBS staff from throughout the nation, which was chartered with this mission:

To re-engineer and market an enhanced space delivery process for all initial space alterations and alterations within existing space assignments (reimbursable space alterations) in both Federally-owned and existing leased space.

The taskforce's purpose was to improve the space alteration process available to GSA customers by improving timeliness, customer satisfaction, and making GSA their "Provider of Choice". The scope of their mission was to review current policies, practices and procedures for all space alterations under prospectus level and identify opportunities for radical improvement.

"Can't Beat GSA Alterations" has already implemented new program initiatives, including:

• A simplified RWA process including informal estimates and a streamlined RWA form.
• Expanded use of credit cards.
• Final Rule FPMR Amendment issued granting authority to all Federal agencies to accomplish on their own all-reimbursable space alterations up to the $100,000 simplified acquisition threshold.
• Use of Multiple Awards infinite contracts, eliminating delays when a single awardee is at capacity or not performing satisfactorily.
• Use of a Pre-qualified List of Construction Contractors where there is no term contract.

Becky Rhodes, Deputy Associate Administrator for the Office of Transportation and Personal Property, Office of Government Wide Policy, Government Services Administration, reviewed three of her eight areas of responsibility: personal property, travel, and credit card use.

In the personal property arena, Executive Order 12999 authorized direct donations of computer equipment to educational institutions, without going through the interagency property screening normally required for property declared excess to agency/program needs. Additionally, the FPMR has been amended, it is no longer required to screen or report any property with an original acquisition value of less than $5000.

The waiver process has sped up. Waivers are now granted within thirty days for exchange sale and/or the one for one rule of exchange sale. This is a great improvement over the previous nine months to one-year wait. Finally, items that have historically been excluded from exchange sale provisions are being removed, reducing the list from thirty classes of items to twelve, which will still include items such as firearms and guided missiles.

GSA is in the process of rewriting the Federal Travel Regulation in simpler English- using a question and answer format in lieu of the list of regulations to which federal employees are accustomed. Additional and substantive travel reforms include requiring fewer receipts, not requiring receipts for purchases of less than $75 while on travel, eliminating telephone call certifications, and simplifying time keeping records for the first and last day of travel.

Finally, GSA is attempting to integrate into one "smart card" its several credit cards for travel, phone, motor vehicle expenses, and small purchases. This card also would have the capability of being a smart card, in possession of a magnetic stripe, bar-coding and a "chip". A recently issued request for information on the proposed development of the "smart-card" has elicited voluminous commentary from industry players, agencies, unions, and associations. GSA's goal is to reconcile and review all commentary this summer, and to "have the solicitation on the street" by late summer.

How to Make Changes Where You Work: Ideas from OMB

Dr. Steve Kelman, Administrator for Federal Procurement Policy, Office of Management and Budget, shared an anecdote with the conferees that summed up how the general public might view reform in this arena:

"My thirteen year old daughter came into the room and said, ' Daddy, Daddy, procurement reform is on television!' I asked her, 'What did they say?' She replied, 'They said the Government isn't spending $600 for a hammer any more." To Kelman, the challenge of procurement reform is to create highly visible improvements, ones that attract positive outside attention.

Kelman describes procurement people as the government's business advisors, advising their "customers" on price, delivery, quality, and the features or specifications that will unnecessarily raise costs or chase away bids. Kelman advised the audience to develop a relationship with these "business advisors" and to involve them early on in the procurement process. If you find an individual that has not embraced a total commitment to customer service, don't hesitate to talk it out with them. If that doesn't work, take it up the chain of command, because the message coming down the chain of command is "Customer Service".

The Use of Credit Cards:

Too often credit cards were used only for last minute, retail level purchases. The Federal government is the single largest purchaser in the country, to not get better than retail is pathetic, especially on office supplies, computers and commercial supplies.

Contacts have been set up to leverage government purchasing power for items on the GSA schedule. Utilized these options to get these rates:

• GSA Advantage- An on-line catalogue at www.fss.gsa.gov.
• Ex Desktop- Gets 24-hour delivery. Allows for just-in-time supplying, eliminates the cost of warehousing. Contracts with a wide range of suppliers, gives an average %25 discounts from retail. With credit card, purchases can be made over the phone and via CD-ROM, with Internet access coming soon.
• Negotiate -If the price or the delivery time on the GSA schedule doesn't suit your needs, you have the ability to negotiate with any vendor on the GSA schedule to meet your special needs.
• Repetitive purchases- Consider the GSA schedule as a baseline for blanket purchases. Negotiate BPA's with prearranged discounts and delivery schedules.
• Multiple Award Delivery Contacts- If you have frequent purchases that are not on the GSA schedule, select 2 or 3 vendors as your suppliers of "x". Establish standard purchases, and ask for quick bids on special purchase items (24 hrs. -2 days), allowing informal, quick competition amongst these suppliers.

When it comes to purchasing larger ticket items, look to these increasingly common techniques: Allow oral presentations to replace written commentary.

Bringing in the vendor's key personnel to present information allows you to ask questions and get answers on the spot. At Fort Sam Houston, this process has cut lead time in half, with proposals being sent in a standard Federal Express Overnight envelope. Previously, proposals and back-up information would arrive on two dollies loaded with boxes of paperwork.

For details, call the Energy Department Contract Reform Office: (202) 586-0600

Give business to those who give good customer service.

Contractors get report cards called "Past Performance Reviews", USE THEM!

Change your thinking in terms of Performance Based Service Contracting.

Express requirements clearly in terms of what you want. Avoid vague statements like, "Help us with X". Don't get too detailed in your requirements, either, as in "Your position x must have y years of experience doing z". One vendor admitted that he ended up charging a Federal agency twice as much as a typical commercial customer, because the commercial customer told him the desired results up front, and then let him manage getting those results. The government customer typically doesn't give a clear goal, constantly monitors each step and requires costly weekly reports.

For more information on:

Best Practices, fax Dave Muzio at (202) 395-5105
Performance Based Service Contract, fax Linda Messaros at the same number.

Re-engineering the Acquisition Process at the US Department of Commerce

Alan Balutis described re-engineering as a change in the basic way we do business: it requires the willingness of executives to be creative and entrepreneurial in order to survive. The old way of "Follow All Rules", or FAR, isn't the answer if you are over budget or behind schedule.

• All actors should get involved early, so that performance can be measure in terms not only of money and time, but also of quality of product and service.
• Pull the budget, planning, and technology in with procurement planning to eliminate overlap. Re-engineer the process to reduce paperwork and shorten turn around time (using oral presentations and past performance reviews as discussed earlier).
• Open up the lines of communication. Develop greater trust among the team members. Pull industry in at an earlier stage. Utilize technology to speed communication and streamline processes.

The Department of Commerce ran six pilot programs, three at the Patent and Trademark office, and three at the Census Bureau. The Patent and Trademark office opted not to ask for changes in the procurement law. They decided they could re-engineer within the current allowances, by making full use of the authority and waivers under current legislation and regulations. They managed this by thinking in a creative and entrepreneurial fashion.

The Census Bureau developed a $50 billion contract for laptop computers with IBM. By equipping their door-to-door census takers with these computers, they can complete in 18 weeks the work that used to take 12-18 months. Another system they improved was their data dissemination system, with a $30 million contract, which allowed them to complete in just 38 weeks what had previously had been done in 180 weeks (that's 3 years)!

Mr. Balutis closed his comments by reminding the participants of the importance of their actions:

People like you who attend conferences are the change agents who think in creative and entrepreneurial ways.