In this age of increasing demand for high-performance contracts at home and abroad, the Government has failed to develop a strategy for how to properly recruit, retain, and train the contracting workforce.
Many of the contracting careerists who entered the Government workforce in the late 1970s have seen the career field go from large to small, requirements from simple to complex, and demands increase exponentially. At the same time, Congressional involvement has gone from occasional to constant, laws affecting the workforce and ethics have gone from few to many and the average age of the workforce continues to rise. The increased privatization of Government functions has resulted in substantial complex service contracts for almost every type of work the government performs.
These privatized or outsourced functions- in many cases became large-dollar, long-term, and highly complex contracts driving the need for more contracting personnel (and more sophisticated skills) to award and administer these functions. Yet, since this increasing complexity has occurred gradually over time, there has not been a corresponding strategy for how to recruit, retain, and train the workforce to lead the Government effectively into this new age of privatized Government functions.
This shortfall is not a phenomenon felt only within the confines of the contracting community. USA Today published this assessment of the Federal workforce overall in its October 3, 2005, issue, citing the 2003 report of the National Commission on Public Service:"More than half the senior managers in Federal departments will be eligible to retire by 2008, and not enough experienced middle managers are available to replace them. This looming retirement exodus, coupled with the fact that fewer young people are choosing public service as an entry-level career, forms a recipe for managerial disaster. "
USA Today is hardly a contracting trade publication. This editorial is good evidence that this issue is so pronounced and so publicly recognized that all Federal organizations, including contracting organizations, should take notice and take action.
Drain in the Federal Contracting Workforce: NumbersThere is a strong body of analytical studies to quantify the challenges affecting the Federal government generally. The specific contracting data provides compelling evidence of the effects of environmental and organizational change on the profession across the past decade. The workforce change has been gradual.
For example, since 1996 the average age in-the Department of Defense (DOD) contracting workforce has risen by two and one-half years (from 44.6 years to 47.1 years), as the workforce has decreased by 5 percent (from 20,000 to 19,000). This data shows that the retirement exodus described in the popular press has not yet occurred, but the trends
validate and quantify the risks. As shown in the chart above, these chances do not represent an alarming or catastrophic trend, provided that the workload, process complexity, and other factors were stable over the same period of time. However, the external environment across the 10 years from 1996 to 2005 has been anything but stable, with major defense deployments across the world, including continuing conflicts in Iraq and Afghanistan. Similarly, the demands on the corresponding civilian workforce, including within the Department of Homeland Security, have been extraordinary, ranging from September 11, 2001, to Hurricane Katrina. The increase in contracting dollars and actions is shown below.
During this period, the DOD workload per person nearly doubled, from $6.4 million per 1102 staff to almost $13 million each. Part of this change is due to economies of scale and efficiencies in the system, but the dominant factor is the scale of the procurements.While the number of contracting actions has remained relatively the same over this period, contract complexity has risen significantly, as have the dollars awarded. Among these complexity factors are the move from sealed bids to complex "best value" awards, the mandate to evaluate “past performance," and the move from detailed Government specifications to performance-based criteria. As the average dollar value of individual procurements has risen, so has the amount of time and effort required to document, approve, and administer the typical contract.
This trend is not confined to DOD procurement. In his book Unleashing Change, former OFPP administrator Steven Kelman summarizes these Increasing demands on the entire Government workforce:
“…total dollars spent on procurement throughout the 1990s, while the size of the procurement workforce, already downsized, remained the same (it actually declined very slightly). This put workload strains on employees, increasing the chances that contracting errors would make the system perform worse. “Kelman, page 211]
The risk of error (in pricing, source selection, or other factors) in the system is unquestionably increased by the workload strains within the current contracting system. Later in this article we will cite numerous examples of negative press coverage of the mistakes (and perceived mistakes). Further on we will worry aloud whether the profession is better served to address these qualitative issues internally versus waiting for the press and the Congress to "reform' the system on our behalf. But, first we should examine the current experience levels and qualifications within the existing, depleted workforce.
