Procurement Chief Outlines Contracting Agenda President Obama’s procurement policy chief warns of lean times ahead for contractors. “The days of the increases of 10 to 12% annually in contracting spend—those days are over,” said Dan Gordon, administrator of the Office of Federal Procurement Policy. “We cannot afford it.” He spoke to the Coalition on Government Procurement in Washington March 11. The president has directed agencies to reduce contract spending by 7%, or $40 billion, over the next two years. Gordon said many agencies plan to achieve some savings by increasing their use of fixed-price contracts instead of cost reimbursement or time-and-materials types, which the administration considers risky and potentially more costly. Gordon described the administration’s policy as “rebalancing” the mix of contractors and federal employees. The Office of Management and Budget has told agencies to look for work that can be insourced, especially those functions that are considered inherently governmental such as acquisition. The procurement policy office plans to issue a draft policy letter by the end of the month identifying functions that will be classified as inherently governmental. Gordon said the policy will also identify jobs that are closely associated with inherently governmental functions and jobs that are considered critical functions; the latter two categories could be handled by contractors in some instances. He added, “We just need to be careful about the work contractors are getting.” OFPP will ask for public comment on its draft. Gordon said the goal is to produce “clear, helpful, concrete guidance” to let agencies know what functions should be performed by government personnel. Industry officials have complained that some agencies see an “insourcing mandate” from the administration and are moving to insource jobs by assuming big savings when federal employees replace contractors. On other topics: •Strategic sourcing is a key element in reducing contract costs. So far the strategy has been used primarily for commodities such as office supplies and telecommunications, but Gordon said strategic sourcing of commercial services is coming. Although strategic sourcing is aimed at reducing the number of vendors, he said, “We need to be sure that we are not hurting small businesses [and] local businesses.” •Acquisition workforce. Rebuilding the acquisition workforce is a top administration priority. The president’s 2011 budget proposal includes $158 million to hire and train acquisition personnel in civilian agencies. The goal is to increase the workforce in those agencies by 5%. In addition, the Defense Department plans to add around 20,000 acquisition workers over the next five years. •Multiple award task order contracts. Gordon said his office is reviewing the proliferation of governmentwide acquisition contracts and other IDIQ vehicles. He believes some of those vehicles are “duplicative or triplicative.” “I think that they risk being wasteful for industry and wasteful for government,” he added. •High Road. Gordon confirmed that the administration is considering the High Road Procurement Policy, which would favor contractors that offer higher pay and benefits. “No decision has been made,” he said, declining to discuss the issue further.