How to innovate in federal contracting

Federal contracting officials, like their state and local government counterparts, find that innovation in public contracting is hard to define, but they know it when they see it. Something else they agree on, in the words of Robert Johnson, procurement manager for the Central Florida Expressway Authority, “Legal runs 10 years behind innovation.”

That comment drew knowing chuckles from government and industry attendees at the National Contract Management Association’s big annual confab in Orlando.

But Tom Sharpe, the commissioner of the Federal Acquisition Service at the General Services Administration, pointed out that law and regulation don’t necessarily stifle innovation. He cited the Treasury Department when Congress gave it billions to stabilize the banking industry after the 2008 crash. Sharpe was Treasury’s acquisition executive at the time.

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He said few people realized at the time that the appropriations language gave Treasury a buy on the Federal Acquisition Regulations (FAR) on the assumption that Treasury would have to act fast. Sharpe said then-Secretary Hank Paulson ruled in favor of sticking with the FAR. Sharpe said several competitive contracts were awarded within days — with General Accountability Office people invited in to keep an eye on things.  And the contracting staff did it all within the FAR.

“Rules can empower contracting people,” Sharpe said.

Veterans Affairs acquisition chief Greg Giddens outlined a middle course. He said process is needed for fair and open contracting. But he said the federal government had added so many checks and balances, and so many approval steps, “we took the simple and made it too complex … with 50 micro-steps” built on to make sure no one makes a mistake. He quipped, once the 50 steps become standard, contracting people become subject to compliance reviews on all 50.

So how do people in the contracting function innovate?

Both federal and state officials agreed, the best way it to wiggle in with program people early in the acquisition cycle so that contracting officers know exactly what it is the program needs or is trying to do. Rosalyn Ingram, the top purchasing official for Florida, said that her shop brings in the largest or leading users of a product or service so contracting can find out what they really needed. She cited the example of “canteen services” requested by the state’s prison authority. “We don’t know anything about canteen services,” Ingram said, so she had her staff invite the prison people in to discuss their requirement.

Sharpe put it this way: “Start early to get clarity on mission needs.”

Keeping contractors and their needs in mind will help contracting innovation succeed too. That’s according to Ben Marglin, a principal with Booz Allen Hamilton who works closely with GSA and other agencies.

“The flip side of innovation is risk,” Marglin said. He advised contracting officers to “think holistically” in assessing risks of contracting strategies by keeping potential vendors in mind.

Adarryl Roberts, the director of the Defense Business Systems Center of Excellence, said innovation is driven by need or crisis. And the federal government faces no lack of stimulus to innovation — tight budgets, turnover in the mid-career ranks, failed software development efforts, and vendors of new technology shying away from the federal market. He advised contracting officials, when they choose a non-traditional strategy, to “stay the course when you’re told you’re being disruptive.” Eventually, he said, you’ll encounter a higher up who will endorse your action.

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