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Hot Topics!!! The State of Play? The Future?. Professor Steven L. Schooner. Public Procurement: The Only Constant is CHANGE. Of Cycles, Waves, or Pendulum On-going evolution, ever-changing Priorities Needs Capacity Markets. Best (and Worst) of Times. - PowerPoint PPT Presentation
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Hot Topics!!!
The State of Play?The Future?
Professor Steven L. Schooner
Public Procurement:The Only Constant is CHANGE
• Of Cycles, Waves, or Pendulum
• On-going evolution, ever-changing–Priorities
–Needs
–Capacity
–Markets
Best (and Worst) of Times• Massive post-2000 Federal Procurement
Spending Binge– No expected reversal (in short-term)– Should prove recession proof
• Recession may help acquisition workforce retention and recruitment
• Workforce– The lost generation– Wrong skill set
• Scandals• Protectionism• No Relief in Sight
• Globalization– Multinational markets– Multinational firms
• Harmonization of international procurement norms– WTO GPA, EU, OECD– UN-UNCITRAL Model Law– World Bank, Regional Development Banks
• Outsourcing!!!!
Outsourcing and Privatization: Bipartisan Trend
“The era of big government is over.”
“Too much government crowds out…the private economy.”
Privatizing The Military?
Is the Government “Too Dependent” Upon Contractors?
• That’s Irrelevant– Too many mandates, too few
government employees
– Pressure to suppress government headcount
– Outsourced governance (and the blended workforce) is the reality, and here to stay….
Outsourcing Makes Sense• Maintain focus on mission - specialization• Surge capacity• Flexibility• Innovation, access to technical expertise• Continue to meet agency missions with inadequate
personnel, abilities, and resources• “Attractive”to Program Managers
– No troop/personnel caps– Customer Service “ethic”– Civil Service frustration
Penny-Wise, Pound Foolish?• Marginal cost saving (in a vacuum)
is not the only metric
• Best value – Paying more for:–Higher quality goods/services
–Quicker delivery/response time
–Unlimited surge capacity
–Flexibility – changing personnel, products, approaches
Outsourcing Has Limits• Inherently Government Functions
– Right idea– Poor decision-making rubric
• Blended Workforce evolved more quickly than:– Best management practices– Ethics rules (e.g., organizational conflicts)
• Contractors Need to Be Managed
Blackwater Personnel are:• Profiteers
• Mercenaries
• Cowboys
• The Military Commander’s Worst Nightmare
• A Political/Foreign Relations Accident Waiting to Happen
• An Essential Element in the U.S. Military and Diplomatic Presence in Iraq
• Patriots• Public Servants• Best Private Security
Money Can Buy
• The Future?
Battlefield Contracting in Iraq:“Unprecedented” Reliance
Upon Contractors?
• 160,000-180,000 contractors
• 1:1 ratio - contractors to troops
• Multi-billion dollar industry
4,500+ “Total” Fatalities?What About the 1,120+ Contractors?
25% of allied fatalities in 2007
Big Picture: Simple Story
• Statutory Cuts: 1989-2000 workforce reductions
Post-9/11: huge procurement spending growth
Defense AcquisitionWorkforce & Procurement Spending
(reflective of government-wide experience)
0
50100
150200
250
300350
400450
500
1990 1999 2004 2006
Fiscal Year (FY)
Acquisition Workforce(In hundreds ofthousands, PackardCommissionMethodology)
DoD ProcurementSpending (in billions ofdollars)
$100
$150
$200
$250
$300
$350
$400
$450
2000 2001 2002 2003 2004 2005 2006 2007
Federal Procurement Spending Since 2000 (in Billions)
Cumulative Growth in Federal Procurement Dramatically Outpaces Inflation
0%
20%
40%
60%
80%
100%
2001 2002 2003 2004 2005 2006
Federal Procurement Consumer Price Index
Investing in theAcquisition Workforce
• Total Headcount–New Hires
–Pending Losses
• Training and Experience–New Hires
–Existing Workforce
Acquisition WorkforceWorst-Case Scenario???
• Denial remains prevalent • Retirement bubble ready to burst (but,
a recession may help)• Insufficient:
– leadership for massive hiring/training initiative;– numbers of qualified individuals interested in
working for the government (but, a recession may help);
– time/resources for the existing workforce to gain sufficient training/experience
Restoring the Acquisition Workforce?
For the foreseeable future, Congress cannot spend “too much” on:
• Salary• performance
incentives• recruitment
bonuses• retention bonuses
• intern programs,• workforce
training• sabbaticals (for
higher education)
Current Acquisition Workforce
Wrong Skill Set?1984 (CICA-FAR Era)• Supply• Formal
Advertised/Sealed Bid
• Firm Fixed Price• Government-specific
specification• Awarded by PCO• Managed by DCAS
(DCMC, DCMA)
Today• Services
– Employee augmentation– Personal Services
• ID/IQ, Inter-agency vehicle• Cost-Reimbursement,
T&M• Limited Competition• Unclear responsibility for
post-award contract management
Current Acquisition WorkforceOpportunities, Attractions?
• Civil Service (for better or for worse)• Career ladder out of secretarial pool• Long-term, stable, safe career• Fixed retirement program• Inadequate incentive structure
– 1990’s – failed incentive initiative
Recruiting the FutureAcquisition Workforce
• Gen X, Gen Y….– “most praised generation”– Universities and Helicopter Parenting– Show me the money!
• Civil Service Bureaucracy– Impenetrable, Slow, not user friendly
• Job Mobility• 401(k), TSP (What, me worry?)
• What is, why work in “procurement”?
Gansler Commission: A Plea For Responsible Outsourcing?
Contract management is the essential post-award contracting function to ensure mission accomplishment, and it is an important control over fraud, waste, and abuse;... With not enough ACOs, PCOs could do this - but they are too busy and therefore it is not being done….
Gansler Commission: A Plea For Responsible Outsourcing?
• Increase– Army military and civilian contracting
personnel - 1,400+, apx 25 percent of the total– DOD post-award contract management
personnel (to fill DCMA billets for Army support) - nearly 600
• Extrapolate across Government [8,000-10,000?]– Army ~ 15-25 percent of federal procurement $– Army better staffed than other agencies
Scope of the Challenge: Recruiting the Future Acquisition Workforce:
Back-of-the-napkin assumption:– 8,000-10,000 professional needed
An Analogy: US Department of Justice
< 8,200 Attorneys, including:–General Legal Activities (all)–U.S. Attorneys (all 50 States)–Antitrust Division–Trustees
dDwyMTQ
Can NCMA Play a Leadership Role?
Good Luck!
• Questions?
• Comments?
• Suggestions?
• Ideas?