Drain in the Federal Contracting Workforce: Experience
We have one Federal government civilian personnel system, yet we have laws that apply to the qualifications, training, and education of defense procurement personnel, and others that apply to the qualifications, training, and education of non-defense Federal procurement personnel. There is a standard for certification of contracting professionals that requires completion of Government courses that only Government personnel (in some cases defense only) can take, while talented individuals in mid-career from private industry or a civilian agency are hampered in their attempt to enter this workforce because they were unable to attain equivalent credentials.
Following the acquisition reforms of the mid-1990s, Congress introduced legislation designed specifically to address this issue. However, as these statutes were being implemented to tram and improve the workforce, other factors emerged to present new challenges:
Headcount reductions in the Federal workforce and increasing workloads;
• Increased outsourcing;
Increased use of performance-based contracts;
Sarbanes-Oxley and increasing complexity of industry processes; and
External factors, including Iraq, Afghanistan, and Katrina.
The overall effect of these events has been a net loss in efficiency and effectiveness of contracting processes.
Background and HistoryThe issue evolved through the passage and implementation of acquisition reform during the mid-1990s. Major legislative initiatives included the Federal Acquisition Streamlining Act (FASA, 1994) and the Federal Acquisition Reform Act (FARA), also known as the Clinger-Cohen Act (1996). These changes introduced major reforms, including commercial item acquisition, simplified procedures, past performance evaluations, and increased use
of purchase cards. These statutes were designed to improve effectiveness and efficiency in the workforce and to the procurement system more effectively with agency missions. In Unleashing Change, Dr. Kelman describes the effects of the acquisition reforms:
''While procurement reform did pro mote reduction of paperwork and reviews, certainly by no means did all reforms make jobs easier. People using autonomy to be innovative might find their jobs more challenging; and elements of the reformer's better value agenda required more work, not less. The two most prominent examples of this were using past performance in the awarding of contracts and decreased reliance on milspecs, the two signature better-value reform initiatives top leaders pushed. Other examples of reform that generated more work included moving to performance-based service contracting, which also required replacing existing requirements with new ones and doing more market research in advance of a procurement... " [Kelman, page 180]
Notwithstanding the acquisition reform focus on mission-effectiveness rather than job-reduction, the emphasis on “streamlining" explicitly promised greater efficiencies. In anticipation of these efficiencies, Congress dramatically downsized the Federal acquisition workforce. Congress also instituted reforms in related professions and organizations to gain further efficiencies and cost savings.
By 2000, the downsizing based on perceived efficiencies had exceeded the actual efficiencies, and the cycle times and effectiveness within the system had markedly declined. Recent external events have placed extreme strain on the system, first with the conflict in Iraq, and more recently with Hurricanes Katrina and Rita. The result is a convergence of critical factors:
A Federal workforce already understaffed and undertrained,
A major overseas conflict, and
The largest economic recovery effort in American history.Simply put, the profession was struggling to meet the mission before Iraq, Katrina, and Rita. With these compounding factors in place, the profession must develop a new strategy to meet all these missions successfully. At the same time, external
stakeholders, including Congress and the public, need to be informed and engaged to gain support for needed changes.
Unfortunately, press coverage is singularly uninformed and generally focused on bad news and perceived problems. Press commentary on the profession is generally critical and frequently presented in such condensed and imprecise form that the underlying facts are impossible to decipher. The press conclusion is negative, but the facts are absent. To the professional eve, there are two distinct sets of contracts related news stories.
Coverage of individual acts of malfeasance. Within the past year, senior officials at OFPP and the Air Force have been involved in ethics scandals.
These events continue to unfold.
Former Air Force official Darlene Druyun recently completed her term in prison. Former OFPP administrator David Safavian was found guilty of ethics violations. The actions of these individuals provide a perception of scandal and impropriety to the larger issues affecting the profession.
Coverage of the profession generally. As conflict in the Middle East continues, multiple contracting news stories have emerged. These include allegations of impropriety in the award and performance of defense contracts. This coverage has accelerated as Federal agencies award contracts in response to Hurricane Katrina.
