Reform Information Technology Procurement Background The Brooks Act authorizes and directs the Administrator, General Services Administration (GSA), to coordinate and provide for the economic and efficient purchase, lease, and maintenance of automated data processing (ADP) equipment by federal agencies.1 The Act was passed in 1965 at the start of the era of large mainframe computers, when ADP was a new and highly specialized product controlled by a few large companies. The Act originally covered only contracts for ADP hardware. Amendments to the Act in 1986 broadened its coverage to include contracts for ADP software and support services. The Act was also expanded to cover any contracts that included an ADP component, except for certain contracts of the Department of Defense and contracts for telecommunications systems and services. The term "information resources management" refers to the management of agency information activities and resources, including the use of ADP and telecommunications hardware, software, and services. The term "information technology" (IT) used in this report is the contemporary term describing ADP and telecommunications hardware, software, and services. The Act authorizes GSA to delegate to other federal agencies its authority to procure IT. GSA normally delegates such procurement authority up to a total of $2.5 million for individual acquisitions of IT equipment and services. GSA sometimes makes exceptions based upon reviews of an agency's management of IT systems; exceptional delegations of up to $17.5 million have been made. Agency procurement requests above these levels are reviewed by GSA. GSA reviews about 700 agency requests per year. GSA establishes governmentwide policy for the acquisition, management, and use of IT through the Federal Information Resources Management Regulation (FIRMR). The FIRMR requires agencies to analyze their IT requirements, identify possible alternatives, and justify all IT procurements over $50,000.2 Though the regulation states that the amount of justification and documentation should be commensurate with the cost of the IT item being acquired, agencies have overinterpreted the regulation to require significant amounts of paperwork to justify even simple acquisitions. Need for Change IT procurements in the federal government take too long. A sample of major IT procurements in one agency showed that the government acquisition lead time was 49 months for these procurements as compared to an estimated 13 months for similar procurements in the private sector.3 As a result, IT resources that are being bought to support critical federal program delivery do not satisfy current business requirements because by the time the IT items are delivered they are outofdate. They also cost too much for the value received. Rapid and effective acquisition of IT resources is a vital ingredient of the effort to reinvent government. A recent Harvard study states, "Transformational change is being unleashed in organizational performance and service through use of IT resources." However, it further states that "agencies must typically work through procurement procedures that are widely felt to be costly, slow, and excessively detailed. Procurement is seen as a barrier to strategic IT use."4 These concerns are echoed in a second report representing a survey of senior federal IT management officials. The report notes that many of these officials feel that the "delays are so long, in fact, that they end up acquiring outofdate products."5 Finally, the National Performance Review Accompanying Report Reengineering Through Information Technology emphasizes the importance of obtaining stateoftheart IT resources in a timely and costeffective manner and states, "Information technology provides the means to remove the barriers of distance, time, and physical location. It is key to a system of government wherein customers have timely and simplified access to federal, state, and local government services via easytouse information technology systems. Information technology is a strategic tool to integrate activities and remove duplication of effort among government agencies."6 Challenges confronting managers. The following seven major challenges confront federal managers as they attempt to acquire and integrate IT into the work environment. 1. The computer industry is in the middle of a transition from one that is characterized by highly specialized and unique (proprietary) products to an industry that will someday have products that are almost completely commercialized and interchangeable. The government's practices and policies must be altered to take advantage of this trend but also recognize that it is not yet complete. Although it is moving rapidly, the industry still exhibits significant unique characteristics. 2. According to reports issued by such organizations as the General Accounting Office (GAO), GSA, and the Inspectors General (IGs) of certain agencies, the government has major problems acquiring complex IT products and services.7 These include failure by agencies to clearly define their requirements, failure to reengineer existing systems for rational and efficient processes before beginning automation, inadequate leadership on IT procurements by agency management, inadequate linkage of IT strategies to agency strategic plans, and other management failures. GSA, GAO, and private organizations agree that techniques of good management must be part of sound plans to manage IT procurements. These include mobilizing the right team, clearly defining requirements, tying IT procurement strategy to overall agency strategy, providing strong senior management support, and automating systems only when they have been reengineered for maximum efficiency. 