Encourage More Procurement Innovation

Encourage More Procurement Innovation

Background

A Merit Systems Protection Board (MSPB) study of the contracting
workforce found that the ability to innovate was needed but not being
developed by supervisors.1 There is no effective organized means for
promoting innovation among agencies, even though many federal agencies
are doing business in different ways. For example, agencies are using
new automation techniques and procuring goods and services using
different methods. In addition, many state, local, and foreign
governments and commercial enterprises are testing new contracting
concepts. It is likely that the majority of federal government
contracting professionals are not even aware of the innovations taking
place in corporations and in governments like those of Australia and
Texas. The federal government, however, benefits when contracting
officials learn new ways of doing business and profit from the lessons
learned by others. This knowledge also spurs agencies to improve
cumbersome processes. At present, there are legal limits on procurement
innovations since, to test a new idea, waivers of existing laws may be
required.

The Office of Personnel Management has authority under its statute to
conduct demonstration programs and waive personnel laws on a test basis
after notification to Congress.2 Similarly, the Office of Federal
Procurement Policy (OFPP) Act requires the Federal Acquisition Institute
(FAI), located in the General Services Administration (GSA) but under
the policy direction of OFPP, to promote and coordinate governmentwide
research and studies to improve the procurement process and the laws,
policies, methods, regulations, procedures, and forms relating to
procurement by the executive agencies.3 However, FAI has insufficient
resources to do so.

Need for Change

     Currently, the procurement system's many control mechanisms
discourage innovation. Good ideas are often squashed by any or all of
these mechanisms or by the procurement culture itself. The procurement
culture includes the system of policymakers and overseers who create and
monitor the procurement system. Many of these individuals, not feeling
the negative impact of the system of rigid rules, believe no changes are
necessary. Thus, they create a climate and a correspondingly cumbersome
process where requests for deviations from laws or rules are often
viewed suspiciously. These requests are often viewed as attacks on an
efficient system they value or simply as selfserving requests to cut
corners and, thereby, sacrifice a noble objective of the system. Given
the internal hurdles to overcome in terms of the layers of reviews and
the usual reaction to requests to try something different, many line
managers and contracting officers simply say, why bother? Furthermore,
one of the larger barriers to the pursuit of new ideas is the burdensome
process of going to Congress to get its approval for waiving applicable
laws for pilot tests. Congress has given OFPP authority to request such
waivers in P.L. 98191. However, because the request process is so
difficult, it has not been possible to start meaningful pilot tests.

An effective test program, which includes the authority to waive laws
for purposes of tests, is essential to promote innovation in federal
procurement. Pilot tests are a crucial means to experiment formally with
new and innovative ways of doing business and to determine whether these
new ideas have merit for expansion past the pilot stage. Further, the
federal government needs a means to receive new ideas and communicate
them quickly to line managers as acceptable procurement system
alternatives.

FAI can assist agencies in this testing and dissemination process. In
the past, various federal programs have invested heavily in research
that has had no practical application, let alone addressed the most
pressing concerns of procurement executives, industry, or Congress. By
contrast, the FAI has established various committees and working groups
to successfully oversee and support FAI career development initiatives.
However, the FAI needs an advisory committee to oversee and support its
research programs as well. This committee would help the FAI:

-- coordinate its work with other federal research activities,

-- direct its research to the most pressing needs of the procurement
community,

-- identify products and services already developed by various
contracting activities that could meet those needs if made available
governmentwide,

-- obtain access to agency facilities and work sites for the conduct of
research, and

-- identify and benefit from research being done in academia and the
private sector.

          The lack of a governmentwide vehicle to gather and quickly
disseminate successful innovations and new methodologies to contracting
professionals hurts the government's ability to continually benefit from
others' best practices.

Cross References to Other NPR Accompanying Reports

Streamlining Management Control, SMC08: Expand the Use of Waivers to
Encourage Innovation.

Endnotes

1. U.S. Merit Systems Protection Board (MSPB), "Workforce Quality and
Federal ProcurementAn Assessment," July 1992, p. 52.

2. Title 5 U.S.C. 47.

3. See the Office of Federal Procurement Policy Act, 41 U.S.C.  405.