Can a data environment actually improve federal procurement?

Sort of lost in all the other activity in the last few months, is a Biden administration proposal to create a new Office of Management and Budget circular. The circular describes a centralized data management strategy to help agencies with acquisition decision-making. One industry group has questions, so the Federal Drive with Tom Temin talked with Stephanie Kostro, the Executive Vice President for Policy at the Professional Services Council.

Interview Transcript: 

Tom Temin They want to talk about a data environment where all kinds of procurement data would be brought together. I thought these things sort of exist now. What’s the council’s take on this proposal?

Stephanie Kostro Well, Tom, thanks so much for raising this issue. It is a big deal for OMB to release a proposed new circular, and particularly to ask the public for comments on it. So while we appreciate the visibility into what they’re thinking, we do have a lot of questions and our comments reflected 5 or 6 of these, and I can go quickly through them now. You’re exactly right. There are data environments that are created agency by agency. And so what this circular does propose to do is create an enterprise wide data system to gather, collect, analyze, access, etc.. Acquisition data. One of the concerns that we have in our government contracting community is who would be authorized to access that data? How would they protect it? As you know, a lot of the cost and pricing data are business sensitive. And so it really does become the competitors competitive edge vis-a-vis their, their the rest of the industry. And so who will access this data, how etc. becomes very, very important.

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Tom Temin One question would it be what’s already publicly available, which is the price of a particular contract. Because contracts are public information. And we bought this much of this from this agency for this much versus how much is bid and range and proprietary information that I guess is recorded by the government, but it’s not supposed to be made public.

Stephanie Kostro That’s a great synopsis of it Tom, because part of it is unpacking sub tier. So your subcontractor, your vendor data. Also, what discounts do you offer to the agency in the course of negotiations. That’s also very, very sensitive. And so the comments that we have focus on access and authorization to get these data out of the system. Another one is sub tier pricing, etc., which can be a challenge for even prime contractors to get oftentimes from their subcontractor. They’ll get a number, but they don’t know what comprises that number. Another issue that we have is what requirements are for one agency are not exactly matched to another agency’s requirements. And so it could be an apples to oranges comparison here. And so how are they training folks accessing this data to actually understand what it is that they’re looking at?

Tom Temin Right. If you’re looking at, say, the data regarding the acquisition of canon printers or something, that’s one thing. But if you’re looking at professional services, those all have a slightly different take and flavor, because no two projects are identical.

Stephanie Kostro And no two individuals are identical. So you may even have one position description for one company, and it requires five years experience. But what you pay one individual is not what you pay another individual. And so again, being able to understand these data to to be able to analyze them. One concern we have, as I mentioned earlier, is how are these folks in the government being trained to look at this data? 100% agree that better contracting initiative, which was rolled out by the administration back in November to save billions of dollars to the American taxpayer. That’s good intent. But the devil is in the details here, and how will they protect the information and how will people understand it? And that’s not clear from the circular.

Tom Temin Besides, I mean, aren’t we sort of ten years into category management and the rise of the IDIQ with hundreds, sometimes scores or hundreds of contractors on them all with pre negotiated pricing? And we’re in a basically task order world now is this needed at this point. This is sort of 1990 ish.

Stephanie Kostro I’m glad you raised that, because one of the comments that we have, and you mentioned IDIQ’s  and government wide acquisition contract vehicles, etc., there has also been a push for lowest price technically acceptable versus best value. That is a conversation that’s been had over the last decade or so. And for me, when I look at how they’re gathering data, collecting it and analyzing it, sharing it, I just hope that this is not a push towards let’s do lowest price technically acceptable, because the best value is where you get those nuances of that five year requirement for an individual that I mentioned earlier, they’re not all created equal, particularly in the services arena. And so we’re watching this very closely to make sure this is not a trend towards LPTA, that it is actually getting the government what they want, what they need as a best value proposition.

