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Put the contracting focus on best practices

Apr. 14, 2014 - 01:32PM   |  
By MICHAEL FISCHETTI   |   Comments
Michael Fischetti is the Executive Director of the National Contract Management Association.
Michael Fischetti is the Executive Director of the National Contract Management Association. (File)

Recent program failures, government/industry communication challenges, Government Accountability Office and inspector general reports, the “lowest price technically acceptable” (LPTA) controversy, new legislation, and funding uncertainty all command attention by government, industry, and media alike. Contracting executives and managers are focusing on promoting long-term contracting best practices into the core of their enterprise. This includes addressing contractual impacts of program reductions and developing an effective acquisition ethical culture that incorporates balanced oversight.

Reduced or uncertain funding is stretching delivery schedules, reducing quantities, and creating higher unit prices for less capability. Successfully defining, analyzing, and negotiating those changes will mitigate that lost capability. Awarding new or modifying existing contracts depends on well-articulated, revised requirements. If basic program goals and an agency strategy to get there is unknown, the downstream contracting results will reflect that. As the internal and external challenges grow and ethical lapses during the recent higher spending past become known, ensuring proper integrity to the contracting process becomes paramount.

Today’s impediments are many:

» A hiring process that inhibits contract manager discretion to ensure there are professionals they want with the business acumen and higher standards for leadership positions they need;
» Distracting legislative proposals addressing targeted solutions to problems lacking consensus;
» An uncertain funding environment with continuous uncertainty and thus moving contracting baselines;
» The difficulties of obtaining technical data packages necessary to break out competition from sole source systems;
» Arbitrary increases to small business goals when existing goals remain unmet, and;
» Minimizing post-award review by many external to the process.

Asking contracting managers to take risks requires supporting them, even when the result isn’t favorable. Using the right contract type in the right circumstance requires looking at each need independently and not just what is trending at the time.

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New laws, regulations, and government or industry initiatives spotlight the known need to ensure the following:

» Improved requirements definition;
» Greater affordability (including rigorous cost control);
» Eliminating unproductive processes and bureaucracy;
» Promoting greater competition, including “breaking out” competitive requirements from sole source systems;
» Improved government understanding of its own requirements;
» Greater small business participation (including a more rigorous mentor-protégé program) and opportunities;
» Establishing longer-term government/contractor business relationships and communication;
» Empowering managers with the ability to hire the best people;
» Incentivizing productivity and innovation across industry as well as government;
» Raising the bar of professionalism across the board within government and industry;
» Detailed “portfolio analysis” or “strategic sourcing” that addresses organizational “rice bowls” within government and industry that prohibit significant progress;
» Giving program and contract managers time to manage “down” as well as “up”;
» Addressing the need to start very early with acquisition planning, including the strategic role of planning in overall agency long-term strategy (including the actual development of an agency acquisition strategy), and;
» Tight prime contractor management of its subcontractors, where the majority of contract dollars end up.

As a source selection strategy, LPTA is proper for the following:

» When properly defining “acceptability;”
» Encouraging primes to apply similar rigors to their subcontractors;
» Keeping a lid on “other direct costs;”
» Improving the writing of requirements and validating them to ensure against gold-plating and directing to minimal sources;
» Better reporting of program performance to facilitate contract delivery adjustments, and;
» Better conducting of market research.

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These are many of the difficult areas where contracting executives must implement best practices. They are in-the-weeds best practices defying easy or quick-hit, top-down solutions. It isn’t a matter of issuing a memo and offering a class; of writing a clause or giving a speech. It requires day-to-day, tenacious review of documents, countless verbal and written promotion up, down, and sideways within the organization for each one of thousands of contracting actions every week, month, and year; convincing top, lower, and peer leaders and organizations that adoption of each contracting improvement is an investment with great potential, albeit future, returns through improved contract (and therefore program) performance, but at the cost of more upfront action now.

Great leaders will hire great managers and professional staff if permitted and incentivized, employing their professional requisite knowledge and expertise over time to slowly change the technical, but more important, culture of the company, bureau, and program. Support by all involved to all of those contracting leaders that any organization should be lucky enough to already possess, as they focus on the difficult implementation of these roll-up-your-sleeves best practices, is what all of us should be focused on!

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