Tag Archives: procurement

Why Do We Care That Congress Does Not Pass Appropriations Bills on Time?

The federal government’s fiscal year began on Oct. 1, 2017. As of the date of this post that was 101 days ago. There is still no budget for the full year, just a continuing resolution (CR) that expires on January 19.

So what is a CR? The Government Accountability Office (GAO) defines it as “An appropriation act that provides budget authority for federal agencies, specific activities, or both to continue in operation when Congress and the president have not completed action on the regular appropriation acts by the beginning of the fiscal year.” In recent years we could also define it as “business as usual.” Some folks look at that and say “no problem.” They think that government spends too much anyway, so slowing down government spending is a good thing.

That might make sense if operating the government on continuing resolutions and last-minute omnibus spending bills actually saved money for the taxpayers. Sadly, the opposite is true. Not having a funded budget on Oct. 1 means agencies have to do countless workarounds, many of which cost money. Here are just a few examples of the problems created by the lack of timely appropriations.

New projects are delayed. A CR is exactly what it sounds like – it allows existing programs/projects to continue, often without an increase for inflation and sometimes with a reduction. Unless specifically provided for in the CR, new starts are not allowed. It does not matter how critical the new project might be, or who wants it.

Talent management. Government needs to replace key people who leave. Sometimes having a CR means they have no assurance they will have the money necessary to fill every job. So – being good stewards of the taxpayers’ money and not wanting to violate the Antideficiency Act – government managers hold back a bit to make certain they do not over hire. Sounds good, but what happens when they get the money? Now they have to rush to get the jobs filled. We all know how quickly the federal hiring process produces new hires. So now we have agencies trying to fill jobs quickly using a bad hiring process, overloading the HR staff, and often not getting the jobs filled during the fiscal year. That leads to talent gaps and what appear to be surplus dollars.

Contracts. Agencies cannot award contracts for programs where they have no money (the Antideficiency Act again). That means new contracts are often delayed until after the CR is replaced by a real appropriation act. That can get messy, because it delays the work that agencies need to do and puts an enormous burden on the contracting office staff once the appropriation is actually passed. If an ongoing contract is up for renewal, an agency may have no choice but to issue an extension rather than picking up an option year or awarding a new contract. That creates even more work for the contracting office. The net result is that the government wastes resources. It also causes agency spending to be concentrated in a few months of the year, which, combined with the talent management problem, then leads to the end of year money problem.

End of year money. Every year we see complaints from politicians and in the press about the government’s end of year “spending binge.” People lament the fact that the government appears to not spend money until the last quarter, when it rushes to obligate all of the leftover dollars. Does that happen? Of course. Does it happen because agencies, their leaders and their contracting staff are idiots or incompetent? Of course not. It happens because the budget process is broken. It happens because, like in fiscal 2018, we get a almost a third of the way through the year with no annual appropriation in place. It happens because the process of getting that money from a top line appropriation down through the agency budget process to the program managers who actually manage the money can take even longer. In recent years it has not been unusual for program managers to not know what their actual budget will be until the fiscal year is half gone.

So the answer to the question in the title of this post is that we should all care, because it is certainly no way to run a business, or a government. We have 535 Senators and Representatives who are paid to do a job. Article 1, Section 8 of the U.S. Constitution says “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States….” Whether you think the government spends too much money, or spends too little, or doesn’t spend it in the right way, the bottom line is that federal agencies should begin every fiscal year with a clearly defined budget. Not having that budget defined on day one makes agencies less efficient and costs the taxpayers money.  Virtually no reasonable person, anywhere in the political spectrum, thinks the government should waste taxpayer money.

