Four agencies are running pilot programs to change the way they manage contractors.

The Veterans Affairs, Interior and Education Departments along with the Patent and Trademark Office have set up vendor-management organizations creating a “single door” to doing business with the agency.

“We have an infinite number of front doors,” said Federal Chief Information Officer Steven VanRoekel Friday during a meeting of the President’s Management Advisory Council in Washington. “There are multiple things we can do. One is we look, at least at the agency level, having a single door is a good thing with incentives around small business and other things that I think are smart for the country. I think if we just solved it at the agency level and start to get a single VMO for each agency, or at least major agency components, I think that would greatly reduce the complexity of interacting and [would] streamline and produce a buying phenomenon that we don’t see today.”

VanRoekel said a vendor organization is a concept that industry has used for some time, but now agencies need to start using more regularly.

The Office of Management and Budget has been working with the President’s Management Advisory Council for more than year on a variety of customer service, technology and human resources issues. The council is made up of Fortune 500 CEOs, from Motorola, Symantec, the Red Cross, Viacom and many others.

The goal of the PMA Council is to give agencies advice and discuss the companies’ lessons learned by improving their internal functions from IT to HR. President Obama created the PMA through an executive order in April 2010.

New role for investment boards

The use of VMOs is one area the CEOs and agencies are working together on as a way to improve how agencies and contractor relationships.

VanRoekel said the council also is showing agencies how investment-review boards can help with more than just budgetary exercises.

He said OMB will launch a new effort to look at agencywide portfolios, with the goal of making sure agency technology systems meet the same objectives of the agency’s mission.

“This effort is get to the point about mission creep,” he said. “What we tend to see is that the core infrastructure group that does all the commodity stuff, the bureaus, the offices and the missions out there all have separate objectives at the top. We need to build consistency across that and start to look at how do we sort the funnel to the top three type things? Building a mechanism by which we start to look at that portfolio left to right — what is the mission, objectives, goals, — how are we rolling that in is an effort we are going to do.”

Agencies are further along in developing the vendor management organization.

The VA, which does more than 2,000 contracting actions and spends $3 billion a year on IT annually, has a plan for the next six months to better link what the agency is doing with its contractors and what results it’s getting.

“Who we contract with and how we contract with them has been different from what are we getting out of them and what are we spending,” said Roger Baker, VA’s assistant secretary for information and technology and CIO. “We have to marry that up and view the private sector as more of a managed asset in the way we are delivering things.”

In setting up the VMO, the agency surveyed 20,000 commercial providers to understand what their needs were and how to improve their interaction, said Scott Gould, VA’s deputy secretary.

VA has created an acquisition academy that has trained more than 500 program managers over the last two years and another 700 are on the way by the end of 2012. Gould said they are trained to collaborate with vendors and make sure the systems meet their mission goals.

“We now require for every job over a million dollars our government and vendor team to sit down together and go through training,” Gould said. “Do we understand the requirements? What are the rules of the road? And meet everybody [on the teams]. Do that team building that is so critical.”

Gould and Baker also run an operations review process to bring together IT, program management and support functions to make sure the project team is meeting its milestones and using agile development.

PTO takes VMO to next level

The Patent and Trademark Office started using VMOs before the OMB initiative began.

David Kappos, PTO’s director, said the administration’s focus let the agency expand how it’s using the vendor office.

“We participated in site visits and we’ve learned a lot,” he said. “We are turning our VMO office into a much more central focal point of our IT transformation efforts and management of our business of IT services.”

Kappos said PTO now treats its vendors as part of the team and makes the environment more collaborative.

Over the next six to 12 months, PTO will create a dashboard around vendor performance, giving contractors a view of what metrics the agency is holding them accountable for. Vendors also will have access to the dashboard.

PTO also is undertaking a more rigorous review of vendor skills and resources. Previously, Kappos said they trusted the vendors when they said they were qualified or had the skills to manage IT projects. But now they are looking at these capabilities more closely.

The IRS also is out in front in using VMOs.

VanRoekel said a contractor can’t walk through the door of the agency without first going to the vendor office.

“They have real clarity across the board,” he said. “They are doing a great job. The office is self funded and are very aggressive.”

OMB to create VMO maturity model

Over the next year, VanRoekel wants many other agencies to create VMOs.

“The first step I think we will take and this is after meeting with a lot of agencies and following the onsite visits from a couple of weeks ago is to create a maturity model,” he said. “We’ll use your organizations as the far right and use a lot of the government as the far left and talk about the prescriptive steps we are going to take to get between them and how agencies can work their way up the model.”

The pilot VMOs will help create a template for other agencies to follow in setting the offices up, VAn Roekel added.

In addition to VMOs, agencies also are shifting their use of investment review boards.

The Interior Department already has begun using its review board differently.

David Hayes, Interior’s deputy secretary, said the agency will put all 48 major IT projects through their investment review board to make sure they are meeting the agency’s strategic mission. He said the board will even look at the programs that are running well — meeting cost, schedule and performance goals — to ensure they still meet the agency’s goals.

“The efforts around VMOs and investment review boards very much aligned with our priorities to do more with less,” VanRoekel said. “We have an imperative to really drive a lot of value for the American people by doing that on a flat or declining budget and these are mechanisms to really pull savings across the government, to reinvest into IT and other strategic priorities.”

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