Tom Temin We’re speaking with Stephanie Kostro. She is vice president for policy at the Professional Services Council. And I want us to switch topics here and ask you about the, been out now a couple of weeks now, the National Defense Industrial Strategy. I think people were expecting something more aimed at the fact that there’s a shortage of suppliers and of critical commodities needed by the Defense Department. Looked to me like more of a recitation of general supply chain issues and so on. And what was the Professional Services Council take on it?

Stephanie Kostro So we welcomed this first ever industrial base strategy. I was born and raised professionally at the Pentagon. And so for me, a strategy is  endways and means. And the means piece is the resourcing piece. And for me, that’s sort of what’s missing from the strategy. I’m sure that information will come. But you’re right, it does talk a lot about resilient supply chains, making sure they understand as the customer that duty understands it’s, uh, industrial base where they’re getting certain items, etc.. There are other areas that are of high interest to the Professional Services Council. And one focus area in this strategy is workforce readiness. So they talk about a lot about touch, labor, etc., and making sure they can destigmatize production careers for young folks. Because we are the Professional Services Council, we look at the other side of that coin, which is the services piece of it, and we also look at something separate, which is not yet really addressed in the strategy, which is how are you going to train contracting officers within the government or contracting officer representatives in the government to understand technology and what they’re looking at? So we’re looking to the Pentagon to talk a little bit more about workforce readiness in a holistic manner, not just the labor piece.

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Tom Temin Although if you look at what the DoD issue is, it’s not getting software. For example, there’s millions of mediocre software programmers in the country and some really lousy ones that manage to get their stuff into the market. But welders, people that understand how to make a really good complex forging or casting, and the companies to do that kind of stuff with some of the new exotic alloys. That not so much these days.

Stephanie Kostro And one of the focus areas they have, obviously as I mentioned, the stigmatization of those kinds of careers for welders, electricians, etc. They do have a few lines about targeting critical STEM sets. So talking about wanting the government and government contracting work to be attractive to generations, not just a purely commercial work. And that’s where we are seeing some issues within the professional services community of why work for a government contractor if you could work for a purely commercial entity? And so that’s the struggle, to call it a struggle is probably an overstatement, but that is one of the challenges that we’re facing in terms of recruiting, retention, promotion of the next generation of workers.

Tom Temin Yeah, it’s really a balance, because looking at the tanker that the the Defense Department has been trying to buy now, I don’t know if 20, 25 years to get a tanker. There’s a couple copies, I guess, flying of this new one, but it’s really not in mass production yet. You’ve got designers, but then you also have those people on the line that have to make sure the door plugs don’t blow off. That would be bad for a tanker with a fighter flying underneath it. Sorry, but that’s a defense industrial base topic.

Stephanie Kostro 100%. And I also think about those sustainer, the repair personnel who have to be out there, and that’s considered a service. So when we talk about production lines I think that’s great. But you also have to train the workforce to be able to use what’s coming off the production line. Another area, so I’m just so, so we can talk about the two other focus areas of the strategy is flexibility and acquisition authorities. And making sure you have either multiyear procurement authority, etc. This is where we run into who owns the intellectual property. And so we’re working with the Pentagon and folks who are leading the strategy through to implementation about what does it mean for companies? And then the last, the fourth area that we’re looking at is economic deterrence, which is making sure that we are participating in standards, setting bodies, etc.. So it’s a little bit more esoteric than some of the other topics. But as a whole, we are really looking forward to working with the Department of Defense on its implementation plan. We understand that will be classified and that’s fine. But as we move forward, what input can we provide to help them understand from the industry side what these four prongs supply chain, workforce acquisition and economic deterrence, how they impact us.

Tom Temin And not to gloss over that area about standard setting, but China would like to be the country that sets the standards for industrial goods and so on process industries. And it’s always been kind of a United States led and European led type of thing that cedes some economic power when you see the standard setting power, it’s actually a pretty crucial issue.

Stephanie Kostro That’s exactly right. And I think this is also where our alliances and strategic partnerships come into play of who are the folks who are going to be standing with us instead setting those standards when you might be across the table from an economic powerhouse like China. A lot of countries around the world are dependent on China for some of their goods. And so making sure that the US has a very strong voice alongside our partners and allies.

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