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Putting a Contract Out on Good Ideas

One of the things bad guys used to do in crime movies was “put a contract out” on someone. Those contracts were not to buy something, they meant hiring someone to kill a person. I was reminded of that phrase when I read a Federal Times article quoting former Defense Secretary Robert Gates. Secretary Gates was discussing IT procurement in the Federal government and said “A sclerotic federal contracting system is not a good match for the fast-evolving information world.”
Becoming rigid and unresponsive; losing the ability to adapt
His concerns about the contracting system being unresponsive, rigid and not adaptable were right on target, but they do not apply solely to information technology procurement. As it is currently structured, the Federal contracting process does not appear to serve anyone particularly well. In fact, the contracting processs is where good ideas often go to die. Many people in government dread dealing with the process because they know they often get nothing like they intended from the process. In effect, we “put out a contract” on the idea and kill it.If a process is cursed by so many people, obviously there is someone who is happy with it and driving it. Right? Not really. I spent nine years running HR for the Defense Logistics Agency. DLA is one of the largest buying agencies in government, with more than 3,000 GS-1102 Contract Specialists. DLA’s contracts staff is superb. They have great training, dedication to the mission, and the resources they need to award over 8,000 contracts and task orders a day. Yet, when I talked with them I found a high level of frustration with the processes they had to use. The Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Supplement (DFARS) are too complex, require too much training to administer, and tilt far (no pun intended) more toward ensuring compliance than flexibility. As the face of the FAR and DFARS, contract specialists bear the brunt of the criticism from agency staff and vendors, yet they are not the reason for the problems. Many of them have not been given the level of training they need and most of them are doing the best they can in a bad system.Agency program managers are generally even less satisfied with the contracting process. Awarding a contract to get work done often requires lengthy documents, estimates of costs that the program managers often cannot deliver without going through the process first to see what the market is charging for those services, and evaluation criteria that are sometimes driven more by convenience than what program managers actually need. Some agencies allow program managers to talk with the firms who are bidding on work. Others say no way. Some encourage extensive program manager involvement in the process, others do not. As a former Fed with 33 years in government, I have to admit I dreaded the contracting slog every time I needed to buy services. It was a maddening process that rarely turned out the way I would have liked.It’s no better on the industry side of the contracting process. Small businesses argue that the scales are tipped against them. Large firms argue that all the good work is going to small business, and mid-sized firms are left in the middle with few people advocating on their behalf. Proposal writers have to deal with Statements of Work and evaluation criteria that often appear to be written on different planets, solicitations that expect responses within a few days, responses to questions that say nothing informative, and amendments that can change everything at the last minute after days of work. Add to that the all-too-frequent solicitations that firms invest thousands or even millions of dollars responding to, only to see them canceled at the last minute without so much as a “sorry about that” from the agency. And – worst of all, some agencies believe talking to firms that might be bidding on work is bad, because they might get information that would help them in the process. The thinking is that if others do not get the same information at the same time, the government is providing an advantage. Rather than comng up with ways to provide more and better information that will lead to better, more complete and more responsive proposals, the government clams up. Think about that. Is that really the way to make the contracting process better?Since it does not appear many people are happy with the process, what is the answer? Some people argue we should use the normal contracting process for routine work, but for high priority programs we should devise new processes that are outside the normal rules. Given the billions of dollars that are invested in so-called routine work, I think that is not the solution. Why have better processes for highly visible work, but a “sclerotic” process for the programs where most of the money is spent? Much like our government human capital programs, our contracting regulations are the product of many years of iterative work.That type of policy development leads to processes that were not designed by anyone – they just happened over a period of decades. In the end, we get a collection of rules and regulations no one would design if they started over, but everyone feels we are stuck with now. The best solution is a rethinking of the contracting process from the ground up, but that is not likely to happen in our current political climate. In the interim, we should learn from the lessons of agencies that are more flexible in their administration of the FAR and DFARS. We should also recognize that good ideas come from government and industry and academia and the non-profit sectors. One set of good ideas is included in a report issued by the Professional Services Council. If representatives of every sector participate, we should be able to use regulatory changes to improve the contracting process enough that it becomes responsive to agency needs, protects the public interest in a fair and open contracting process, and allows industry to have the information it needs to be responsive and deliver best value services to government.
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