Concerns about the Biden administration and federal government procurement
Earlier this week, Steve Schooner, who teaches procurement law at George Washington University Law School, emailed members of the Government Procurement Roundtable, a small group of prominent bearded men. gray public procurement. Schooner’s concern was that the administration had yet to appoint an administrator for the Office of Federal Procurement Policy (OFPP). He wondered if the organization should send a letter to the Biden administration requesting a meeting soon.
In fact, the administration has not been particularly slow in making an appointment. When I was a director of the OFPP under the Clinton administration, I learned of the decision to appoint myself, towards the end of July or the beginning of August of the first year of that administration. My appointment was announced in August and I was not confirmed by the Senate until November. As Schooner notes, Dan Gordon’s appointment under Obama took place around Thanksgiving. And Trump literally waited years to make his nomination.
I am therefore much less worried about the appointment of an OFPP administrator than about the type of person who will be chosen and the procurement priorities of this administration.
At the end of May, the administration announced the goal of increasing the share of federal contract dollars that goes to disadvantaged small businesses (SDBs) by 50% during this period. The supporting language was extremely familiar to those experienced in purchasing. “The federal government is the world’s largest consumer of goods, buying everything from software and elevator services to financial and asset management, and federal purchases are one of our most powerful tools to do this. advance equity and create wealth in underserved communities. “
Anyone familiar with federal procurement knows that there is an ongoing debate about what we are trying to accomplish with the purchasing power of government. Most procurement experts – and I suspect the vast majority of federal officials – want the primary goal of the system to be to get the best possible value, in terms of price and quality, from what the government buys. , in order to respond to the agency’s missions as efficiently as possible.
But there is another powerful point of view, which is that the main purpose of the supply system should be to promote various social goals that are not really related to the supply itself. These suggestions are usually preceded by the words “The government should use its enormous purchasing power to …” followed by a laudable goal such as purchasing products made in the United States, increasing contracts with minority companies or obtaining a higher salary for workers under contract with the government.
When I was at the OFPP, I used to answer: “The government should use its enormous purchasing power to get a good deal for the taxpayer and our agencies.
The pressure to use the procurement system for social purposes occupied much of my time as an OFPP administrator. Shortly after my arrival, the unions, an important constituency for the Democratic Party, demanded that existing contract workers whose company has lost competition be given a “right of first refusal” to work for the new contractor. . I addressed this issue internally within administration, saying it limited the ability of new entrepreneurs to do a good job by limiting their ability to choose employees. I persuaded Leon Panetta, then director of OMB, to support me and to cancel the proposal. (I will never forget what he told me during a one-on-one meeting in his office: “This is fucking communism.”)
There are two problems with making social objectives unrelated to procurement central to the procurement system. The first is that any time you restrict competition to companies that meet these goals, you are likely to increase the prices paid by the government and / or the quality of what is purchased. The second, perhaps even more important, is that you reduce or even eliminate the focus of the system on getting a good deal, as the system’s attention and time is redirected to those other goals. Indeed, over the years, failure to focus on getting a good deal has been the bane of our sourcing system and a major reason for sourcing underperformance.
It should be noted that the government is already far exceeding the statutory target of directing 5% of contract dollars to PSDs. Last year, 10% of contract dollars went to these companies.
If I remember correctly, when the target was first set, the percentage of contract money going to SDBs was well below 5%. The growth of contracts with SDBs has almost certainly been considerably greater than the growth of the SDBs themselves. If the government is to go even deeper into the pool of these entrepreneurs, it is almost certain that they will choose lower quality or more expensive entrepreneurs, because the best ones will have already secured a lot of business. This will increase the costs of focusing on achieving these goals as opposed to the system’s best value goals.
A former senior purchasing official in a Democratic administration, now in industry, told me he had recommended two candidates (both excellent) for the OFPP. To date, he has had no follow-up.
We have some important, better value initiatives that started in the procurement system that really need our attention. Examples include innovative procurement techniques such as procurement challenges / competitions and technical demonstrations (rather than voluminous written proposals), and improving the use of past performance in source selection. The time has also come for an important new initiative that I have advocated to put more emphasis on post-award contract management. And I hope that an OFPP administrator can work to develop – as the career staff of the OFPP admirably pursued – new initiatives to help the system deliver better value.
I admire President Biden and wish I could say I was more optimistic. But I am not. I’m afraid the supply will have a hard time coming.
posted by Steve kelman at Jul 14, 2021 at 9:13
