As we begin 2021, one thing is crystal clear about our government — it spends lots of money to fulfill the many demands and wishes of the American people. While transfer payments to individuals and other levels of government are large, a substantial share of the money the government spends goes to acquire services and goods from the private sector to meet agency missions. How the government goes about acquiring those services and goods matters,...
As we begin 2021, one thing is crystal clear about our government — it spends lots of money to fulfill the many demands and wishes of the American people. While transfer payments to individuals and other levels of government are large, a substantial share of the money the government spends goes to acquire services and goods from the private sector to meet agency missions. How the government goes about acquiring those services and goods matters, and it matters a lot. With that in mind here are three “good government” ideas for the incoming Biden administration to consider that offer both continuity with and change from previous initiatives.
Negotiate prices at task order level, not master contract level
Here’s a widely-known “secret” when it comes to negotiating the price for labor on a master contract like a governmentwide acquisition contract (GWAC) or multiple award contract (MAC) — the hourly rates don’t mean much and aren’t worth the time and effort the government and industry spend haggling over these numbers. Real prices for labor are determined on a task order basis when the government gets specific about requirements and industry feels the heat of competition.
Section 876, Increasing Competition at the Task Order Level in the 2019 defense authorization bill, provides a sensible approach, allowing the government and industry to focus on technical capabilities and ability to perform for the initial competition at the master contract level while specific prices are negotiated at the task order level when real business is on the line. Quickly and broadly implementing the authority, starting with the highest visibility upcoming contracts at GSA like Polaris and including the schedules program, is a relatively easy win for the new administration.
Full implementation of the unpriced services authority reduces government and industry effort at the master contract level by eliminating the negotiation of prices for individual labor categories. The authority also makes it easier for well-qualified small businesses and new entrants to the federal market, many of whom have solutions that offer innovative benefits agencies can’t currently access, to win a seat at the table. More well-qualified industry participants, and especially those with new ideas and approaches, means more competition at the task order level that leads to better solutions and better pricing for agencies.
Change conversation on E-Commerce to make it more relevant
Remember Section 846, “Procurement through commercial e-commerce portals,” in the 2018 NDAA and all the buzz generated among industry trade groups over the potential for an Amazon takeover of federal micro-purchasing habits? There was fierce lobbying of members on the Hill, a flurry of industry days, a report to Congress and then the start of a pilot at GSA that was mostly quiet in the last half of 2020. A new year and a new administration offer an opportunity for a reset.
While the pilot at GSA runs its course and agencies like the Air Force continue to cut individual deals with aggregators and distributors, why doesn’t the incoming administration change the conversation and focus on something more of the moment? Right now, the most exciting innovations in e-commerce aren’t about driving more spend through aggregators but in enabling merchants to cheaply and easily use platforms to create customer connection and capture more of the value from each transaction. The federal government can use billions of dollars in so called tail spend as a strategic asset by pushing it to e-commerce channels that enable small businesses to keep more value from each transaction. The strategic use of this spend would help jump start recovery for many of the firms still reeling from the effects of the pandemic and be a small part of the broader effort to build back better.
Expand use of assisted acquisition services
It is time to acknowledge and embrace the fact that for the government’s largest and most important buys, using assisted acquisition teams like GSA’s FEDSIM and others, produces the best results. These teams of specialists get more opportunities to perfect their craft on highly complex buys than in-house agency contracting shops. For years now, the total dollar value of contract awards handled by assisted acquisition professionals has been steadily climbing, but agency leaders often look down on the use of these outside service providers and cite cost as a chief concern.
Yes, there are fees the assisted acquisition teams charge to recover the cost of providing their services, often a fixed percentage of the acquisition value, but the speed and quality improvements driven by assisted acquisition teams are worth the investment. Large buys handled by these teams have cycle times that are on average six months shorter to award. Industry often comments that assisted acquisition teams help clients put together clearer requirements that lead to better solutions and, ultimately, mission success. As an additional benefit that saves time and cost, industry rarely protests. The total dollar value of assisted acquisitions continues to rise and has done so for the last five years, a clear indication that program offices with funding and mission understand the value proposition.
The quality and speed improvements offered by these teams are of critical importance on large programs with major mission impact. Take, for example, the Department of Defense’s (DoD) Joint Enterprise Defense Infrastructure (JEDI) program where work is still not underway. What if JEDI had been handled by an assisted acquisition team who, in concert with the technical and operational customers at DoD, could have crafted a resilient acquisition strategy able to withstand many competing interests? The answer is that instead of watching our adversaries sprint ahead in emerging technology areas while lawyers argue in court, we’d be delivering the infrastructure our warfighters need to fight and win tomorrow’s battles.
A chance to get off on the right foot for 2021
Each of these “good government” ideas should draw support from across the political spectrum. My experience is that acquisition professionals check their politics at the door and focus on how to be efficient and effective service providers to the program teams charged with fulfilling our government’s most important missions: keeping our country safe, keeping the economy humming, and keeping our people healthy. We can all say cheers to that in 2021.
Alan Thomas is the former commissioner of the Federal Acquisition Service at the General Services Administration and now chief operating officer at IntelliBridge.