Contracting officers not given tools, support to take risks, be innovative

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Innovation and taking smart risks remain foreign to most federal acquisition workers. But with the recent mini-hiring wave of contracting officers and the retirement of others, experts say now is the time to institute much-needed culture change.

Stan Soloway, the president of the Professional Services Council, an industry association, and a former Defense Department acquisition executive, said there are two big factors that lead him to believe that the time for a culture change is now, or not for another 20 years.

First, he said is the turnover in the contracting workforce. The government is in the early to mid-stages of a complete generational transition of the acquisition workforce. By most estimates, 40 percent of contracting officers and specialists have less than five years of experience.

Meanwhile, 40 percent of the workforce is approaching or at retirement age. Soloway said within the next five or so years, there will be almost a total turnover of the acquisition workforce over the preceding 10-to-15-year period.

“It’s a once in a lifetime opportunity to actually change a culture, an environment and a workforce in any institution. You rarely get this kind of shift,” Soloway said during a press briefing Thursday in Arlington, Virginia. “We’ve been saying in surveys over the last several years is identifying gaps, and if we really got at some of these gaps because they are insignificant and actually proxies for bigger problems, we could really have an enormous effect in a positive way on a workforce that is so critical to the operations of government. Our concern is now that we’ve got 40 percent of the workforce is new and that other next tranche coming in, there is no evidence from this survey that the environment has changed dramatically in terms of capabilities, in terms of opportunities for development and the kinds of professional development they need.”

PSC and Grant Thornton on Thursday released its bi-annual survey to take the temperature of the acquisition workforce.

This year’s survey was a bit different. Not only did PSC and Grant Thornton reach out to the senior leaders in the federal acquisition community, but also the contracting folks in the weeds. The groups also surveyed, though to a lesser extent, industry executives to see how the results matched up.

The call for innovation not being heard

The second reason why there is this opportunity to change the culture is how and what agencies are buying is changing rapidly.

Agencies are buying technologies or services such as cloud or mobile, and are trying to do it differently than ever before in pockets of innovation, whether it’s the General Services Administration’s 18F or the Office of Management and Budget’s U.S. Digital Service office or the Department of Health and Human Services Buyer’s Club.

Experts say that new push can’t just be limited to a few pilots or cutting edge organizations, but something every contracting officer has to have the skills to complete.

The survey also asked about innovation and smart risk taking among acquisition workers. It found there was a disconnect between what senior leaders are calling for and what’s happening on the ground.

Soloway said this was the first the survey asked about the importance of innovation in acquisition, and the response was surprising.

“We asked the respondents to rate in order of importance or priority to them different possible objectives for a given acquisition or procurement, things like cost efficiency and others. Innovation was ranked next to last. Attracting new, non-traditional firms to the market, in other words opening the market’s aperture to new capabilities was dead last. That’s in direct conflict in many ways with a lot of things the leadership has been about, both career and political,” he said. “It highlights a couple of things that we think are really important. One is the risk aversion in the workforce is driven by a sense of lack of support at the higher levels, the lack of incentive to do things different so people are just not going to take risks and innovation does involve some risk. Second, it suggests strongly to us and confirms what we’ve seen elsewhere, there is a growing gap between the end user customer and the buying community.”

Soloway said these latest results jive with the innovation survey PSC did about 18 months ago where it found IT and acquisition officials don’t communicate nearly enough.

For all of these reasons and others, Soloway said a culture change is needed now more than ever.

Respondents say the need for better workforce skills is the biggest inhibitor to innovation.

Phil Kangas, a principal at Grant Thornton, said the budget uncertainty over the last few years also plays a big role in the lack of risk taking among agencies.

“As there’s less and less money to be spent, the acquisition strategies that are being employed are going to tend toward the lower risk ones,” he said. “There’s an increase in the number of protests. There’s an increase in the number of oversight actions. All of those create additional burdens on this community and so what we see because of that is a move toward what is going to be simplest, what’s going to be most easy to execute and that undercuts, often, the innovation that I think is so important.”

Kangas said the survey found the acquisition community believes it’s sharing best practices, but the progress is slow. But the cross discipline sharing — with CIOs or CFOs or human resources — still has a long way to go, he said.

Disconnect around LPTA

Beyond innovation and workforce training, the survey also showed a divide about how agencies are using lowest price technically acceptable (LPTA) to buy products.

The survey found a majority of the federal respondents say they are using LPTA the correct way, and 40 percent say their agency’s ability to select the most appropriate contracting approach has improved.

But Soloway said the industry survey showed that the opposite is true—agencies are too dependent on LPTA. The data shows that both sides may be correct causing a real disconnect, he said.

“Over 40 percent of the respondents acknowledge that they don’t do a very good job in their agencies of setting the technical requirements in a LPTA procurement. The whole point is if I want to buy something I have to set a technical requirement. Well if I don’t set my technical requirements well, nothing else works,” Soloway said. “So I may be using a strategy that sounds like a good strategy but I’m executing it poorly by not being able to define the technical needs. You can’t have a good system process without a good technical requirements and technical explanations and expectations of what you are looking for.”

He added agencies remain too dependent on old approaches or methods and acquisition professionals do not receive the tools, incentives and support to work in new types of procurement environment.

Another surprising finding was around training. It was not so much that acquisition workers say they don’t receive enough training — they don’t — but what stood out was the training they were getting was the right kind.

Respondents say 70 percent of their workforces have average or below average negotiation skills.

About 52 percent of respondents also say their business acumen skills have stayed the same or gotten worse over the last two years.

Soloway said these are the skills that are the core of business relationships and few, if any, training programs are focusing on these capabilities.

“Training is clearly a bigger challenge on the civilian side than it is on the DoD side. DoD has a very robust for training and professional development. We have heard over the course of this survey and in other work we’ve done over the last 18 months with acquisition officials, one told us over a year ago that because of the budget cuts they had completely terminated all of their training, and this was not a small agency,” he said. “The other piece I want to build on is, without trying to be overly harsh, we said this two years ago and it was clear again, DoD has a very substantial training budget, but the message we are getting back from folks across DoD is that the workforce improvement they would expect from the substantial budgets they have is not showing up. There has been some improvements, but they are not getting the training they need. They are getting training.”

Soloway said the situation lends him the opportunity to turn the old DoD adage: “You train as you fight and you fight as you train.” For acquisition, “We are not training our acquisition workforce for the fight they have to wage. We are training them for a world that was, not a world that is or will be.”

Kangas said acquisition professionals say they are not prepared for the new type of buying, like cloud or as-a-service, which goes back to their concerns about innovation and risk taking. He said if contracting officers don’t have the right skills and are bogged down by concerns over auditors and investigations, then they cannot have the room to be innovative.

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