Federal contracts: How many is too many?

Friday - 6/4/2010, 3:34pm EDT

Steve Kelmen, professor at Harvard's Kennedy School and former OFPP administrator

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We've been covering the debate about whether there are too many government contracts.

As you know, Federal News Radio's Jason Miller recently reported about the controversy in a three part series, Contract Overload.

We also talked with GAO about one of their reports, which essentially said there's no way to really tell how many contracts exist.

In addition, we got the perspective of Greg Rothwell, former chief procurement officer at the Department of Homeland Security and the unofficial 'father' of EAGLE.

Now we talk with Steve Kelmen, a professor at Harvard's Kennedy School and the former Office of Federal Procurement Policy administrator.

He says, for starters, he does think more information about federal contracts could be beneficial.

"On the one hand, who can disagree with getting more information about what kinds of vehicles are out there and so forth. . . . Also, I think it would be a good idea to get some sort of one-stop shopping site where contracting and program folks from agencies can see what kinds of vehicles from outside their agency are available to them [and get] some feeling of labor rates and other terms and conditions to make it easier to do comparison shopping."

The problem, he says, is the underlying philosophy of avoiding duplication or overlap on contacts. He says this is the part he disagrees with.

"To me, another word for duplication and overlap is competition. We have duplication and overlap among toothpaste brands, or brands of cars. That's competition and it spurs better results for customers. I think that, as a philosophical matter, I am in favor of there being more than one governmentwide vehicle available to agencies, because I think that's going to produce better prices and better service."

Part of the argument has to do with cost. Contractors have to spend money trying to get on a variety of contacts, and that cost, of course, gets passed along to the consumer. The real question is, though -- is this cost exorbitant?

"Competition for toothpaste or cars costs money. Each of the car and toothpaste companies has a separate corporate headquarters, separate management, separate marketing expenses, etcetera. We generally believe that those costs are worth it to get competition. [Now] we have mergers in the private sector that save administrative costs. I'm not in favor of, necessarily, the unlimited number of GWACs, but if you take the GWACs, there really are not very many of them out there. . . . You have the two GWACs NIH runs. . . . GSA has some GWACs and you have NASA SEWP. There's not a lot of GWACs out there. It's not running wild. A lot of the contractors have been objecting to each individual agency doing its own agency-wide contract."

DHS EAGLE is often used as an example of a vehicle that was developed to meet specific needs of an agency that has certain responsibilities. Kelman says he wouldn't second guess an agency's decision to go its own way if they have good reason.

"I guess the worry would be be some sort of empire-building or whatever. I can certainly imagine that, in DHS's case, they did have good reasons. I am mainly concerned [about] keeping in place this relatively limited number of governmentwide vehicles that agencies have available and that put competitive pressures both on each other, put competitive pressures on GSA, and provide a source of competition to contracts within the agencies. All those sorts of competition are good. I think GSA did not do a better job of serving customers back in the 80s when it had a monopoly."

Email the author of this post at dramienski@federalnewsradio.com