3. The law and the Federal Information Resources Management Regulation (FIRMR) fail to recognize that many IT resources are "commodities"commercial products and services massproduced and offered for sale, lease, or license on the open market. System conversion, obsolescence management, interoperability, process reengineering, security, and other IT issues important in large procurements need not be emphasized for small IT procurements. Many of the smaller dollar acquisitions are for commodities readily available in the marketplace. The laws and regulations underlying IT acquisitions do not currently differentiate between acquisition of commodity and noncommodity items or products. 4. The federal acquisition process is so timeconsuming that it fails to keep pace with technology. The federal acquisition cycle is estimated to be more than three times longer than that of private industry. While comprehensive lead time data is not collected, studies by Treasury, the General Services Administration, and Harvard University and incidental reports indicate that this is due to lengthy agency reviews with unnecessary rules and procedures, excessive documentation of transactions to forestall protests before the GSBCA, time added by GSA review of large agency procurement requests, and the existence of FIRMR provisions that duplicate agencies' normal IT acquisition planning procedures.8 5. Some IT procurements involve benefits that transcend the mission of a single agency, such as volume discounts from large purchases, learning the lessons and best practices of other agencies, and understanding common technology issues underlying multiprogram activities (e.g., "onestop shopping" efforts to provide services across agency lines). Agency acquisition planning must include outreach to, and teamwork with, other agencies where an acquisition produces such benefits. 6. The party responsible and accountable for good management of agency programs, including IT acquisitions, should be identified clearly and unambiguously. 7. Although computer products and services have taken on many characteristics of a commodityi.e., many suppliers, highly competitive pricing, similar features, etc.they also have unique characteristics that make them quite different from TVs, VCRs, calculators, or refrigerators, to name a few other products currently classified as commodities. Their primary differentiating characteristics are: -- continued rapid advance of technology and continuous lower production costs, and therefore continuously lower prices decreasing 20 to 40 percent per year; and -- rapidly changing technology affecting form, fit, and function, which yields much higher performance for much lower costs. GSA strives to meet these challenges through innovative training programs, an aggressive triennial review program of agency IT management capabilities, sponsorship of various forums, and cooperation with concerned agencies. However, the problems continue. There is reason to doubt that any central management agency, no matter how excellent, can solve problems that are essentially institutional problems. Information technology evolution is so rapid that a continuous influx of talent and stateoftheart knowledge is necessary if any central management organization is to handle the role GSA currently plays. Given scarce resources and the limitations in pay and personnel management practices inherent in the federal government, it is unlikely that such a central management organization could amass and continually replenish the talent required to guide agency procurements. Cross References to Other NPR Accompanying Reports Reinventing Support Services, SUP04: Streamline and Improve Contracting Strategies for the Multiple Award Schedule Program. Reengineering Through Information Technology, IT01: Provide Clear, Strong Leadership to Integrate Information Technology into the Business of Government, and IT11: Improve Methods of Information Technology Acquisition. Endnotes 1. Section 111 of the Federal Property and Administrative Services Act (Title 40 U.S.C. 541 et seq.) 2. Sections 20120.1 and 20120.2 of the Federal Information Resources Management Regulation (41 CFR 20120.1 and 20120.2) 3. U.S. Department of the Treasury, Internal Revenue Service, Management Review of the Contracts and Acquisition Division (Washington, D.C., 1990). 4. John F. Kennedy School of Government, Information Technology and Government Procurement: Strategic Issues for the Information Age (Cambridge, MA: Harvard University, 1992). 5. See Key Issues in Federal Information Technology (Arlington, VA: Information Technology Association of America, 1992). 6. See National Performance Review Accompanying Report, Reengineering Through Information Technology (Washington, D.C.: U.S. Government Printing Office (GPO), September 1993). 7. See John F. Kennedy School of Government; General Services Administration, Critical Success Factors for Systems Modernization: A Primer for Senior Managers in Government (Washington, D.C., undated); U.S. General Accounting Office, Meeting the Government's Technology Challenge, IMTEC9023 (Washington, D.C.: U.S. General Accounting Office [GAO], 1990); U.S. General Accounting Office, ADP Procurements: GSA Needs to Improve its Review Process to Enhance its ADP Oversight, IMTEC927 (Washington, D.C.: GAO, 1991); U.S. General Accounting Office, Perceived Barriers to Effective Information Resources Management: Results of GAO Panel Discussions, IMTEC9267 (Washington, D.C.: GAO, 1992); and President's Council on Management Improvements, Managing the Risk and Uncertainty of Technological Change (Washington, D.C., 1990). 8. General Services Administration, Go for 12 Program: A Report on Testing of Parallel Review Concepts in the Acquisition Process (Washington, D.C., 1987), and see John F. Kennedy School of Government.
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