Acquisition executives figuring out how to deal with budget woes

Wednesday - 10/3/2012, 6:00am EDT

Joe Jordan, administrator, Office of Federal Procurement Policy

Download mp3

Agency chief acquisition officers are not playing a big role in planning for sequestration or even future budget cuts.

An exclusive Federal News Radio survey of federal CAOs and senior procurement executives found 57 percent of the respondents said they are not preparing for smaller budgets.

Joe Jordan, the administrator of the Office of Federal Procurement Policy, said the survey responses weren't that surprising.

Joe Jordan, administrator, Office of Federal Procurement Policy

"With the budget situation overall, agencies have some good foreknowledge usually into what their agency's budget will look like," Jordan said in an exclusive interview on In-Depth with Francis Rose. "The important thing is to make sure that planning is integral to the acquisition process overall, make sure agencies are doing good acquisition forecasting, creating robust plans and conducting the appropriate market research, so they can cast a wide net for new businesses that can deliver the goods and services they need in the best possible way."

About 15 percent of the 53 CAOs and SPEs responded to Federal News Radio's questions conducted in August 2012. This is the a second biannual survey of CAOs.

The latest survey covered a range of topics from how contracting executives are preparing for budget cuts to the Mythbusters campaign to bid protests.

But just because CAOs and SPEs are not planning for sequestration or further budget cuts, it doesn't mean they are not concerned.

One respondent said the reduced budget would negatively impact their acquisition workforce.

"With the graying of the workforce and the inability to recruit and train new acquisition staff, we will be in real trouble very quickly. Already the years of the mantra 'do more with less' have stretched us to the breaking point," wrote one respondent to the survey.

Future planning

Jordan said OFPP is working with agencies as they plan their fiscal 2014 budget and beyond.

He said the use of strategic sourcing contracts or other areas where planning ahead can pay huge dividends.

Text continues after chart.



Click to make larger.

"Agencies are looking at all of the things they buy, how they currently procure those goods and services and taking a real hard look at whether there are innovative ways we could do things differently," he said.

Jordan said the soon-to-be released multiple-award database is an example of how OFPP is helping agencies look at things differently.

"I think multi-agency and multiple-award contracts are great things and can drive better value and increased efficiency," Jordan said. "But I do know for far too long these have been done in not a fully baked, thoughtful way and somewhat duplicative. Great strides have been made in this administration with the creation of the business case process. Right now, we are syndicating with agencies for their view and comment the framework of what this interagency contracting directory would look like."

Almost half of the CAOs and SPEs respondents say they are looking to interagency, multiple-award contracts as a way to deal with budget cuts.

Jordan said with more agencies looking at MACs, the new regulations letting departments set-aside task orders for small firms could have a big impact.

Jordan and Karen Mills, administrator of the Small Business Administration, issued a memo in June highlighting different tools to improve small business contracting, including the new task order set-aside authority.

Agencies have missed the governmentwide 23 percent small business goal in fiscal 2011 for the sixth year in a row.

Jordan said as much as it's about having the right tools, it's really about changing the culture of agencies.

"It's been so important for the last few years to be engaging senior agency leadership on this issue," he said. "Deputy secretaries have come to the White House and met with Valerie Jarrett and others senior advisers to the President so they can hear this is not ancillary of what they do, this is not a nice to have, but this is a priority for the President."

Mythbusters gets mixed reviews

Another major priority for the administration has been improving communication with industry.

OFPP launched the Mythbusters Campaign in February 2011 and issued a second memo earlier this summer to improve communication between the government and its contractors.

Text continues after chart.

Click to make larger.

Mythbusters seems to be having some effect with 38 percent of the respondents saying it's been effective. Additionally, 38 percent said the effort hasn't been effective and 13 percent said its losing steam.

But at the same time, 63 percent of those surveyed said industry-agency communication has stayed about the same, while 37 percent said talking to contractors has become easier.

Jordan said more CAOs, SPEs and other acquisition workers are aware of the Mythbusters Campaign, but more needs to be done.

"There always will be a natural tension and we don't want the pendulum to swing too far in one direction," he said. "We do think there is a great value in having these vendor communications between contracting officers and businesses."

Jordan said OFPP must do two things: talk to agencies and vendors and see if there are additional myths that need to be dispelled and potentially issue a third and fourth memo; and continue to discuss and reinforce that it's perfectly legal and fine to communicate among the parties.

Jordan said part of the way to improve vendor-agency communication is through training of contracting officers.

Training remains intact

Most CAOs and SPEs said they are not cutting training to the acquisition workforce. Half of the respondents said they are spending about the same amount of money to train contracting officers and contracting officer's representatives, while 38 percent said they are spending more money on training.

"I have been able to defend it so far so not yet, but it is close," wrote one respondent.

Despite the attempts to improve communication with vendors, half of the CAOs and SPEs surveyed saed contractors are more aggressive in protesting losing bids on contracts than at any time in the last five years. But 75 percent of the respondents said they do not plan extra time into their acquisition strategies for bid protests, specifically on high dollar, high profiler contracts.

"While agencies may feel protest numbers may be increasing, they are confident in the work they have put into their award so they are not scared or planning for a protest," Jordan said.

But the Government Accountability Office reported in December that in fiscal 2011 vendors filed more bid protests than at any time since 1995.

A majority of CAOs and SPEs also say the focus by OFPP and Congress on using suspension and debarment hasn't changed the way their agency uses the tool.

The Interagency Suspension and Debarment Committee issued a report in September showing the use of this tool increased to 3,326 in 2011 from 1,900 in 2009.

Jordan said he went to a recent committee meeting to highlight how important the work they are doing is and the need to be thoughtful in fighting fraud, waste and abuse.

RELATED STORIES:

Acquisition workforce, contract management top CAO priorities

OFPP, SBA trying to fix small business contracting shortcomings

Small business contracting goal remains elusive

OFPP dispels 8 more agency-vendor communication myths

Analysis: Friction increasing between agencies, vendors

Agencies cracking down on troubled vendors