Acquisition Reform Moves Fall Flat in Senate Frustrated senators from both parties ripped the Obama administration’s acquisition reform efforts as vague and toothless. The Office of Management and Budget issued new guidance Oct. 27 to push the president’s goals of reining in cost reimbursement contracts and expanding and improving the acquisition workforce. “Our goals are results-oriented: find $40 billion per year in [contract] savings, strengthen the government’s ability to manage the multi-sector workforce, and provide for a strong acquisition workforce,” Deputy OMB Director Jeffrey Zients testified to the Senate Homeland Security and Governmental Affairs Committee’s Subcommittee on Contracting Oversight Oct. 28. But subcommittee chairwoman Claire McCaskill, D-MO, complained, “OMB’s guidance doesn’t provide a clear way forward.” New guidelines from OMB’s Office of Federal Procurement Policy are designed to tell agencies how to achieve the administration’s target of a 10% reduction in cost reimbursement contracts this year. The administration believes those contracts are too risky and give the contractor no incentive to hold down costs. McCaskill said the guidelines are too vague to matter. “To achieve lasting reforms, we need definite goals and detailed plans about how to meet those goals,” she said. “We need to be able to measure progress and hold agencies accountable every step of the way. And we need strong leadership from OMB. Otherwise, government contracting is just going to be business as usual.” Zients said President Obama has set a definite goal by ordering a 7% cut in contract spending over the next two years, saving $40 billion. The president “has put a $40 billion stake in the ground,” he testified. Each agency was due to submit its plan for achieving the 7% cuts on Nov. 2. Zients said the plans might be made public later. Zients signaled that the administration will aggressively pursue strategic sourcing to cut costs. He called that “our biggest opportunity.” Since the federal government is the world’s largest purchaser of goods and services, he said, “It’s time to flex our muscle on purchasing power.” In an Oct. 27 memo, OFPP Deputy Director Lesley Field said agencies often do not properly define requirements and give contractors too little time to respond. She said agencies must provide a clear description of what they want so contractors will be willing to bid on a fixed-price contract. Field urged agencies to reach out to the private sector when developing requirements, to find out what is available and how much it’s likely to cost. She said feedback from vendors can help shape requirements so that they will attract more bidders. A leading contractor association, the Professional Services Council, called the guidance “sensible acquisition practices long supported by industry.” Council President Stan Soloway said, “The memos highlight the importance of front-end acquisition planning, clarity in requirements, robust market research, matching appropriate contract type to the specific requirement and acquisition strategy, and enhancing the capabilities of the federal acquisition workforce,” A second OFPP memo outlines strategy for growing the size and capability of the acquisition workforce. Zients said OMB has determined that each civilian agency needs at least 5% more acquisition personnel along with improved training. The Defense Department, the government’s biggest spender, plans a greater expansion of its workforce. But Sen. Susan Collins, R-ME, dismissed the memo as “boilerplate.” “I’m tired of studies,” she said. “I’m tired of working groups. I want to see action.” “If we don’t solve the workforce issue, it’s not going to matter that we have good guidance,” she added. Zients said the administration is not ready to propose a new definition of “inherently governmental” work that should not be contracted out. That is a key element in the president’s goal of reducing over-reliance on contractors. Zients called the issue “unbelievably complex terrain.” McCaskill agreed that there is “ongoing confusion” over what tasks are inherently governmental. In looking at the issue, Zients said the administration has focused on IT outsourcing and on the many contractors who assist the overburdened acquisition workforce—what McCaskill describes as “contractors watching contractors.” As he trumpeted the administration’s progress in its early months, Zients acknowledged, “We have a lot of work to do.” McCaskill warned that the federal government is “a really big monster to move.”