Acquisition Policy on the Drawing Board in a Tight Budget Environment
Published: February 26, 2014
As the FY 2015 budget and appropriations season gets set to launch, expectations of belt-tightening and debate about priorities has set the tone for another tough budget cycle. When the dollars get tight, attention turns to improving agency acquisition processes and how effectively and efficiently they spend and manage the acquisition dollars that they get. In some cases, the efforts take an agency in one direction and another seemingly in the opposite.
To be specific, I am referring to recent activities that include potential legislation that would press the Department of Homeland Security (DHS) to structure its acquisition processes to be more like the Department of Defense’s (DoD) and Pentagon efforts to simplify and streamline its existing processes to be more agile.
DHS Could “Zig” . . .
As reported by Fed News Radio recently, the chairman of the House Homeland Security Subcommittee on Oversight and Management Efficiency released a draft bill, called the DHS Acquisition Accountability and Efficiency Act, which seeks to remedy inconsistencies in how DHS implements its policies and industry best practices for acquisitions and procurement. If enacted, the bill would target improved discipline, accountability, and transparency in DHS acquisition program management.
In a nutshell the House bill would make DHS use many of the same processes as the DoD, like instituting an acquisition review board with quarterly acquisition reviews, building multi-year acquisition strategies, and notifying Congress if program schedules slip or change. The bill also would tweak the authorities and responsibilities of DHS’s Undersecretary for Management, and Chief Financial, Information, and Procurement Officers to improve overall acquisition performance.
. . . While DoD “Zags”
While efforts are underway to put more structured discipline into DHS acquisitions, the Pentagon is working hard to streamline its acquisitions and be more agile. Last December, then deputy defense secretary Ashton Carter, distributed a memo to the DoD acquisition workforce implementing new DoD Instruction 5000.02 directed at streamlining the acquisition process and tailoring the process to the product or service being acquired. The policy provided interim guidance to achieve greater efficiency and productivity in defense spending and effectively implement the department’s Better Buying Power initiatives while the DoD office of Acquisition, Technology & Logistics (AT&L) develops a legislative proposal to simplify the current body of law into a more user-friendly set of requirements. That is expected to be finished in May, just in time for the appropriations season to heat up.
In the meantime, Defense Secretary Hagel has outlined the DoD’s FY 2015 budget plan, which includes significant shifts in spending priorities, and DoD officials expect to see some significant changes in acquisition policies, processes and workforce capabilities. In a Federal Computer Week report, Frank Kendall, Undersecretary of Defense for Acquisition, Technology and Logistics, describes some of his current plans underway to streamline DoD acquisition rules, with the hope of implementing them in fiscal 2015.
To be fair, the goal of both efforts is to improve the effectiveness and efficiency of acquisitions at the respective departments. Both routes have their challenges and are not universally embraced with open arms. Changes in process and authorities at DHS could impact – formally or informally – who ultimately is the decision maker on an acquisition and that means a supplier’s “customer” might change. It also may add additional scrutiny to program performance reviews, increasing accountability.
DoD’s (or any agency’s) efforts to streamline their acquisitions may continue to take them down the road of greater use of existing multiple-award contracts, as well as crafting new contracts that are flexible enough to adapt to changing needs. It could mean increased competitions via task orders on existing contract vehicles rather than through full-and-open competitions. It could also mean that award periods will last for shorter durations, raising bid and proposal costs and making business planning more tenuous. Vendors and agencies alike may experience more risk from accelerated acquisitions if they are not done carefully.
Whatever the end state becomes at both DHS and DoD, the good and bad news is that it will take some time for the dust to clear and for things to settle. That means vendors will have time to watch what’s coming down the road and adjust their strategies. It also means that the process of change could add some uncertainty and fluidness to the existing market. While most of us would welcome a lot less uncertainty these days there is always some opportunity in the midst of change. Keep watching and get ahead of it.