It looks like the Beltway will be tightening its belt. President Obama has pointed out that just as American families are making sacrifices so must those who serve government. With a new initiative holding programs and projects to stricter standards, agencies as well as contractors must show the value of their contributions to the American people.
“Mission statement” rhetoric will not cut it. What a company might proudly view as its heritage may soon be seen as habit. Instead, contractors must perceive and communicate the genuine, immediate and long-term value of their offering. Enduring organizations tend to invest in discovering how their value proposition remains applicable as circumstances change. And waves of change are now surging throughout the government community.
The President’s challenge to the government community. March has roared in like a lion in Washington. As the snows were melting from the Capital’s first major snow storm of the year, the President, joined at the White House by his campaign rival Senator John McCain (R-AZ), came through on an election promise. On March 4, 2009, President Obama vowed to change how things get done in government. In his news conference, he gave a rationale consistent with the events of the past few weeks: “As we get our economy moving we must also turn the tide on an era of fiscal irresponsibility so that we can sustain our recovery, enhance accountability and avoid leaving our children a mountain of debt.”
Now he has targeted what he considers the abuses of contracting: “The American people’s money must be spent to advance their priorities – not to line the pockets of contractors or to maintain projects that don’t work.”
The White House Memo, entitled “Government Contracting” not only calls for a review of all existing contracts, but for the establishing of contracting guidelines going forward. By July 1, 2009, the Administration will issue government-wide guidance to “identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency’s needs, and to formulate appropriate corrective action in a timely manner.” By the close of FY 2009 at the end of September, OMB Chief Peter Orzag must indicate new guidelines governing key areas of procurement for each agency.
A shift in the role of government. The memo further raises the fundamental question of what work is “inherently governmental.” Hence it challenges agencies to delineate the ground rules for outsourcing. The burden of proof has suddenly shifted from the recent implementation of Circular A-76, in which agencies have been under pressure to show how they can beat out private sector rivals. Now the agency must prove why it is outsourcing and give additional proof if it will use a non-competitive or cost-plus vehicle. The memo explicitly states that “contractors may be performing inherently governmental functions.” And it asks for the lines to be redrawn.
Good news for small business. Even as the President called for stringent scrutiny of major contractors, he opened doors for small businesses. Interestingly, in the news conference, the President linked this issue with outsourcing: “We will stop outsourcing services that should be performed by the government and open up the contracting process to small business.” The new hierarchy of contracting gives greater emphasis to small business side by side with a return of “appropriate work” to government. Branding, of course, is important here as many set asides and small businesses have very low profiles.
Agreed: more contracting officers. A few weeks ago, TMP had the opportunity to discuss employer branding with recruiters of greatly needed government contracting officers. Consider that government spending has increased over the last nine years by about 155 percent to almost $532 billion. But the acquisition workforce, e.g., contracting officers and specialists, has increased only 10 percent. Meanwhile to the President’s chagrin, there have been fewer and fewer full competitive contracts (a trend that began with the Clinton administration).
Not surprisingly, George Washington University legal professor and acquisition expert Steven Schooner told the Washington Post that the most important review ordered by the Memorandum is to evaluate “ability of the federal acquisition workforce to develop, manage and oversee acquisitions appropriately.” That’s where we need a stronger contracting workforce to help ameliorate what the President sees as a “broken system.” And that calls for an employer brand appealing to business-minded young people on par with other opportunities: http://www.fai.gov/FAIC/Default.asp