How To Fix Procurement 4: Change Contracting Officer Culture
So far in the series we’ve tackled three of the biggest problems in large enterprise procurements: getting the right people at the table, doing that efficiently, and asking them the right things. The fourth big problem? Judgment, and knowing what the best value is. We’re going to cover that today.
The buck stops at the contracting officer for getting the right deal. They’re the ones who select a “most appropriate” vendor, according to the terms of the acquisition, and they’re the ones who negotiate prices with that vendor. They sign the final metaphorical checks to the contractors. So why do the people in charge of spending taxpayer dollars use tools that look like this?
Bad software in government begets bad software. It’s cumbersome, ancient, and a horrible user experience, which means that the people in charge of getting the taxpayer the best value for their dollar are spending their time negotiating with user interfaces, rather than negotiating with contractors. And if someone is using ugly software that’s cumbersome and that they hate using, they’re probably not going to be a good judge of what good software is supposed to look like and operate. It would be like asking a vegetarian for their thoughts on a steakhouse.
It also means that they spend less time keeping pace with technology or understanding pricing changes in the marketplace. This is how you get to a situation that I experienced inside of government, when I was pitching RFP-EZ to contracting officers as a way to make IT purchases of under $150,000. The dialogue went something like this:
Clay: RFP-EZ is a tool that will let you buy simple IT projects, like websites, really easily, as long as the total price is under $150,000.
CO: That’s impossible.
Clay: What’s impossible?
CO: You can’t make websites for less than $150,000.
Clay: Sure you can. You can actually make websites for less than $100.
CO: Well I don’t know about that. Do you have a list of companies that will make websites for less than $150,000.
Clay: Yes. All of them, except for the ones you are presently talking to.
CO: That’s crazy.
There’s a saying in large institutions that all problems revolve around three things: People, Process, and Technology. People is the hardest to solve – we have a contracting workforce that’s equipped with bad tools and compelled to do menial, low value work. How are we to expect they improve?
I think you fix this in three ways:
First, the Open RFP Library helps because it makes it easier to ask for the right thing. The starting point for a purchase moves up in quality and down in price as a result.
Second, there are opportunities for policy change here, too. Raising municipal simplified acquisition thresholds for IT-related costs is necessary. Simplified acquisition thresholds are dollar amounts that, when a purchase falls below them, things tend to be a lot easier. For cities, the number hovers around $20-$40k, but it really ought to be higher for IT related purchases. The cost savings you get in both time to market (remember, this stuff depreciates faster than you can buy it), in a reduction of overhead, and in luring larger purchases under that threshold tend to be significant.
But those thresholds won’t be particularly useful unless you’ve created a cultural shift that encourages contracting officers to stay well-versed in technology.
So, third: you have to understand that Contracting Officers are career-oriented government employees; they’re not elected or appointed by anyone. They’re doing a job, and just like any other employee at any other company, they take their specialties, move around, and get promoted. This is a hard thing for people on the outside of government to get – they’re not susceptible to political pressure. (And for good reason.) They’re susceptible to career pressure.
What’s necessary is an inside/outside game – one where those of us on the outside work with people on the inside like the Defense Acquisition University and the Federal Acquisition Institute as well as outside professional associations like the Rising Acquisition Professionals. They need to be linked with the O’Reillys and Khan Academies of the world to create a training and certification program for getting the best out of information technology purchasing.
You want to make it so that someone who learns this stuff goes far, and someone who doesn’t gets left behind. For these folks, a badge of certification on a resume that helps them take the next leap in their career solves a lot more problems than any online petition ever will. You can’t solve career cultural problems with political solutions.
Fourth and finally: you have to create beautiful software for them. Software that works better and is cheaper than anything else on the market by a factor of 10, so there’s no excuse not to use it. That changes the expectations game. And that’s what we’re working on with Procure.io.
Clay is the chairman and co-founder of The Department of Better Technology.