Studies: Federal IT Procurement Needs a Smooth Operator

When the U.S. government goes to the market for information technology, various contracting mechanisms come into play. In fact, as IT evolves, contracting follows, witness recent efforts at the General Services Administration to develop special procurement vehicles for both cloud technology and wireless services.

However, a key factor in procurement has as much to do with the people involved in IT acquisitions as with contracting vehicles, say two recent studies dealing with federal contracting.

In general, federal agencies currently lack the type of person who can facilitate major IT acquisitions, according to a report from the FAIR Institute.

“While contracting officers and program managers may partly fill the hole on occasion, no single person is responsible for managing the end-to-end acquisition process and serving as a bridge between customers and suppliers,” said Raj Sharma, CEO of Censeo Consulting Group. Sharma also serves as president of FAIR.

Lack of Coordination

“Right now, there is a missing link in the IT procurement process. There are functional silos where the IT requirement is developed and then handed off to the contracting person,” Sharma told the E-Commerce Times.

“But there really isn’t anyone positioned to bridge those functions, and who can also be engaged early in the requirements phase,” he said.

Federal procurement is currently structured so that acquisition personnel are largely concerned with the process and with contracting details rather than with the overall objective of the IT requirement, notes the FAIR report.

The report, “Building an IT Acquisition Community,” recommends that a new position called the “Information Technology Acquisition Manager” (ITAM) be established within agencies. A cadre of ITAMs at a given department would not necessarily be experts in the details of procurement and contracting, or even be experts in IT.

They would know enough about procurement and IT operations to contribute to those elements of acquisition, but their main role would be as managers to facilitate the entire acquisition process — from developing requirements to procurement and delivery. They would also stay in touch with the vendor community to keep tabs on what is being offered in the market, or what is under development, that would meet the potential requirements of their assigned federal agency.

Three major skills are involved in establishing the acquisition position, according to the report:

• Business acumen: understanding of business principles, in order to both comprehend customer needs and assess market capabilities
• Financial analysis: ability to understand basics of finance in order to analyze supplier costs and deal structures and develop negotiation strategies
• Influencing and persuasion skills: ability to use facts as well as personal savvy to work with others, become a trusted member of teams, and gain the credibility to influence others

“One key element is that the ITAM would have a good sense of business economics that are related to both the vendor and the government buyer,” Sharma said.

Sharma stressed that the new position would not result in an addition to staff at a given agency, nor would it require legislation or any time consuming job classification and authorization process.

“You could do this with existing personnel under current professional standards by training them to act as facilitators and business managers,” he explained.

While the ITAM could be on the staff of the chief information officer, the FAIR report recommends that the position be part of the contracting function.

The creation of acquisition managers for IT procurement could significantly improve contracting efficiency. For example, the roundabout way of accomplishing market research through requests for information could be more focused and take less time as a result of the acquisition manager’s continuous monitoring of the market.

In addition, the business negotiation skills of the ITAM could result in better pricing for government agencies. Currently, Sharma is developing data demonstrating the potential efficiencies.

Procurement Management Needs Support

“Contracting cannot be conducted efficiently if procurement offices lack the staff, training, and funding to perform their jobs well in an environment of ever growing complexity,” says Peter Light, a professor at New York University, in a report on federal management released last week, “Creating High Performance Government: A Once in a Generation Opportunity.”

The NYU report addresses the strengths and weaknesses of federal contracting vehicles such as the blanket purchase agreement (BPA) approach that has been implemented by GSA for some IT related procurements. The study also emphasizes the need for the federal government to employ a sufficient number of well-trained acquisition experts throughout the federal service.

“Federal acquisition capability right now is in desperate shape. There has been a decline in the number of capable people since the 1990s,” Light told the E-Commerce Times.

Reinforcing one of the findings of the FAIR report, Light noted that federal agencies “just don’t have the acquisition integrators who can manage coordination and use” of the products and services acquired by government.

“What we need is an acquisition corps that is paid competitively with the private sector,” he added.

While the NYU report covers a full spectrum of issues related to improving government performance and efficiency, a section of the study deals specifically with IT.

“On the information technology front –where the government spends more than (US)$75 billion per year — the federal purchasing process fails to match best practices of other sectors in the economy,” the report notes.

“Technology investments — like some government contracting generally — are often initiated with little regard for leveraged purchasing opportunities and interoperability between agencies and programs. The Obama administration, though, has taken significant steps to begin addressing the public-private IT gap,” Light says in the report.

Light endorsed the suggestion in the FAIR report that specialized IT acquisition managers be employed by federal agencies.

“Anything that would enhance the capability would be a good idea,” he said. “But I would like to see such a program come through legislation which authorizes those positions and provides for competitive salaries. All too often the private sector can poach federal agencies and attract the best talent away from federal service.”