Advertisement

You will be redirected to the page you want to view in  seconds.

Don't be a trend-follower

Jan. 24, 2014 - 02:01PM   |  
By MICHAEL FISCHETTI   |   Comments
Michael P. Fischetti, J.D, CPCM, is executive director of the National Contract Management Association, with membership comprising 115 chapters worldwide. Previously, he was the acquisition executive and head of contracting activity for the Defense Department's Military Healthcare System. Fischetti has more than 30 years of leadership, operations and policy experience across multiple government, civilian and industry sectors.
Michael P. Fischetti, J.D, CPCM, is executive director of the National Contract Management Association, with membership comprising 115 chapters worldwide. Previously, he was the acquisition executive and head of contracting activity for the Defense Department's Military Healthcare System. Fischetti has more than 30 years of leadership, operations and policy experience across multiple government, civilian and industry sectors. ()

We’re all creatures of habit, and to some extent, conformance. If someone starts a new trend, whether in fashion, technology, or business, we tend to follow and embrace it. A similar phenomenon holds true in government contracting. Like the home handyman who can fix anything with just a hammer, we tend to gravitate toward a similar response to any contract requirement.

There was a time when most competitive contracts were single awards. But in an effort to decrease pre-award lead time, contracting innovators looked to the FAR and found that leveraging ID/IQ multiple award contracts could quickly obligate dollars and satisfy customers. After the basic award, a “fair opportunity” process permitted task awards in under a month. Separate, complex proposals analysis (and protests) could be avoided, since that occurred before the basic contract award, with only a small, minimum financial guarantee to each awardee. The volume of work was overwhelming. Agencies throughout the government liked the quick turnaround offered. Soon other agencies offered similar contracts. It seemed a great solution in an environment of decreasing resources.

However, use of these contracts could preclude adequate competition; contractors expended extra resources to compete and “stay in the game” without revenue guarantees; small business participation was challenging; and available sources could be limiting over time. Eventually task orders were opened to protests at some agencies, given that hundreds of millions of dollars were obligated against single orders. A pull back of this contract type began and there is a now a shortage of knowledgeable expertise beyond this contract type.

There have been policy or legislative mandates for particular contract types over the years (i.e., fixed price R&D, award or incentive fee, etc.). Agencies tend to rely on cost reimbursement contracts well after historical data might permit a move to fixed price. Companies rely on a particular business strategy, whether stated in the RFP or not, believing it has worked before. Perpetuation of existing acquisition (or proposal) methodologies in follow-on actions occurs, even as technology, data, or the business environment changes. Remember sealed bidding?

(Page 2 of 2)

Dollars today are shrinking and everyone is reviewing their options. New acquisition and business trends have emerged, sometimes creating heated dialogue. Proposals require different approaches and may be evaluated differently. Everyone must keep on top of these trends and communicate, yet opportunities to do so are few.

I recently heard a senior contracting executive state his goal for all contracting managers to think independently. The requirements to support today’s government are extremely diverse and often complex—the strategies to obtain them should be as well. A good trend might be no clear trends. Each individual requirement should stand on its own, as each one can be very different. The beauty of the FAR’s “toolkit” is its ability to flex toward any government requirement. Thus should today’s acquisition and business strategies. The process should incorporate a variety of strategies depending on the circumstances and merits of each individual situation. Don’t just reach for the hammer— use all the tools.

More In Blogs