The Lost Art of Risk Taking in Government Contracting

September 10th, 2012|NEWS: SME Insight|

By Gary Poleskey

As a general rule, I hate when people quote themselves in speeches or blogs, but I’m going to make an exception here because two professionals (who are very worthy of note) recently supported and emphasized an observation I’ve frequently made about US Government acquisition:

“The only answer that is always wrong in acquisition and contracting is the answer that is seen as always right!”

For my part, I stand by this observation because buying and selling organizations that use the same approach or solution to every problem are doomed to use a sub optimal solution much of the time without challenging themselves to do better.

Two big names in the federal acquisition and contracting arena have recently underlined the degree to which they believe government professionals must avoid the pitfalls of overusing the same tool or process—without ensuring it is exactly right for the current requirement. In one of his last interviews with Defense News, former Air Force Chief of Staff, General Norton Schwartz, US Air Force (USAF) (Ret), was asked if he had any regrets during his time as the leader of the world’s most powerful Air Force. He said, “One…we de-emphasized innovation more than we should have…I have a good feeling that General Welsh will recover that spirit of innovation (when he assumes command).” Re-using the same tool in many circumstances simply because it may have worked in the past and is seen as safe, without ensuring that tool is the best fit for the requirement at hand is, in my opinion, a clear example of the lack of innovation to which General Schwartz is referring.

Dr. Steven Kelman

Similarly, Steve Kelman, professor at the Harvard Kennedy School of Government and former director of the Office of Procurement Policy observed in a recent blog post entitled, “Of Bureaucracy and Betty Crocker,” published on the Federal Computer Week website that, “The challenge for a rule-bound organization is that…in (such an) organization, rules set up to establish a minimum standard of performance often come to be seen by employees as the only things they need to do to do their jobs—that nothing more is expected.”

What both General Schwartz’ and Steve Kelman’s observations have in common is that both are an example of an extremely risk averse environment wherein the same tools are used repeatedly without a careful assessment of if that tool will best meet the needs of a given situation or acquisition requirement.

I believe the recent overuse of the low price, technically acceptable (LPTA) technique (in its various forms) in source selections is a prime example of acquisition and contracting professionals taking the easy way out and reusing a tool that is seen as safe without objectively evaluating if that tool best addresses the requirement’s challenges. The acquisition and source selection strategy for any requirement should give the government buying team the highest likelihood of selecting a product or service that best meets the needs of the warfighter, while achieving other important acquisition constraints. Using the LPTA technique to satisfy a complex requirement that includes, for example, a development and transition to production phase, may be seen as “safe” by some; but, in fact, this is a gross misuse of the technique which was designed for much simpler and straightforward acquisition environments.

Properly using a full trade-off, best value source selection technique in a manner that carefully implements FAR 15.304 direction for constructing evaluation criteria will result in a tight set of criteria that will, in turn, enable the buying team to select a product or service that best meets warfighters’ needs—without limiting their choice to the lowest cost solution. This is possible if acquisition and contracting professionals carefully evaluate the requirement and actively limit the criteria to those that are truly critical and have the potential of discriminating among potential solutions. This approach requires “risk takers” willing to be innovative enough to use the flexibility already built into the FAR to enable decision makers to select the best, yet affordable, solution. Risk taking does not have to mean using strategies that require complicated FAR waivers to succeed—often simply taking advantage of the flexibility that currently exists within the FAR’s “four corners” is enough. In my view, this risk taking is necessary to be truly successful in the challenging acquisition environment in which federal acquisition finds itself in the fall of 2012.