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The Federal Procurement System Can’t Keep Pace With Technology

An employee works inside a server room at a company in Bangkok, Thailand, November 22, 2016. REUTERS/Athit Perawongmetha

Today the White House held a conference with some tech big-wigs on how federal IT systems could be improved.  I hope the food was good, because that might have been the most important outcome of the conference.  The big-wigs may have batted around some great ideas, but these ideas will be ground to dust by the wheels of the federal procurement system.

In the private sector, a firm making a large IT purchase will have discussions with vendors, the vendors will demonstrate a prototype system (touting how their system has been successful with similar firms), and a decision is made.  It might be by the VP in charge of technology, the firm’s board of directors, or the CEO – but it will be done, and as quickly as possible.  No firm worth its salt wants to be a laggard when it comes to improving its tech systems – improvements translate into more customers and safer transactions (and that’s just the beginning).

In the federal system, however, procurement is partly about purchasing goods and services and partly about social justice.

But allow me to back up for a moment.

First, the purchasing agency has to develop a ‘scope of work’, detailing what the contractor will do and when.  For a large IT system purchase, this step alone could take a year.

Then the ‘scope of work’ is put into a Request for Proposal (RFP).  For a major project, an agency may publish a draft RFP to get input on its feasibility from prospective contractors.

With or without a draft RFP, this step can take another year (or two).

Then the agency publishes the RFP, and awaits the proposals.  As prospective contractors already have a good sense of what’s required, this can be done in 90 or 120 days.

Next, the agency receives the proposals, and evaluations begin.

Here’s where the social justice element comes in.  In addition to asking whether Company A’s system is robust enough to meet the agency’s requirements, there are questions about:  How many minority-owned/veteran-owned/women-owned subcontractors involved?  What are their shares of the contract?  What will they be doing?

Not surprisingly, having ample work done by certain subcontractors earns the prime contractor bonus points.

Further, depending on the contract size, the purchasing agency may have to deal with Congressional members who are rooting for the bidder from their state.

Finally, a decision is taken and the agency awards a contract.

But the show’s not over yet.  The losing bidder(s) can protest to the Government Accountability Office.  The agency may have to put its contract implementation on hold until the GAO makes a decision on the protest.  As the protest investigation may involve actions such as hearings – this adds more time to the process.

Plus there’s the risk the GAO may find for the protesting firm, including a finding that the RFP’s scope of work was defective.  At this point, the agency has to go back to square one and rewrite the RFP per the GAO’s recommendations.  The result:  several years of work down the drain.

I have no doubt the White House would find this unacceptable.  However, it’s statutory law, and cannot be erased by the President alone.

Thus, while the White House can host a lively and somewhat useful chat-fest on improving federal computer systems, actually purchasing the technology requires a long slog through the procurement swamp.

To truly upgrade federal government’s IT systems, the White House would be wise to propose bold legislation to speed up the procurement system.  Considering the hyper-fast changes in technology, art of a federal IT deal should take months, not years, to accomplish.

Joanne Butler
the authorJoanne Butler
Joanne Butler is a senior economics fellow at the Caesar Rodney Institute of Delaware. You can email her at joanne-butler@comcast.net.

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