The coverage of these issues has not been in depth, and has not distinguished between issues of individual ethics versus the larger systemic and organizational issues in the profession. At a superficial level, the combination of headlines on these issues misrepresents the profession as uncontrolled and unethical. Examples include
”Ex-Pentagon Executive Gets Jail
Time"-Government Executive October 1, 2004
"FBI Widens Probe of Halliburton' Washington Post-October 29, 2004 "Did Pentagon Bend Rules for Halliburton"-NBC News-October 29, 2004
"FEMA Contracts Raise Questions"
New York Times-September 26, 2005 "U.S. Lawmakers Question FEMA
Contract for Carnival"-AP-September
"Dig Contractor Bechtel Gets Big FEMA Deal” -Boston Herald September 29, 2005
Senators Question Carnival Contract"-Miami Herald-September 30, 2005
Based solely on this reportage, the natural public and governmental reaction would be to impose additional rules, regulations, and restrictions on the profession. There is no indication that the media will explore anv root causes of the inefficiencies inherent to the current stress on the procurement system. Instead, the natural reaction will be to commingle the issues of ethics with issues of efficiency and conclude that the contracts profession should be subjected to further rounds of regulation and micromanagement.
Call to Action
It seems that the KISS (Keep It Simple Stupid) principal is called for here. The workforce is short of seasoned, properly trained, and educated staff. The National Contract Management Association (NCMA) has long had a contracting certification program, the Defense Department has a contracting certification program, and the civilian agencies have a certification program. None of them are considered equivalent to the others. Colleges and universities have certificate and degree programs in contracting, but few of their courses are accepted in lieu of agency-mandated training.Professionals interested in entering Government service (or a different part of it) are hindered by duplicative training and certification requirements. How can we make this an integrated and mobile workforce with incentives, rather than disincentives, to move into
and out of Government service, and between Federal agencies at various levels with a standardized set of criteria? It starts with standardization of Congressional legislation. Then the implementation of laws by various Government agencies needs to be consistent and complementary.
Perhaps it is time for a Section 800-like panel on contracting workforce legislation, and standards to streamline requirements and make them applicable to all, and equivalents to be identified for private industry professionals who wish to enter the field in mid-career. Such an initiative would provide long-term consistency and continuity to the contracting workforce.
Regardless of the long-term goals adopted, there are three immediate actions needed to avoid the coming train wreck. First, increase the size of the Federal procurement workforce. Considering the greatly increased workload over the past decade, the concurrent reductions in the staffing of this function, and the critical missions required today, increased resources are needed.
Second, expand and intensify efforts to market Federal careers in the procurement field
to recent college graduates. These efforts should include allowing existing authorities to attract the "best and brightest" including recruitment and relocation bonuses, and stepped- up grade and within-grade initial hiring salaries. Similar efforts have been used successfully in the recent past for other critically short Federal career fields, such as science and engineering and should be applied to the contracting career field.Third, regulations should be adopted for "universal" training education, qualification, and certification of contracting personnel across the entire Federal government and in industry. This "universal" set of standards should include appropriate equivalencies for training, education, qualification, and certification achieved while working outside the Federal
government. This would attract mid-career and senior contracting professionals to enter the Federal workforce from industry.
An increase in sufficient qualified contracting resources to perform the procurement mission across the Federal government will yield immediate results
and enable Federal agencies to meet today's critical mission requirements. Faced with critical missions both at home and abroad, we must recognize that "right-sizing" today means enough contracting professionals and the right skills to do the job right.
About the Authors
SANDRA O. SIEBER is a director of the National Contract Management Association (NOW) and a senior executive in the Department of Army. The views expressed in the article are her individual views and do not necessarily represent the views of the agency, DOD or its components, or the United StatesRONALD L. SMITH is a director of the National Contract Management Association (NCMA). The views expressed herein are his individual views and are not those of or made in any capacity on behalf of either NCMA or his employer; GovConnection, Inc.
This article, originally appearing in the electronic newsletter of the National Contract Management Association (NCMA) is reprinted with permission from NCMA ( www.ncmahq.org ). In addition, a shorter version of this article ("A Lot to Learn," page 69) ran in the Mav 15, 2006 issue of Government Executive Magazine (www.govexec.com ).
Service Contractor / Summer 2006 Contract Services Association